NewTimeSpace | IPO Watch: LEAD Intelligent Equipment, a Leader in New Energy Smart Equipment, Files for HKEX Listing – Amidst Earnings Volatility and Capital Pressures

Wuxi LEAD Intelligent Equipment Co., Ltd. (00470.HK) launched its H-share offering on February 3, 2026, with a maximum offer price of HK$45.80 per share. Each trading lot consists of 100 shares, with an entry cost of approximately HK$4,626.19, and the company is scheduled to list on the Main Board of the Hong Kong Exchanges and Clearing Limited (HKEX) on February 11, 2026.

As a world-leading enterprise in new energy smart equipment, LEAD Intelligent specializes in providing high-end smart equipment and turnkey line solutions for the lithium battery, photovoltaic, 3C manufacturing and other industries, and holds the top global market share in lithium battery equipment in particular. Nevertheless, hit by cyclical volatility in the downstream industry, the company’s performance has witnessed a marked drop in recent years, with its cash flow and inventory management confronting acute challenges. This makes its listing path feature both the strengths of an industry frontrunner and prominent operational risks.

Core Highlights: Industry Leadership and Diversified Business Layout

LEAD Intelligent’s core competitiveness lies in its profound accumulation and market leadership in the new energy equipment sector. According to a Frost & Sullivan report, the company ranks as the world’s second-largest supplier of new energy smart equipment in terms of 2024 revenue. Notably, in the core track of lithium battery smart equipment, it is the largest supplier globally and in China, boasting a global market share of 15.5% and a domestic market share of 19.0%. The company has established long-term cooperative relationships with top global enterprises across various sectors, including CATL, Tesla, Volkswagen, BMW, LG Energy Solution, LONGi Green Energy and Tongwei Solar.

In addition, the company has built a "core-driven, multi-vertical" business structure. Lithium battery smart equipment serves as its absolute core and revenue foundation. Meanwhile, it has achieved commercial deployment in the fields of photovoltaic smart equipment, 3C smart equipment, intelligent logistics equipment, hydrogen energy equipment and automotive smart production lines. This diversified layout helps diversify the cyclical risks of a single industry and create synergies–for example, intelligent logistics technology can be applied to all production lines.

Furthermore, the company’s growth logic is closely aligned with the global megatrends of energy transition and manufacturing upgrading. In the lithium battery field, its equipment covers the entire front, middle and back-end processes, and can meet the full-scenario demands from consumer electronics to electric vehicles and energy storage. In the photovoltaic field, its products have been successfully applied to next-generation battery technologies such as TOPCon, HJT and perovskite. Such technological foresight enables it to continuously benefit from customers’demand for technological iteration and new capacity construction.

Financial Performance: Revenue Peaked Then Slumped, Profits and Cash Flow Under Severe Pressure

LEAD Intelligent’s financial data typifies the characteristics of asset-heavy, project-based equipment enterprises closely tied to highly cyclical industries: revenue fluctuates drastically with downstream capital expenditure, and profits are significantly affected by inventory impairment and operational efficiency.

The company’s revenue hit a high in 2023 and then saw a sharp pullback in 2024. Revenue rose 19.1% from RMB 13.836 billion in 2022 to RMB 16.483 billion in 2023, before falling 28.6% to RMB 11.773 billion in 2024. In the first nine months of 2025, revenue reached RMB 10.388 billion, a 14.9% year-on-year increase, showing signs of a bottoming rebound. This volatility is mainly due to the overcapacity and weak demand experienced by the downstream electric vehicle, energy storage and photovoltaic industries in 2023-2024, which led customers to postpone equipment acceptance and new order placements.

The company’s gross profit margin has been on a downward trend, falling from 36.6% in 2022 to 32.7% in 2023 and further to 30.0% in 2024, with the margin standing at 30.9% in the first nine months of 2025. The decline is mainly attributable to: 1) substantial inventory impairment provisions made to address the risk of slow-moving goods; 2) pricing pressures on orders signed during the industry downturn. Over the same period, the net profit margin plummeted from 16.8% in 2022 to 2.3% in 2024, and net profit dropped from RMB 2.318 billion to RMB 268 million. In the first nine months of 2025, net profit rebounded to RMB 1.161 billion, mainly driven by revenue recovery and the reversal of credit impairment losses.

Acute challenges in cash flow and operational efficiency: This is the company’s most prominent financial risk point. Due to a significant extension of customer equipment acceptance cycles (from 6-10 months to more than 15 months) and delayed payments, the company’s operating cash flow deteriorated from a net inflow of RMB 1.694 billion in 2022 to net outflows of RMB 881 million in 2023 and RMB 1.567 billion in 2024. Although it rebounded strongly to a net inflow of RMB 3.835 billion in the first nine months of 2025 (mainly due to strengthened collection efforts and increased advance receipts), its sustainability is in doubt. Inventory turnover days surged from 419.9 days in 2022 to 593.6 days in 2024; trade receivable turnover days skyrocketed from 138.6 days to 284.8 days, indicating that a large amount of working capital is tied up.

IPO Details: Strong Cornerstone Investor Lineup, Fundraising to Alleviate Liquidity Pressures

LEAD Intelligent plans to offer 93.61 million shares globally in this H-share offering, with a maximum offer price of HK$45.80 per share. Each trading lot is 100 shares, with an entry cost of approximately HK$4,626.19. Based on the maximum offer price, the expected net proceeds from the offering are approximately HK$4.166 billion.

The offering has successfully attracted 10 cornerstone investors, including renowned international and industrial investment funds such as Oaktree, Pinpoint and Millennium, with a total subscription of approximately US$275 million, accounting for 50% of the globally offered shares.

The expected net proceeds of approximately HK$4.17 billion from this IPO will be mainly used for three purposes: about 40% for global expansion, including establishing a R&D center in Europe and building new service networks in the Asia-Pacific and North America; about 30% for deepening the platform-based strategy, including the construction of a solid-state battery base and R&D of new technologies such as sodium-ion batteries and perovskite; the remaining funds will be used for R&D optimization, digital transformation and supplementing working capital.

Risk Focus: Severe Industry Cyclicality, Working Capital Pressures and Customer Dependence

Risk of severe cyclical fluctuations in the downstream industry: The company’s performance is highly tied to the capital expenditure cycle of new energy industries such as lithium batteries and photovoltaics. These industries are greatly affected by policies, technologies and supply-demand relations, prone to overcapacity and a sudden slump in investment, which directly leads to drastic fluctuations in the company’s orders and revenue. The prospectus discloses that the global market size of lithium battery smart equipment already declined in 2024.

Intense working capital and cash flow pressures: Long customer acceptance and payment cycles are inherent challenges in the company’s business model. During an economic downturn, this problem is amplified sharply, resulting in high inventory, slow recovery of accounts receivable and tight cash flow. Although there has been recent improvement, if the industry weakens again or the company’s credit management is poor, net cash outflows may resurface and even trigger a liquidity crisis.

Risks of customer concentration and inventory impairment: The company has a relatively high level of customer concentration. In the first nine months of 2025, the top five customers contributed 52.4% of its revenue, with the largest customer accounting for 27.2%. Major customers have strong bargaining power, which may further extend payment terms. At the same time, the high-value inventory (reaching RMB 14.862 billion at the end of September 2025) faces sustained impairment risks. From 2022 to 2024, the amount of inventory write-downs surged from RMB 115 million to RMB 549 million, severely eroding profits.

Conclusion

LEAD Intelligent’s listing on the HKEX portrays the image of a manufacturing leader in a golden track yet plagued by cyclical woes. Its world-leading market position, top-tier customer base and product lines covering the main arteries of the new energy sector form a solid foundation for its long-term value, and have attracted the support of top cornerstone investors.

However, investing in the company means having to face the strong cyclicality of its performance, which is highly correlated with the prosperity of the downstream industry, as well as the working capital and cash flow pressures brought by its project-based business model–pressures that are drastically amplified in a counter-cyclical period. This is a profound investment in the "industry beta". It is more suitable for value and cyclical investors who have a deep understanding of the characteristics of the high-end equipment manufacturing industry, believe in the long-term trend of global energy transition, and can withstand significant medium-term fluctuations in performance and stock prices. After listing, the key to the company’s stock price performance will lie in its ability to use the raised funds to smooth cash flow fluctuations, improve operational efficiency, and maximize the release of profit elasticity in the next upward cycle of the industry.

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