Shenzhen Woer Heat-Shrinkable Material Co., Ltd. (09981.HK) commenced its H-share global offering on February 5, 2026, with a maximum offer price of HK$20.09 per share. Each trading lot consists of 200 shares, with an entry cost of approximately HK$4,058.53. The company is scheduled to list on the Main Board of the HKEX on February 13, 2026.

Woer is a global leader in the heat-shrinkable materials industry and holds a significant market position in emerging sectors such as high-speed communication cables and NEV charging solutions. While it demonstrates robust financial performance with healthy profitability and cash flow, the business faces challenges including intense competition in a highly fragmented industry, volatility in raw material prices, and the complex and ever-changing landscape of international trade tariffs. Its path to listing thus features both a solid fundamental base and multiple external tests.

Core Highlights: Diversified Business Layout and Leading Global Market Position

Solid leadership in global niche markets: According to a Frost & Sullivan report, based on 2024 revenue, Woer holds leading positions in several niche markets:Ranked 1st globally in the heat-shrinkable materials industry with a 20.6% market share;Ranked 5th globally among communication cable manufacturers with a 12.7% market share;Ranked 2nd globally among high-speed copper cable manufacturers.Its technical strength is widely recognized by the market. As of September 30, 2025, the company holds 547 invention patents.

Dual-engine drive: "Electronic Communications + Power Transmission": The company has built a clear business matrix, with revenue primarily derived from two segments:Electronic Communications Business (62.2% of 2024 revenue): Products are widely used in data centers, consumer electronics, and other fields.

Power Transmission Products Business (33.4% of 2024 revenue): Deeply integrated with NEV and power grid construction, providing key products such as charging guns, high-voltage wiring harnesses, and cable accessories.This layout enables it to benefit simultaneously from the two major trends of digital economy and energy revolution.

Global production capacity and high-quality customer base: The company operates nine production bases in China and an overseas factory in Vietnam, with plans to establish a new base in Malaysia to be closer to customers and mitigate potential supply chain risks. Its customer base includes numerous Fortune Global 500 and top-100 enterprises in the global AI, telecommunications, NEV, and power industries, representing a diversified and high-quality portfolio.

Financial Performance: Steady Growth in Revenue and Profit, Healthy Cash Flow

Research by the NewTimeSpace Institute, based on the prospectus, reveals that Woer's financial data exhibits the stable characteristics of a mature manufacturing leader: continuous growth in revenue and profit, stable gross profit margin, abundant operating cash flow, and a solid financial position.

Steady climb in revenue and profit:Revenue grew from RMB 5.337 billion in 2022 to RMB 6.920 billion in 2024, reaching RMB 6.077 billion in the first nine months of 2025.During the same period, net profit increased from RMB 660 million to RMB 921 million, with RMB 883 million recorded in the first nine months of 2025.The net profit margin has remained stably high at 13-14%, demonstrating strong profitability and cost control.

Stable gross profit margin and robust cash flow:The gross profit margin has long been stable in the range of 30-31%.More notably, its operating cash flow performance is strong. From 2022 to the first nine months of 2025, net cash flow generated from operating activities has remained consistently positive, exceeding RMB 3.7 billion in total, providing a solid foundation for business expansion and shareholder returns.

As of September 30, 2025, the company had net assets of RMB 6.466 billion and net current assets of RMB 2.056 billion, reflecting a sound financial structure.

IPO Details: Strong Cornerstone Support, Fundraising for Capacity Expansion and Globalization

Woer is conducting its public offering from February 5 to February 10, 2026, planning to issue 139.98 million shares at a price not exceeding HK$20.09 per share. The public offering portion accounts for 13.99 million shares (approximately 10%), with a trading unit of 200 shares per lot and an entry cost of approximately HK$4,058.53. Based on the maximum offer price of HK$20.09 per share, the expected net proceeds from the global offering are approximately HK$2.734 billion.

The offering has attracted a stellar lineup of 16 cornerstone investors, including renowned financial and industrial investors such as HHLR (affiliated with Hillhouse Group), Greenwoods Asset Management, Jump Trading, Jiangxi Copper, and Capchem. In total, they have subscribed for 48.2288 million shares, accounting for approximately 34.45% of the globally offered shares. The participation of top-tier industrial capital underscores deep recognition of its industry position and growth prospects.

Fundraising will be primarily allocated to:Approximately 45% for product portfolio diversification and upgrading to consolidate industry leadership;Approximately 27% for expanding global business and increasing production capacity in China and Malaysia;Approximately 18% for potential strategic investments or acquisitions;The remaining 10% as working capital.

Risk Focus: Industry Competition, Raw Material Costs, and Geopolitical Policies

Highly fragmented industry with intensifying competition: The markets for communication cables, heat-shrinkable materials, and NEV charging products, where the company operates, all have numerous participants and intense competition. For example, there are over 800 companies in the global heat-shrinkable materials industry and over 300 players in China's NEV charging products market. With the boom in the AI and data center industries, new entrants may intensify price competition, exerting continuous pressure on the company's market share and profit margins.

Risk of fluctuating raw material costs: Raw material costs (mainly copper, EVA, etc.) account for over 72% of the total cost of sales. Fluctuations in commodity prices directly impact the company's production costs. Although the company has established price linkage mechanisms with some major customers, these do not cover all orders. If raw material prices rise sharply and cannot be effectively passed on, it will erode the company's profits.

Uncertainty in trade tariff policies: A portion of the company's products are exported to overseas markets. In recent years, U.S. tariff policies on China have been frequently adjusted and remain highly uncertain. Although the company states that direct exports to the U.S. are limited and customers bear the tariffs, if tariffs remain high for a long time, it may still affect the procurement costs and willingness of its overseas customers, indirectly impacting the company's orders.

Increasing customer concentration and cash conversion cycle:In the first nine months of 2025, the revenue contribution from the top five customers rose to 19.3%, with the largest customer accounting for 9.7%, indicating an increase in customer concentration.Meanwhile, the credit period granted to customers (trade receivable turnover days of approximately 118 days) is significantly longer than the credit period obtained from suppliers (trade payable turnover days of approximately 66 days). This working capital mismatch may increase pressure on the company's operating funds.

Conclusion

Woer Heat-Shrinkable Material's listing on the HKEX presents the image of a mature industrial manufacturer with healthy finances, a focused main business, and global competitiveness in multiple niche segments. Its solid profit foundation, robust cash flow, and leading position in markets such as heat-shrinkable materials constitute its core value.

At the same time, investors need to fully focus on the risks of intense competition in its industry, fluctuating raw material costs, and uncertainty in international trade policies. The company's long-term value will depend on its ability to consolidate existing advantages, successfully seize growth opportunities brought by NEVs and AI data center infrastructure, and effectively manage the aforementioned risks.