Zhejiang Huaye goes public! From a breakthrough in performance to a "hidden champion" advancing in globalization

　　01

　　Zhejiang Huaye Plastic Machinery has officially listed on the Growth Enterprise Market of the Shenzhen Stock Exchange

　　On March 27, 2025, Zhejiang Huaye Plastic Machinery Co., LTD. (stock code: 301616.SZ) officially listed on the Growth Enterprise Market of the Shenzhen Stock Exchange. As a leading enterprise in the core components field of domestic plastic molding equipment, Zhejiang Huaye's successful listing this time marks a new stage in the company's development and will further consolidate its leading position in the industry by leveraging the power of the capital market.

　　Zhejiang Huaye's main products include screws, barrels, Corinth columns and related accessories for plastic molding equipment. The company has been dedicated to the research and development and manufacturing of core components for plastic molding equipment for 30 years and has become a leading manufacturer of customized core components for plastic molding equipment in the industry. It has won the recognition of many high-quality customers and established long-term and stable cooperative relationships with many well-known plastic molding equipment manufacturers at home and abroad. The customer base includes international giants such as Engel and Husky. As well as leading domestic enterprises such as Yizumi and Haitian Plastic Machinery.

　　As one of the few domestic manufacturers capable of supplying core components for super-large plastic molding equipment, Zhejiang Huaye continuously assists domestic plastic molding equipment manufacturers in breaking through key technologies and promoting the localization process of plastic molding equipment in China.

　　02

　　The market share of the product ranks first in China

　　Against the backdrop of cyclical adjustments in the plastic machinery industry, Zhejiang Huaye has demonstrated remarkable anti-cyclical capabilities. According to the prospectus data, in 2024, the company predicts to achieve operating revenue of 900 million yuan, representing a 23.18% increase compared to 2023. The company predicts that it will achieve a net profit attributable to shareholders of the parent company of 92.2535 million yuan, representing a 31.24% increase compared to 2023. The company predicts that it will achieve a net profit attributable to the parent company's shareholders of 91.2228 million yuan after deducting non-recurring gains and losses, representing a 37.77% increase compared to 2023. The company also predicts that its business performance in 2024 will be good.

　　In the first quarter of this year, Zhejiang Huaye's performance continued to rise. The company expects its operating income for the period from January to March 2025 to be between 180 million and 200 million yuan, representing a year-on-year growth of 2.54% to 13.93%. The net profit attributable to shareholders of the parent company ranged from 15.3 million yuan to 17.3 million yuan, increasing by 17.87% to 33.28% year-on-year. The net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was between 15 million yuan and 17 million yuan, representing a year-on-year increase of 17.59% to 33.27%.

　　What is the secret behind Zhejiang Huaye's performance growth against the industry cycle? Product "going global" combined with high-margin products.

　　To resist the impact of industry cycle fluctuations, the company actively adjusts its sales strategy and further expands the overseas sales market. In 2022, the company achieved overseas sales revenue of 81.9953 million yuan, and the proportion of overseas sales revenue in the main business revenue increased from 7.65% in 2021 to 10.53%, mainly due to the increase in Husky sales revenue.

　　On the other hand, since 2022, benefiting from the rapid development of the new energy vehicle industry, the demand for large-sized barrel and screw products with relatively high gross profit margins has increased rapidly. In 2022, the proportion of the company's large-sized model barrel and screw sales revenue in the total barrel and screw sales revenue increased by 10.46 percentage points.

　　By 2023, the company had intensified its sales efforts on large and medium-sized barrel and screw products with higher gross margins. The sales volume proportions of large and medium-sized screw barrels increased by 0.38 percentage points and 1.15 percentage points respectively compared to 2022. Meanwhile, the company has reduced the sales efforts of small screw barrel products with relatively low gross profit margins and relatively intense competition. The sales volume proportion of small screw barrel products has decreased by 3.07 percentage points compared with 2022.

　　According to statistics from the China Plastics Machinery Industry Association, from 2020 to 2023, Zhejiang Huaye's market share in the domestic plastic machinery screw and barrel products was 8%, 10%, 12%, and 12.5% respectively, ranking first in the market.

　　03

　　"Hidden Champions" in niche fields

　　Zhejiang Huaye's ability to produce high-margin products is related to its professional expertise. The company is one of the few domestic manufacturers capable of supplying core components for super-large plastic molding equipment. It is also one of the earliest enterprises to grow together with major domestic plastic molding equipment manufacturers, continuously assisting Chinese plastic molding equipment manufacturers in breaking through key technologies.

　　Zhejiang Huaye was established in 1995, with its headquarters located in Zhoushan, Zhejiang Province. It focuses on the research and development and production of core components for plastic molding equipment. Its main products include screws, barrels, columns and related accessories. According to the prospectus, the company's products are the "heart components" of injection molding machines, extruders and other equipment, directly determining the performance and lifespan of the equipment, and are a key link in the "industrial mother machine" of polymer composite materials. According to the prospectus, from 2021 to 2023 and from January to June 2024, Zhejiang Huaye's R&D investment was 21.1845 million yuan, 21.6635 million yuan, 22.9850 million yuan, and 13.2224 million yuan respectively, showing a year-on-year upward trend, laying a solid foundation for the competitiveness of its products.

　　In January 2023, the 8,500-ton super-large precision intelligent injection molding equipment developed by Yizhimi is a new product independently developed in response to the world's scientific and technological frontiers and major national demands. Its various indicators and performance have reached the international advanced level. The 8,500-ton super-large injection molding machine of Yizhimi has independent intellectual property rights, achieving a key technological breakthrough in domestic super-large industrial mother machines and filling the gap in this field in China. As a long-term partner of Yizumi, Zhejiang Huaye is the supplier of the core component, the screw barrel, for this super-large injection molding machine. The company has been successively rated as a "High-tech Enterprise" and a "Hidden Champion" enterprise in Zhejiang Province. In 2019, the company was selected as one of the first batch of specialized, refined, distinctive and innovative "Little Giant" enterprises by the Ministry of Industry and Information Technology. As of June 30, 2024, the company has obtained 15 invention patents and 110 utility model patents.

　　As a hidden champion in a niche field of the industry, the company has successfully entered the supply systems of the world's major plastic molding equipment manufacturers and has become a customized core component manufacturer of plastic molding equipment with global supply capabilities. Its products not only supply the domestic market but are also exported to countries and regions such as Canada, the United States, Germany, India, and Japan. At present, the company has established long-term and stable cooperative relationships with many leading plastic molding equipment manufacturers at home and abroad. The overseas customers mainly include Engel, Husky, KraussMaffei, Sumitomo Demag, Milacron and Davis-Standard. The company has deepened cooperation with traditional industrial powerhouses such as Germany and Italy by establishing overseas technical service centers, and the growth rate of overseas orders has also been very fast.

　　04

　　Fundraising achieves an intelligent "metamorfication"

　　In fact, the plastic industry is a major sector in China's manufacturing industry. According to the forecast of Qianzhan Industry Research Institute, the CAGR of the domestic plastic machinery industry market size is expected to be 5.68% from 2023 to 2028. By 2028, the market size of specialized equipment for plastic processing across the country is expected to exceed 140 billion yuan.

　　According to the statistics of Grand View Research, the market size of extruders in China was 1.475 billion US dollars in 2023 and is expected to reach 2.185 billion US dollars by 2030, with a compound annual growth rate of approximately 5.8%. At present, China is still in the in-depth development stage of industrialization, informatization, urbanization, marketization and internationalization, and is still in an important strategic opportunity period for development. This will also provide an inexhaustible driving force for the development of the extruder industry.

　　At present, the scale growth of the screw industry is still ongoing. According to the statistics of the "China Plastic Machinery Industry Yearbook 2021", the output value of the plastic machinery screw industry in Jintang Town reached 7.6 billion yuan in 2021, increasing by 11.33% year-on-year. Based on the fact that the screw industry in Jintang Town accounts for 75% of the national total, and the annual growth rate of the industry is estimated to be 11.33% in 2021, the output value of China's screw industry is expected to reach 13.983 billion yuan in 2024.

　　Globally, developed countries in the plastic machinery industry, such as Germany, the United States, and Japan, have almost monopolized the high-end market by virtue of their advantages in precision, large-scale, and high-end plastic machinery products and talents, and have occupied an important position in the world's plastic machinery industry. Compared with markets such as Europe, America and Japan, there is broad space for the research and development and localization of high-end plastic machinery in China. In recent years, leading domestic plastic machinery enterprises represented by Zhejiang Huaye have been making continuous efforts in the high-end market. The import substitution of domestic plastic machinery products has been increasingly strengthened, and the competitiveness in overseas markets has been rising year by year. The export volume of plastic machinery has been continuously increasing. As of the end of June 2024, Zhejiang Huaye had 187 million yuan in orders in hand, an increase of 35.70% compared to the end of 2023, making a successful breakthrough in domestic substitution.

　　The company's strength has established its say. Zhejiang Huaye has participated in the drafting and formulation of five industry and group standards.

　　For instance, Zhejiang Huaye has taken the lead in participating in the drafting and formulation of multiple Zhejiang manufacturing group standards, including "T/ ZZB1013-2019 'Bimetallic Single Barrel for Plastic Machinery'" and "T/ ZZB0873-2018 'All-Hard Single Screw for Plastic Machinery'". At the same time, it also participated in the formulation of industry standards such as "JB/ T8538-2011 'Barrels and Screws for Plastic Machinery'".

　　The future global competitiveness of "Made in China" requires digitalization. Currently, the company has formed a full industrial chain technological advantage ranging from material modification to precision processing. If it needs to go further, Zhejiang Huaye needs to be highly integrated with the capital market, raise funds to expand production and further consolidate its technological "moat". Zhejiang Huaye stated that the relevant fundraising and investment projects are an expansion of the company's existing business chain, which will help alleviate the increasingly prominent production capacity pressure of the company, solve the problem of tight production capacity, and thereby better meet the downstream demand.

　　According to the prospectus, the funds raised this time will be used in four major directions - expansion of the production base (Phase I), intelligent technological transformation, construction of the research and development center, and supplementation of working capital.

　　Although Zhejiang Huaye has a set of information-based management systems, it still cannot effectively and deeply integrate information-based management with industrial production. There is still considerable room for improvement in the intelligent management of the entire life cycle of product production from the production process to the final delivery. Meanwhile, with the continuous increase of automated and intelligent production lines in the future, The existing information systems cannot fully meet the demands of intelligent production management. Therefore, the company needs to further optimize the information-based management system and enhance the level of intelligent management. This project aims to carry out intelligent transformation of the existing production line by introducing automated and intelligent equipment and advanced software, and effectively integrate it with the company's information system, in order to enhance the intelligent management level and thereby achieve the goal of improving production efficiency.

　　This "hidden champion" that has been deeply involved in the industry for three decades is now making a stunning transformation from a plastic machinery parts manufacturer to a global plastic molding solution service provider with the support of the capital market. Its development path not only provides a model reference for China's high-end manufacturing enterprises, but also reshapes the competitive landscape of the global plastic machinery industry chain.

　　Source: Everyday Economic News