Zhenjiang Co., Ltd.'s debt ratio exceeds 70% for the first time, plans to raise 1 billion yuan to expand production, increasing revenue but not profit. The US factory's performance falls short of expectations.

Yangtze Commercial News ●Yangtze Commercial News reporter Xu Jia

With pressure continuing on the profit side, Zhenjiang Co., Ltd. (603507.SH) is planning another round of refinancing to further expand capacity.

On the evening of March 31, Zhenjiang Co., Ltd. released a private placement plan, proposing to issue shares non-publicly to raise funds of no more than RMB 1 billion, mainly for projects such as the industrialization of core components of offshore wind turbines at the multi-megawatt scale.

Yangtze Commercial News reporter noted that the company’s fund-raising and investment projects in this private placement focus on its core wind power equipment business. Through the implementation of the fund-raising and investment projects, Zhenjiang Co., Ltd. will add production capacity for core components of offshore wind turbines, enrich its product categories, and achieve product diversification.

On the same day, Zhenjiang Co., Ltd. released its annual report. In 2025, it achieved operating revenue of RMB 3.97B, a year-on-year increase of 0.65%; net profit attributable to shareholders of the listed company (hereinafter referred to as “net profit attributable”) was RMB 111 million, and net profit after deducting non-recurring gains and losses (hereinafter referred to as “net profit after non-recurring items”) was RMB 140 million. Both declined year over year by 37.48% and 18.86%, respectively, marking two consecutive years of revenue growth without profit growth.

Among them, factors such as the high costs during the ramp-up period of capacity for new projects, and the fact that the U.S. photovoltaic mounting bracket factory’s results fell short of expectations, have all dealt a blow to the company’s profit side.

By the end of 2025, Zhenjiang Co., Ltd.’s asset-liability ratio first exceeded 70%, reaching 71.69%, up 8.04 percentage points compared with the end of 2024.

Plan to add RMB 1 billion to strengthen the wind power core business

According to the private placement plan, Zhenjiang Co., Ltd. intends to issue no more than 55.2904 million shares through a non-public offering to no more than 35 specific investors, with total proceeds of no more than RMB 1 billion, to be allocated to the following: the industrialization project of core components for multi-megawatt offshore wind turbines; the green and intelligent casting project for wind power core components (Phase I) with an annual capacity of 200k tons; and replenishment of working capital.

Against the backdrop of the continued advancement of the global energy green transition, the private placement fund-raising and investment projects of Zhenjiang Co., Ltd. focus on the core wind power equipment business. By building new capacity for multi-megawatt wind power components and adding capacity for producing wind power castings, the company aligns with industry development trends, meets customers’ diversified product needs, enriches its product categories, and consolidates its advantageous position in the industrial chain.

Specifically, in the fund-raising and investment projects, the total investment in the industrialization project for core components of multi-megawatt offshore wind turbines is RMB 1.6 billion, of which RMB 500 million is planned to be used from the raised funds. Through the implementation of this project, Zhenjiang Co., Ltd. will add annual production capacity of 800k tons for core components of multi-megawatt offshore wind turbines, including rotor and generator stator components, wind turbine towers, steel pipe piles, jacket structures, floating platforms, steel structural components, and also add annual machining and coating capacity of 200k tons of castings.

Meanwhile, the annual capacity 200k-ton green and intelligent casting project for wind power core components (Phase I) has a total investment of RMB 1.0 billion, with RMB 277 million planned to be used as raised funds.

After the project is implemented, Zhenjiang Co., Ltd. will build a casting production line with an annual casting production capacity of 150k tons for high-end wind power components, establishing independent supply capability for wind power casting products such as hubs, bases, main shafts, and bearing seat components.

As the company’s wind power equipment products currently mainly focus on three major categories—rotors, stators, and tower sections—its production processes mainly rely on welding and mechanical machining, resulting in a relatively concentrated product structure. Through the implementation of this project, Zhenjiang Co., Ltd. aims to enrich its product categories, complete the casting production processes for wind power products, achieve product diversification, and thereby enhance its overall profitability and industry influence.

In addition, Zhenjiang Co., Ltd. plans to use RMB 223 million of the raised funds to replenish working capital to meet the company’s day-to-day production and operating funding needs, further ensuring the company’s financial security and enhancing its market competitiveness.

Yangtze Commercial News reporter noted that as of the end of 2025, Zhenjiang Co., Ltd.’s total assets were RMB 200k, and the asset-liability ratio was 71.69%, exceeding 70% for the first time. This is up 8.04 percentage points from the end of 2024, representing the highest level since the company listed in 2017.

Among them, Zhenjiang Co., Ltd.’s short-term borrowings, long-term borrowings, and non-current liabilities due within one year increased from RMB 800k, RMB 200k, and RMB 200k at the end of the prior year to RMB 150k, RMB 9.02B, and RMB 1.64B, respectively, with the debt burden clearly increasing.

Revenue declines for two major businesses

As an upstream parts supplier for the new energy equipment industry, Zhenjiang Co., Ltd.’s main businesses include the design, machining, and sales of wind power equipment, photovoltaic/solar thermal equipment components, and fasteners, as well as offshore wind installation and operation and maintenance services. In November 2017, the company listed on the Shanghai Stock Exchange’s main board.

Behind the capacity expansion through this private placement, Zhenjiang Co., Ltd. has already fallen into a performance growth bottleneck. The annual report shows that in 2025, Zhenjiang Co., Ltd. achieved operating revenue of RMB 423M, up 0.65% year over year; net profit attributable to shareholders was RMB 111 million, and net profit after deducting non-recurring gains and losses was RMB 140 million, down 37.48% and 18.86% year over year, respectively.

This marks two consecutive years of Zhenjiang Co., Ltd.’s revenue growth without profit growth. Previously, in 2023 and 2024, the company achieved operating revenue of RMB 643M and RMB 2.21B, respectively, with year-on-year growth of 32.28% and 2.71%; net profit attributable was RMB 184 million and RMB 178 million, respectively, with year-on-year growth of 93.57% and -2.99%; and net profit after deducting non-recurring gains and losses was RMB 182 million and RMB 173 million, respectively, with year-on-year growth of 475.54% and -5.13%.

Regarding the decline in performance in 2025, Zhenjiang Co., Ltd. cites four reasons: first, during the reporting period, non-recurring losses such as FX forward hedging and similar items increased significantly year over year, directly dragging down net profit attributable for the period. Second, the Nantong Phase I project was still in the capacity ramp-up stage, and capacity had not been released fully and effectively, leading to high fixed amortization and depreciation expenses, further squeezing profit margins. Third, the U.S. photovoltaic mounting bracket factory’s results were below expectations. On the one hand, the project was in the early stage of commissioning, with high fixed costs and insufficient realization of scale benefits; on the other hand, affected by the macroeconomic policy expectations of U.S. President-elect Trump, some downstream customers became more cautious, with insufficient order handoffs, which had an adverse impact on the company’s overall profitability. Fourth, during the reporting period, the company’s subsidiary Shanghe Ocean Engineering was affected by the expiration of long-term contracts and the domestic offshore wind industry environment, leading to a clear decline in revenue. With fixed costs basically unchanged, year-on-year profit decreased significantly.

In 2025, Zhenjiang Co., Ltd.’s wind power and photovoltaic businesses achieved operating revenue of RMB 693M and RMB 1.02B, respectively, representing year-on-year declines of 1.82% and 5.4%.

Yangtze Commercial News reporter also noted that in August 2022, Zhenjiang Co., Ltd. raised funds via a private placement, with net proceeds of RMB 558 million. Among them, the U.S. photovoltaic mounting bracket component production line construction project reached its scheduled “ready for use” status in June 2024. However, due to orders falling short of expectations, business uncertainty increased. From 2024 to 2025, this project cumulatively generated benefits of -RMB 3.97B, failing to meet expectations.

In March 2026, Zhenjiang Co., Ltd. planned to sell the implementation entity, U.S. Zhenjiang, at a price of USD 22.15 million for this project.

Besides the U.S. project, another major fund-raising and investment project included in this private placement—the construction project of the cut-to-length and downstream material processing center—generated cumulative benefits of RMB 29.4887 million from 2023 to 2025, also below expectations. As for the 8MW-and-above wind turbine component project, it cumulatively generated benefits of RMB 229 million over three years, reaching expected benefits.

Although short-term performance faced pressure, Zhenjiang Co., Ltd. disclosed that it has ample orders on hand. The annual report shows that as of the end of 2025, the company’s orders on hand totaled RMB 3.84B, including RMB 3.95B for wind power equipment products, RMB 2.42B for photovoltaic equipment products, RMB 852M for fastener products, and RMB 24.37M for other orders. In addition, the order backlog framework by 2030 is approximately RMB 18.3 billion.

Editors: ZB

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