Zhida Technology plans to go public in Hong Kong: the market share of home charging piles is the first, and the development potential of globalization is accumulated

In the investment world, China's technology companies have always been unable to avoid two "hurdles".

The first "hurdle" is in the domestic Red Sea market, when the industry outbreak period comes, a large number of players pour in, and after entering the stock market in the future, players must tell more new possibilities.

The second "hurdle" is on the road to globalization, where Chinese companies may not only face more fierce competition, but also fight for the right to speak in the industrial chain and supply chain.

How to overcome these two hurdles?

Following the growth logic of technology giants, there are no more than two points: one is to think about the diversified development of business and open up a new growth curve. The second is to pursue innovation-driven and actively follow the new development direction of the industry.

Among Chinese companies that follow a similar line of thinking, Shanghai Zhida Technology Development Co., Ltd. (hereinafter referred to as "Zhida Technology"), a provider of home charging solutions, is a typical case. As a pioneer in the electric vehicle charging industry, it has gradually grown into a leader in the global home charging pile market.

From the latest market developments, it can be seen that Zhida Technology recently submitted a prospectus to the Hong Kong Stock Exchange to be listed on the main board IPO. From the perspective of investment, what kind of market positioning and competitiveness will Zhida Technology sprint to the capital market, and where is the development potential of the track?

Home charging pile market occupies the first place, the "invisible champion" behind the new energy vehicle market

The "decarbonization" process of the global automotive industry is accelerating, and the main green and low-carbon new energy vehicles have become the direction of industrial development.

In terms of sales volume, the prospectus shows that from January 2021 to the end of September 2023, Zhida Technology has shipped a total of 900,000 home charging piles worldwide, of which 800,000 are sold in the domestic market. According to the sales volume of home charging piles, the corresponding domestic and global market shares are about 20.5% and 12.2% respectively, ranking first in the industry.

In terms of revenue, from January to September 2021, 2022 and 2023, Zhida Technology achieved revenue of 358 million yuan, 697 million yuan and 486 million yuan respectively, and its scale continued to expand.

How to achieve the above results? The answer given by Zhida Technology is to deepen and broaden the revenue base through business diversification and globalization.

At present, the penetration rate of new energy vehicles is about to exceed 50%, and global sales are expected to exceed 20 million units in 2025.

In this regard, on the one hand, Zhida Technology has deepened cooperation with downstream car companies to form a strong "circle of friends". As of the end of September 2023, the cooperation includes eight of the top 10 domestic mainstream car companies, and the scope of cooperation has also expanded from domestic to global markets.

On the other hand, Zhida Technology has expanded its retail scale with relatively higher gross profit margins, and directly sells products to consumers through domestic mainstream e-commerce channels, as well as after-sales services such as installation. According to the retail sales of e-commerce platforms from January 2022 to the end of September 2023, the self-owned brand "Zhida" has become one of the top three brands in China.

At the same time, based on the proven business model in China, Zhida Technology has taken advantage of the east wind of Chinese new energy vehicle brands going overseas to explore overseas markets and expand the influence of Chinese brands. Overseas new energy vehicle related supporting is not as mature as the domestic market, and the problem of unbalanced vehicle pile ratio is more prominent, and it has a broader imagination space.

(Source: Zhida Technology Prospectus)

From January to September 2021, 2022 and 2023, Zhida Technology's overseas revenue will be 8.146 million yuan, 12.910 million yuan, and 47.699 million yuan, achieving explosive growth. The company's products currently cover eight countries, including Thailand and Brazil, where new energy vehicles are growing rapidly.

It can be seen that the high-quality products and services of Zhida Technology have been recognized by customers and consumers around the world, thus opening up new growth space for performance. At the same time, it has built a strong brand barrier and established a leading position in the global market. In addition, Zhida Technology has also cooperated with 104 distributors in 360 cities in China to further expand its brand influence.

As a result, through business diversification and globalization, Zhida Technology's revenue structure has become more solid.

From the trend point of view, based on the gradually built brand mentality, the trend of car companies not sending piles is becoming more and more obvious, and consumers and agent customers are expected to continue to increase, thereby driving domestic retail revenue out of the trend of accelerated growth. In addition, the overseas market is in an explosive period, which will jointly promote the overall revenue and gross profit margin of Zhida Technology, and the profitability will be further improved.

With home energy management as the fulcrum, we will start a new journey of globalization

For Chinese technology companies, after experiencing rapid growth, another action is to find the fulcrum of innovation and jump to a new direction of industrial development, as said at the beginning.

Previously, Zhida Technology connected products and services by building a digital platform to form a "three-in-one" innovative solution for home charging. This may be expected to support the growing number of home energy management services in the future.

Specifically, on top of the digital platform, hardware such as charging piles and automatic charging robots can become "entrances" to link new energy vehicles with photovoltaic and energy storage. In addition, it can provide global household users with services such as electric vehicle charging and discharging, battery cascade utilization, and battery life cycle management.

There are two keys to judging the success of innovation: first, what is the potential of the chosen development direction, and second, the basic conditions of the enterprise itself.

At present, home energy management services are connected to a long-term good track.

It is a definite trend for the world to accelerate the transition to low-carbon green energy, and the photovoltaic and energy storage industries are maintaining rapid growth. Global PV capacity is expected to increase from 1,055GW in 2022 to 5,457GW in 2030. According to the International Energy Agency, by 2030, the global installed capacity of energy storage will increase nearly tenfold compared to 2020.

With the increase in the penetration rate of new energy vehicles and the rise of household demand for "storage and charging" and "optical storage and charging" in various countries around the world, the large-scale application of home energy management services will be accelerated. Based on this, Zhida Technology will undoubtedly have more possibilities to open up new commercialization paths and performance increments.

In terms of the basic conditions of Zhida Technology, it has the advantages of technology, channels and upstream supply chain, which can support the landing of the above-mentioned innovative business in the global market.

First of all, in terms of technology, Zhida Technology has passed the two major safety certifications of European standard and American standard, and outputs high-value products for global customers. According to Frost & Sullivan, Zhida Technology is one of the first electric vehicle charging pile companies in the world to obtain automotive standard IATF16949 certification.

As of September 30, 2023, the company has 124 patents, including 33 invention patents, 111 software copyrights, and 121 registered trademarks, covering the field of electric vehicle charging.

Secondly, in terms of supply chain, Zhida Technology has gradually established a supply chain system of production, supply, service and promotion around the world.

For example, in terms of overseas capacity deployment, the company's Thailand factory is expected to start operation in the second quarter of this year, with a designed capacity of 216,000 charging piles per year. For example, in terms of service, Zhida Technology is establishing an installation and after-sales system for overseas charging piles, exporting mature domestic solutions and experience to overseas markets for localized landing, and the network layout and efficiency of its overseas services will gradually form differentiated competitiveness in the future.

Therefore, in general, under the development of the automobile industry towards low-carbon, globalization, and energy transition, Zhida Technology is expected to seize the dividends in two aspects.

On the one hand, the company exports leading charging pile products and services to the global market, which can better enjoy the rapid development of the global new energy vehicle industry and seize more market share through the basic disk business. On the other hand, by innovating higher-dimensional home energy management services, Zhida Technology will open up a broader imagination space in the field of digital energy in the future.

Through the above-mentioned strategic layout, it has provided strong support for the performance growth of Zhida Technology, has stronger growth potential and sustainable development ability, and has also allowed it to stand on the table in the market competition.

End:

From a higher perspective, Zhida Technology is no longer just about improving product and service solutions, but is gradually becoming a technology-based enterprise with an innovative service ecology. Photovoltaics, energy storage and new energy vehicles are linked to the platform, so that the company enters the global household users with an innovative service ecology, bringing them an upgrade of energy management experience.

It is foreseeable that Zhida Technology is expected to open a new era of home energy management services. In this process, it is not only the "single win" of the brand of Zhida Technology, but also the family users and energy companies in the ecosystem, so to a certain extent, it is a "win-win", which is to empower multiple industries and achieve common prosperity.

Within the service ecosystem, Zhida Technology can continue to export products, services, and digital value, and the market will continue to witness the value potential released by the landing of an ecological service brand in the future. At that time, Zhida Technology will be like a bamboo, telling its own story in the capital market.