New Stock Preview | Sendai Electric: Seizing the opportunity of card slot computing power distribution, difficult to conceal concerns about increasing revenue without increasing profits.

On June 10th, Fujian Sendon Electric Co., Ltd. (referred to as "Sendon Electric") submitted its application for listing on the main board of the Hong Kong Stock Exchange, with CISI FIN as its exclusive sponsor. The company was established in 1995 and is a technology-driven provider of intelligent distribution equipment and control systems, mainly serving the data center and power grid applications. Its products cover a variety of categories including high and low voltage switchgear, electrical components, intelligent busbars, electric vehicle charging equipment, and intelligent modular data centers, with customers across different industries such as communication, power, industry, transportation, construction, and petrochemical. In fact, this is not Sendon Electric's first attempt to enter the capital market. It applied for listing on the Growth Enterprise Market in 2016, withdrew in 2017; applied for listing on the Beijing Stock Exchange in 2023, withdrew again in 2024... This is already Sendon Electric's third attempt to make an impact on the capital market. However, the real question to ask is not "can it list", but rather - what is it selling? And, who will foot the bill for this story? Fundamental "AB Side": Leading positioning vs. Increased revenue but not profit Opening the prospectus, Sendon Electric's fundamentals show a clear "AB side". The good side is the appeal of the race-track narrative. In 2025, for the revenue of complete data center distribution equipment solutions, Sendon Electric ranks second in the country with a market share of 3.3%; for communication industry complete distribution equipment solutions, it ranks third with a 3.6% share. In 2026, in the AI industry chain, the market logic has shifted from solely pursuing computing power chips, to expanding into electricity, heat dissipation, cabinets, transformers, and distribution systems - the larger the computing power cluster, the more important factors like electricity access, stable power supply, and redundant systems become "preconditions" for project implementation. The differentiation of Sendon Electric lies in the fact that it does not pitch the narrative as a "large and comprehensive new energy equipment platform", but rather focuses more on data center and communication distribution. Low-voltage complete equipment is the revenue base, while high-voltage complete equipment, modular prefabricated boxes, intelligent distribution systems, and full life-cycle operations are the core elements that will determine the company's ability to unlock profit elasticity in the future. The bad side is the "warning signs" in the financial data. From 2023 to 2025, the company's revenues were 521 million yuan, 625 million yuan, and 655 million yuan respectively, with a compound annual growth rate of 12.2%. However, in 2025, the revenue growth rate dropped sharply from 20.0% in 2024 to 4.8%, indicating a significant weakening of growth momentum. In terms of profit, after a substantial year-on-year increase of 52.1% to 149 million yuan in 2024, net profit in 2025 dropped by 6.3% year-on-year to 140 million yuan. While revenue increased by about 30 million yuan, net profit shrank by nearly a million yuan, highlighting the dilemma of increased revenue without increased profit. Additionally, Sendon Electric's gross profit margin also dropped from 39.9% in 2024 to 37.2% in 2025, while administrative expenses increased by 34.0%. And if the slowdown in revenue growth is just a "gentle" description of the growth slowdown, then Sendon Electric's capital maneuvering is a more alarming signal. According to the prospectus, in 2024 and 2025, Sendon Electric distributed dividends of 101 million yuan and 144 million yuan respectively, with the dividends distributed in 2025 even exceeding the net profit for that year. The total dividends distributed over the two years amount to 245 million yuan, accounting for over 80% of the total net profit for the two years. At the same time, the company's current liabilities soared to 434 million yuan by the end of 2025, an 82% year-on-year increase. Trade and other receivables increased by 107 million yuan, while cash and cash equivalents decreased from 212 million yuan to 188 million yuan year on year. From the above, although Sendon Electric is in a favorable position with AI distribution, the market share data is enticing. However, the other side revealed in the prospectus is alarming: revenue growth slowing down, net profits declining, gross margin decreasing, and tight cash flow. More importantly, while distributing almost 80% of the profits as dividends, the company is heading to Hong Kong to raise capital in a high-debt stance. The dividend from the red track has yet to materialize, while the fundamentals are already showing concerns. Development "Mirrored Side": AI dividend high growth vs. insufficient operational independence Distribution equipment is the core infrastructure for the normal operation of data centers, communication base stations, and digital infrastructure, and is an indispensable "hardware heart" for the computing industry. With the current iteration of AI technology and exponential growth in computing power demand, coupled with the deep coverage of 5G networks and the smart transformation of traditional power grids, the entire distribution equipment industry is entering a long-term golden development period, providing ample growth opportunities for companies in this track. According to the prospectus data, the market size of complete distribution equipment solutions in the Chinese communication industry (calculated by revenue) has grown from 64 billion yuan in 2021 to 103 billion yuan in 2025, with a compound annual growth rate of 12.6%. By 2030, the market size of complete distribution equipment solutions in the Chinese communication industry is expected to reach 202 billion yuan, with a compound annual growth rate of 14.4% from 2025 to 2030. Within this, data center industry, as a subset of the communication industry, benefits from the rapid development of AI technology stimulating the demand for computing power, with even more significant growth. From 2021 to 2025, the market size of complete distribution equipment solutions in the Chinese data center industry has increased from 36 billion yuan in 2021 to 67 billion yuan in 2025, with a compound annual growth rate of 16.8%. With the accelerated construction of data centers, by 2030 the market size is estimated to reach 159 billion yuan, growing at a compound annual growth rate of 18.9% from 2025 to 2030. And the biggest investment opportunity for Sendon Electric lies in the distribution demand driven by AI data center construction. According to related research reports, the traditional IDC single park power capacities are mostly concentrated in the range of 5MW to 20MW, with relatively controllable distribution pressures; whereas the large-scale intelligent computing parks being implemented currently, individual park power capacities generally reach 50MW to 200MW, with some supercomputing cluster capacities comparable to the electricity demand of small towns. The mid-voltage distribution industry is seeing an upgrade in core demand, and the AI intelligent computing center scene is seen as a certain growth opportunity for the domestic mid-voltage distribution market for the next three years. However, how wide is the "moat" of Sendon Electric? In a market with numerous competitors, a 3.3% market share is not high - but this share itself reveals a fact: the leading companies in this industry have not yet formed an absolute monopoly; specialized private enterprises still have room to push upwards. On the competitor side, foreign giants like Schneider, ABB, Eaton have global channels and component capabilities; state-owned enterprises like Panhigh, Xujie have long been entrenched in the national power grid system; private enterprises like Shijiazhuang Kelin Electric have diversified business into charging piles, photovoltaics, among others. The differentiation of Sendon Electric does exist, but whether it can sustainable competitive advantage depends on order structure and project quality. In addition, deep customer ties, constraints in the supply chain, also serve as a ceiling for the growth of Sendon Electric. According to the prospectus, in 2025, Sendon Electric's top five customers accounted for a high 82.9% of revenue, with a single largest customer accounting for 36.4% of revenue, showing a high dependence on a few key customers. Any adjustment in customer procurement strategy, budget cuts, or changes in cooperation could directly impact the company's operations. Furthermore, Sendon Electric maintains a high level of external dependency in its supply chain. The company's core components are mainly sourced from overseas brands such as Schneider, ABB, with insufficient self-supporting capabilities. Fluctuations in upstream raw materials, components prices, supply interruptions can all have negative impacts on production operations and cost control. In Summary In summary, it is not difficult to see that Sendon Electric has two sides on the scale of investment value. The good side is that it stands at a real and huge updraft - with over 5 trillion yuan in power grid investments in the "Thirteenth Five-Year Plan", accelerated establishment of AI data centers, "AI-electricity collaboration" becoming an important direction for new infrastructure construction. The distribution industry is no longer just a "backdrop", but a "base" in the computing economy. In the era of AI, computing power is a necessity, but stable delivery of each unit of electricity is the foundation of the digital world. The pessimistic side is the structural flaws of the company itself that are difficult to repair in the short term: high customer concentration, rising financial leverage, large dividend payouts squeezing operating cash flow, and operational flaws bring trust discount. These issues cannot be masked by the red track dividends. Therefore, for investors with a higher risk appetite, if the IPO price is reasonable, Sendon Electric has a certain degree of bargaining flexibility; but for conservative investors, it is recommended to pay attention to clear signals of future order growth and improved corporate governance before making a judgment. The capital market does not believe in emotions, only believes in financial reports - Sendon Electric's road to Hong Kong is not just a "blood transfusion" breakout, but also a scrutiny of value.