New Share News | Hua Cheng Power Files for Listing on the Hong Kong Stock Exchange, Focusing on New Type of Electric Power Energy and Deepening in the Southern Electricity Market.

According to the disclosure by the Hong Kong Stock Exchange on May 15, Guangdong Huacheng Electric Power Energy Co., Ltd. (referred to as Huacheng Electric Power) has submitted its listing application to the Main Board of the Hong Kong Stock Exchange, with Ligo Enterprise Financing Limited as its exclusive sponsor. Company Profile The prospectus shows that Huacheng Electric Power is a comprehensive energy solution provider focusing on new types of electric power energy in China. According to a Frost & Sullivan report, the company is one of the only two privately-owned enterprises in Guangdong Province that hold both a Class A license for power project design and consultation. After many years of operation, the company has transformed from an electric power design agency to a comprehensive energy solution provider. During the reporting period, in order to expand the company's upstream business operations, the company began investing in and operating new energy power projects. Therefore, during the reporting period, the company's business was divided into the following three operational segments: Survey, design, and consulting services: Providing related services for specific photovoltaic power generation, wind power generation, transmission, distribution, and energy storage projects. This includes consulting services provided to customers in the project initiation stage (such as preparing project plans, project proposals, feasibility study reports, and project application reports) and survey and design services provided during the project construction stage (such as preparing preliminary designs, construction drawings, and completion designs). The company is entitled to receive service fees after performing the corresponding performance obligations. EPC services, where the company acts as the general contractor responsible for the overall management and control of specific electric power infrastructure construction projects, or as a subcontractor to carry out specific tasks in the process. The main steps of this process include surveying, design, procurement and management of materials and equipment, construction supervision, grid connection inspections, and project deliverables. After delivering ready-made electric power facilities to customers or completing specific tasks assigned, the company is entitled to receive service fees calculated based on the completed amount and complexity of the project. Other services, including (a) operation and maintenance services for substations, transmission lines, and photovoltaic power generation facilities; and (b) investment and operation of new energy power projects, including elements of power trading, where the electricity generated from the company's invested new energy generation facilities is sold on the power trading platform. The company's clients include the subsidiaries of the major power grid enterprise in the region, China Southern Power Grid Co., Ltd., a central enterprise responsible for electric power investment, construction, and operation in five provinces in southern China (Guangdong, Guangxi, Yunnan, Guizhou, and Hainan). Financial Information Revenue In the fiscal years of 2023, 2024, and 2025, the company achieved revenues of approximately RMB 341 million, RMB 322 million, and RMB 407 million, respectively. Profit In the fiscal years of 2023, 2024, and 2025, the company recorded net profits and comprehensive income totals of approximately RMB 17.536 million, RMB 34.037 million, RMB 36.919 million, respectively. Gross profit margin In the fiscal years of 2023, 2024, and 2025, the company's gross profit margins were 18.2%, 28.8%, and 26.5%, respectively. Industry Overview The Chinese energy solution market grew rapidly from RMB 356.6 billion in 2020 to RMB 750 billion in 2024, with a compound annual growth rate of 20.4% from 2020 to 2024. The growth is primarily driven by the dual-carbon targets and the construction of new types of electric power systems. It is expected that the market will maintain a compound annual growth rate of 13.8% from 2025 to 2030, reaching RMB 1.716 trillion by 2030. The growth of the Chinese energy solution market is mainly driven by the country's dual-carbon targets, which aim to peak carbon emissions by 2030 and achieve carbon neutrality by 2060, supported by government policies and incentive measures to accelerate the deployment of renewable energy and green certification. With urbanization, industrialization, electrification, and sustained economic growth, the demand for electricity is rapidly increasing, leading to significant investment needs in electricity infrastructure. The rapid technological advancements and cost reductions in photovoltaic, wind power, energy storage, and grid systems, coupled with large-scale modernization and investment in smart infrastructure, are driving the transformation towards higher penetrations of renewable energy and more resilient new types of electric power systems. Driven by the national "dual-carbon" strategy and the "14th Five-Year Plan," the total investment in the CHINA POWER project surged from RMB 1.0188 trillion in 2020 to RMB 1.8178 trillion in 2024, with a compound annual growth rate of 15.6%. The growth trend is expected to continue, reaching RMB 1.7323 trillion in 2025 and RMB 3.1584 trillion in 2030, with a compound annual growth rate of 12.8%. Historically, power engineering projects have been the main driver of growth, reaching RMB 1.2094 trillion in 2024 with a compound annual growth rate of 23.0%. Looking ahead, the growth of the supply side will stabilize, with a compound annual growth rate of 15.1%, reaching RMB 2.21 trillion by 2030. In contrast, grid engineering projects are entering an acceleration phase to support the construction of new types of electric power systems and address the bottleneck of renewable energy grid connection. Grid investments are forecasted to accelerate from a historical compound annual growth rate of 5.6% (reaching RMB 608.4 billion in 2024) to a predicted compound annual growth rate of 8.2%, reaching RMB 948.4 billion by 2030. In the field of power supply, wind energy and CECEP Solar Energy projects have shown explosive historical growth, increasing from RMB 327.8 billion in 2020 to RMB 764.1 billion in 2024, with a high compound annual growth rate of 23.6%. It is expected that this figure will reach RMB 1.59 trillion by 2030, with a compound annual growth rate of 14.1%. CECEP Solar Energy generation serves as the main engine, with investments soaring to RMB 447.8 billion in 2024, driven by reduced supply chain costs and the widespread adoption of distributed CECEP Solar Energy. The historical compound annual growth rate reached 63.6%. As the market shifts from rapid capacity expansion to systematic integration, the predicted growth rate of CECEP Solar Energy will stabilize at 18.4%, reaching RMB 1.148 trillion by 2030. Although this growth rate may slow down, the additional investment of nearly RMB 654.6 billion from 2025 to 2030 is almost double that of the historical period, ensuring that CECEP Solar Energy remains a primary engine for energy transformation. At the same time, wind energy investments will gradually increase, driven by high-value offshore wind projects and the upgrading and renovation of existing onshore wind turbines. The growth rate is expected to accelerate from a historical compound annual growth rate of 4.5% (reaching RMB 316.3 billion in 2024) to a predicted compound annual growth rate of 6.1%, reaching RMB 442 billion by 2030. China's market-based trading volume of electricity continues to grow, increasing from 316.74 billion kWh in 2020 to 617.96 billion kWh in 2024, with a compound annual growth rate of 18.2%. It is expected to reach 1.24603 trillion kWh by 2030, with a compound annual growth rate of 13.0% from 2025 to 2030. This development trend is mainly due to the continuous promotion of electricity market liberalization reforms, including the gradual establishment of a unified national market, expansion of spot and ancillary services trading, and comprehensive incorporation of renewable energy into competitive mechanisms to improve resource allocation efficiency, promote cross-regional flow, and support the development of new types of electric power systems. Board of Directors Information The Board of Directors is responsible for and has general power to manage and operate the business. The Board of Directors consists of eight directors, including five executive directors and three independent non-executive directors. Directors serve for a term of three years from the date of approval by the company's shareholders' meeting and may be re-elected upon the expiration of their term. Equity Structure Zhuhai Jierong and Zhuhai Jiehua are employee holding platforms, and Mr. Ren is the general partner of Zhuhai Jierong and Zhuhai Jiehua. Zhuhai Zhichen has 66.67% and 1.67% equity interests owned by Ms. Xu (Mr. Ren's spouse) and Mr. Ren, respectively. Professional Team Sponsor: Ligo Enterprise Financing Limited Company Legal Counsel: Hong Kong Law: John Steven Huang Law Firm; Chinese Law: Beijing Deheng Law Firm; Macao Law: Macau Xinxi Law Firm and Private Notary; Philippine Law: Ocampo & Manalo Law Firm Sponsor Legal Counsel: Hong Kong Law: Stewart & Watt Law Firm; Chinese Law: Jincheng Law Firm Auditor and Reporting Accountant: Deloitte Touche Tohmatsu Certified Public Accountants Industry Consultant: Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch Compliance Consultant: Ligo Enterprise Financing Limited