Hengkang New Energy plans to raise no more than 1.652 billion yuan through a private placement to strengthen its core business with Midea Group

China Fund Reporter Xia Tian

On the evening of February 27, He Kang Xin Neng (Stock Code: 300048) announced a private placement plan, proposing to issue no more than 288 million shares to Midea Group, its indirect controlling shareholder, at a price of 5.73 yuan per share, raising up to 1.652 billion yuan. The funds will be used for five major projects including high-voltage inverters, photovoltaic inverters, residential energy storage, and to supplement working capital.

Currently, Midea Group holds 209 million shares of He Kang Xin Neng through its controlling subsidiary Midea HVAC, accounting for 18.50% of the total share capital. After this private placement, Midea Group and its concerted party Midea HVAC will hold a combined stake of 35.08%, further strengthening its control over He Kang Xin Neng.

As of the close on February 27, He Kang Xin Neng’s stock price was 7.6 yuan, with a market value of nearly 8.6 billion yuan.

Expanding core business with a private placement of no more than 1.652 billion yuan

The announcement shows that Midea Group will fully subscribe with cash, and the raised funds will be invested in five core areas: high-voltage inverter research and industrialization, photovoltaic grid-connected inverter research and industrialization, residential energy storage system research and industrialization, distributed photovoltaic benchmark power station construction and research, and a reserved 300 million yuan for working capital, forming a comprehensive layout of “technology R&D + capacity expansion + financial security.”

Regarding the purpose and significance of this private placement, He Kang Xin Neng stated four main points:

1. Strengthen the controlling shareholder position, stabilize company control, and improve governance.

2. Improve the dual main business layout of electrical equipment and new energy, consolidate industry leadership, and expand into high-growth sectors. High-voltage inverters are He Kang Xin Neng’s traditional advantage; related R&D and industrialization projects will upgrade production lines to intelligent automation, further enhancing capacity and technology levels. The “photovoltaic grid-connected inverter research and industrialization project” and “residential energy storage system research and industrialization project” will leverage Midea’s overseas brand and channel advantages to seize the strategic opportunity of rapid growth in global photovoltaic inverter markets, consolidating its position in the new energy sector.

3. Promote the company’s strategic transformation from “photovoltaic power station builder” to “smart energy operator.” He Kang Xin Neng plans to build a benchmark smart photovoltaic power station project, selecting high-quality feed-in tariff regions for EPC self-operation. The project will include an AI smart energy operation system to achieve intelligent management throughout the entire lifecycle of the photovoltaic station, and expand new profit models such as virtual power plants and electricity trading. This will accelerate the company’s transformation into a “smart energy operator.”

4. Strengthen financial capacity and optimize capital structure. As of the end of September 2025, He Kang Xin Neng’s asset-liability ratio was 61.56%. The 300 million yuan in additional working capital will effectively ease operational funding pressures and reduce financial risks.

Since Midea Group took controlling interest in He Kang Xin Neng in 2020, the company’s revenue has steadily grown, though profit performance has fluctuated significantly. The recent earnings forecast indicates that by 2025, the company expects net profit attributable to parent to be between 50 million and 75 million yuan, a year-on-year increase of 385.62% to 628.43%.

Midea Group further enhances A-share control layout

This full subscription to He Kang Xin Neng’s private placement not only increases Midea Group’s control over He Kang Xin Neng but also represents an important step in deepening its “industrial control + new energy” strategy and improving its industrial ecosystem.

He Kang Xin Neng’s technological advantages in high-voltage inverters and photovoltaic inverters complement Midea Group’s industrial technology and building automation businesses, making it an important listed platform for Midea in industrial automation and new energy power electronics. The private placement will promote in-depth collaboration in R&D, manufacturing, and market channels, helping Midea realize the full “source-grid-load-storage-heat” chain.

According to the announcement, Midea Group is a global leading technology conglomerate covering smart home, industrial technology, building automation, robotics and automation, new energy, healthcare, and smart logistics. It has established a balanced business matrix of To C and To B, providing consumers with various smart home products and services, and offering diversified business and industrial solutions for enterprise clients. As of June 30, 2025, Midea Group has over 400 subsidiaries worldwide, 38 R&D centers, and 63 major manufacturing bases, with more than 190,000 employees, operating in over 200 countries and regions. It has 22 R&D centers and 41 major manufacturing bases overseas, across more than ten countries.

The reporter’s review shows that Midea Group currently controls multiple A-share listed companies directly or indirectly, forming an industrial matrix across home appliances, new energy, healthcare, and other fields. Its subsidiaries work together to support diversified development.

In addition to He Kang Xin Neng, Midea Group also holds 45.46% of Wandong Medical (Stock Code: 600055) as of the third quarter of 2025, focusing on medical equipment to help Midea enter the healthcare sector. It also owns 22.79% of Kelun Electronics (Stock Code: 002121), which specializes in smart grid and energy storage, with net profit expected to increase by over 100% in 2025, serving as an important support for Midea’s energy storage business.

Furthermore, He Qianchang, daughter of Midea founder He Xiangjian, owns 25.58% of Huitong Co., Ltd. (Stock Code: 688219), the actual controller of the company. Huitong specializes in the research, production, and sales of polymer modified materials and is an affiliated company of Midea Group, with extensive business cooperation. Huitong supplies PEEK materials for Midea’s humanoid robot projects, used in joints and transmission parts. In 2024, Midea was Huitong’s largest customer, accounting for 25.54% of sales.