HuiKang Technology passes review, with both revenue and net profit declining last year, and operating cash flow halved

On March 5th, Ningbo Huikang Industrial Technology Co., Ltd. (Huikang Technology) successfully passed the review for listing on the Main Board of the Shenzhen Stock Exchange. The sponsor is Caitong Securities. Previously, on January 22nd, the company also submitted for review, but the review result was a temporary suspension.

The listing committee’s meeting mainly focused on inquiries about whether the company’s performance is sustainable, whether there are related-party relationships between major suppliers and the company or its affiliates, and required the company to explain, based on the history of major suppliers’ equity, cooperation history, and transaction prices, whether such related-party relationships exist and whether the related disclosures are true, accurate, and complete.

According to a quick summary, Huikang Technology mainly engages in the R&D, production, and sales of refrigeration equipment. Its main products include ice makers, refrigerators, freezers, and wine cabinets, primarily used in residential and commercial fields. Its self-owned brands include “HICON Huikang” and “WATOOR Wotolai.”

Last year, both revenue and net profit saw significant declines, with operating cash flow halved. From 2022 to 2024, Huikang Technology achieved operating revenues of 1.93 billion yuan, 2.493 billion yuan, and 3.204 billion yuan, respectively, with net profits of 197 million yuan, 338 million yuan, and 451 million yuan.

In 2025, the company’s performance sharply declined, with operating revenue and net profit dropping to 2.872 billion yuan and 391 million yuan, respectively, representing year-on-year decreases of 10.35% and 13.33%. Meanwhile, operating cash flow was 307 million yuan, a significant decrease of 49.65% year-on-year.

Huikang Technology stated that in 2025, due to increased US tariffs, performance declined year-on-year. Since early May 2025, as the tariff policy stabilized temporarily, sales to the US market gradually recovered. In November 2025, US import tariffs were further reduced from 55% to 45%, leading to a further recovery in sales, stabilization of revenue, and a narrowing of net profit decline.

From July to December 2025, the company achieved revenue of 1.483 billion yuan, a slight increase of 2.57% year-on-year, with net profit of 186 million yuan, down 6.44% year-on-year, and operating cash flow of 296 million yuan, a sharp decrease of 40%. The company explained that, on one hand, this was affected by the decline in operating revenue; on the other hand, although revenue increased in Q4, the revenue growth was within the credit period and had not yet formed operational cash flow.

Ice makers account for over 80% of revenue, with average selling prices continuously declining. Huikang Technology’s main revenue source is ice makers, making it a leading industry player. According to the China Light Industry Machinery Association, from 2022 to 2024, the company’s global market share in the civilian ice maker market ranked first, with approximately 31% in 2024.

From 2022 to June 2025 (reporting period), ice maker revenue was 1.362 billion yuan, 1.948 billion yuan, 2.578 billion yuan, and 1.117 billion yuan, respectively. The revenue proportion increased from 70.83% to 80.76%. However, the product faces challenges with declining average selling prices, which were 435.22 yuan/unit, 403.97 yuan/unit, 385.90 yuan/unit, and 365.76 yuan/unit, showing a downward trend.

Meanwhile, gross profit margins for ice makers fluctuated, at 24.52%, 26.48%, 24.45%, and 25.06%, leading to a volatile gross margin for the main business, at 21.15%, 24.55%, 22.54%, and 23.55%.

Export revenue share decreased from 79.46% to 45.46%. Regionally, Huikang’s main revenue sources are exports and domestic sales. Export revenue during the period was 1.528 billion yuan, 1.871 billion yuan, 2.225 billion yuan, and 629 million yuan, accounting for 79.46%, 75.37%, 69.9%, and 45.46%, respectively. Domestic sales were 395 million yuan, 611 million yuan, 958 million yuan, and 754 million yuan, accounting for 20.54%, 24.63%, 30.1%, and 54.54%.

Further analysis shows that export revenue mainly comes from North America, with revenues of 1.367 billion yuan, 1.684 billion yuan, 1.939 billion yuan, and 449 million yuan, representing 71.09%, 67.84%, 60.91%, and 32.48% of total revenue. The company stated that at the end of the period, the proportion of revenue from North America significantly declined, partly due to the US tariff policies in the first half of 2025 affecting sales to North America. Additionally, domestic cross-border e-commerce clients like ROWAN and Ningbo Haomi shifted to transactions with domestic entities under their control for strategic reasons, with products delivered to these domestic entities that handle customs clearance and export, thus recognized as domestic sales.

The company plans to raise nearly 1.8 billion yuan. For this IPO, Huikang Technology intends to issue no more than 37.087858 million new shares, aiming to raise 1.797 billion yuan. The funds will be used for the construction of the Second Weian Refrigeration Equipment Intelligent Manufacturing Base, the intelligent upgrade of refrigeration equipment manufacturing, the Thailand refrigeration equipment intelligent manufacturing base, and R&D center construction. The planned investments are 758 million yuan, 461 million yuan, 190 million yuan, and 388 million yuan, respectively.

During the reporting period, the capacity utilization rates for ice makers were 70.59%, 97.36%, 103.8%, and 98.06%, with a 2024 capacity of 6.462 million units. Freezer capacity utilization was 97.69%, 71.5%, 105.89%, and 89.85%, with a 2024 capacity of 432,000 units. Refrigerators and wine cabinets had utilization rates of 85.7%, 103.34%, 93.46%, and 98.5%, with a 2024 capacity of 795,000 units. The total capacity was 7.689 million units, while the planned expansion and technological upgrades will increase capacity to 8.16 million units, exceeding the 2024 total capacity, indicating a significant expansion pace.

The company’s export revenue mainly comes from North America. Last year’s performance decline was related to US tariffs, which have been frequently changed in recent years. Given this context, aggressive capacity expansion may be questionable, and subsequent absorption of the new capacity should be closely monitored.