New stock outlook | Zhejiang Zhongjian Technology (002779.SZ) goes to Hong Kong for "gold digging", is the narrative of the leading garden machinery company Siasun Robot & Automation impressive?

A-share landscaping machinery leader Zhejiang Zhongjian Technology (002779.SZ) is not only actively laying out the intelligent Siasun Robot & Automation sector, seeking to create a second growth curve; at the same time, the company is also seeking to list in Hong Kong to complete its "A+H" capital layout. Behind the multiple approaches, perhaps this old-established manufacturing company founded in 1997 has a strong desire to further advance its business. Recently, Zhejiang Zhongjian Technology officially submitted its listing application to the Hong Kong Stock Exchange. As an important manufacturer of outdoor power equipment in China, data from Zueso Consulting shows that based on the global outdoor power equipment revenue in 2024, Zhejiang Zhongjian Technology ranks among the top ten in domestic outdoor power equipment manufacturers. According to the company's prospectus, Zhejiang Zhongjian Technology's products are sold to over 50 countries and regions worldwide, with most of the sales coming from Europe and North America. The product system covers two main categories, wheeled outdoor equipment and handheld outdoor tools, widely used in landscaping pruning, lawn maintenance, agricultural maintenance, and urban landscape management scenes. Although the company holds a leading position in its main market, it is worth noting that Zhejiang Zhongjian Technology's short-term performance is facing some pressure. The company's third-quarter report shows that in the first three quarters of this year, Zhejiang Zhongjian Technology's operating income was 649 million yuan, an increase of 4.45% year-on-year; net profit attributable to the mother was 22.499 million yuan, a decrease of 43.6% year-on-year; and net profit attributable to the mother after deducting non-recurring items was 19.1878 million yuan, a decrease of 42.68% year-on-year. It is reported that the pressure on profits during the period is mainly due to increased research and development expenses from the company's high-Korean subsidiary and Jianmi subsidiary. Considering that the company's new business in Siasun Robot & Automation is still in the strategic investment period, the increase in short-term capital expenditures squeezing profits is somewhat expected. Compared to short-term changes in performance, the focus of investors, in my opinion, should be on whether Zhejiang Zhongjian Technology can inject new momentum into its international development after listing in Hong Kong, and when the new layout of the Siasun Robot & Automation business can be realized in the medium and long term. GMTEight will also continue to monitor this. Stable fundamentals, short-term profit pressure At present, the majority of Zhejiang Zhongjian Technology's income comes from two categories: wheeled outdoor equipment and handheld outdoor tools. The former refers to lawn mower products, while the latter includes chainsaws and brush cutters. From 2022 to 2024, Zhejiang Zhongjian Technology's total revenue is projected to be 512 million yuan, 667 million yuan, and 971 million yuan, respectively. During these three years, the proportion of revenue from wheeled outdoor equipment continues to rise, from 30.1% in 2022 to 53.8% in 2024. In contrast, the proportion of revenue from handheld outdoor tools has decreased from 53.4% in 2022 to 32.6% in 2024. In addition to these two main businesses, Zhejiang Zhongjian Technology also generates income from other outdoor power equipment products and intelligent Siasun Robot & Automation products, as well as other businesses. Analyzing the revenue structure of Zhejiang Zhongjian Technology in the first half of this year, the proportion of revenue from wheeled outdoor equipment further expanded to 56.2%, while revenue from handheld outdoor tools decreased to 27.9%. During the same period, the proportion of revenue from other outdoor power equipment products and intelligent Siasun Robot & Automation products reached 11.6%, an increase of nearly 2 percentage points year-on-year. In addition, the proportion of revenue from other businesses also increased by 0.7 percentage points to 4.3%. In terms of geographical distribution, the vast majority of Zhejiang Zhongjian Technology's income comes from overseas regions. From 2022 to the first half of 2025, China's mainland accounted for only 14.3%, 10.7%, 7.7%, and 5% of the company's total revenue, showing a further shrinking trend. It is reported that this is mainly due to Zhejiang Zhongjian Technology's continued deepening of penetration in the European and American markets in recent years, and continuously expanding its global business footprint. In terms of profits, from 2022 to the first half of 2025, Zhejiang Zhongjian Technology's gross profit was 106 million yuan, 158 million yuan, 252 million yuan, and 149 million yuan, with gross profit margins of 20.7%, 23.8%, 26%, and 29.6%, respectively. During the same period, the company's net profit was 27.405 million yuan, 48.118 million yuan, 61.509 million yuan, and 45.678 million yuan, showing a trend of moderate expansion overall. However, as mentioned at the beginning of the article, affected by the strategic investment in new businesses, Zhejiang Zhongjian Technology has increased its research and development investment recently, which has eroded profits to some extent, leading to negative growth in several profit indicators in the third quarter of this year. Will listing in Hong Kong inject new momentum for future development? In recent years, the global outdoor power equipment industry has been showing a trend toward lithium-ion and intelligence. In order to consolidate its competitive advantage, Zhejiang Zhongjian Technology has made a series of new moves in its operational level. According to publicly available information, Zhejiang Zhongjian Technology established Shanghai Jiaoxing High Kan Siasun Robot & Automation Co., Ltd. in 2023, specializing in the development of a new generation of lawn mowers Siasun Robot & Automation products; in March 2024, the company invested in 1X Holding AS company, and together with SoftBank, OPEN AI, Samsung, SQT, and other international large institutions participated in the development opportunities of 1XSiasun Robot & Automation. In May of the same year, the company established a controlling subsidiary, Jiangsu Jianmi Intelligent Siasun Robot & Automation Co., Ltd., which had previously released four-legged Siasun Robot & Automation products. From the above intensive operational actions, it can be seen that Zhejiang Zhongjian Technology is no longer satisfied with its traditional manufacturing-oriented positioning, and the company is currently accelerating its transformation and upgrade towards high-end equipment and intelligent manufacturing. Around this long-term goal, Zhejiang Zhongjian Technology will continue to consolidate and enhance its dominant position in the field of outdoor power equipment, while also strengthening its layout in the strategic new track of intelligent Siasun Robot & Automation. It is worth mentioning that according to the company, in addition to developing lawn mowers Siasun Robot & Automation related to its main business, Zhejiang Zhongjian Technology will also invest more resources in creating an artificial intelligence technology matrix covering the hardware and software, key components, and complete systems in other areas of the four-legged Siasun Robot & Automation and intelligent Siasun Robot & Automation industry. Through this ambitious expansion plan, it is also evident that Zhejiang Zhongjian Technology is giving considerable priority to the Siasun Robot & Automation related business. On the flip side, although Siasun Robot & Automation is a hot topic in the global capital market, it is still in the early stages of commercialization. Moreover, in recent years, there have been increasingly more cross-border players entering the field. The future success of Zhejiang Zhongjian Technology in this new area may require more time to provide an "answer". For Zhejiang Zhongjian Technology, at this critical time when the company is continuing to increase its investment in the Siasun Robot & Automation industry, completing a listing in Hong Kong will undoubtedly help it mobilize more resources to develop new businesses. However, how to balance short-term performance with the long-term development of new businesses will also test the wisdom of Zhejiang Zhongjian Technology.