Yongda Co., Ltd.: Wind Power Industry Prosperity Rises, Expands Forging Business Through Outbound M&A

"The company has focused on its core business and optimized its industrial structure. Last year, through mergers and acquisitions of high-quality assets in the industry, it achieved horizontal industrial integration and a dual-region market layout in central and east China, driving the company's long-term development," Shen Peiliang, Chairman of Yongda Co., Ltd. (001239.SZ), stated at the 2024 Annual General Meeting on the afternoon of May 12.

Yongda Co., Ltd.'s products are mainly applied in fields such as tunnel boring, construction machinery, and wind power generation. Financial reports show that in 2024, Yongda Co., Ltd. achieved operating revenue of 849 million yuan, up 3.48% YoY, and net profit attributable to shareholders of 79.0801 million yuan, down 13.31% YoY. In the first quarter of this year, the company achieved operating revenue of 471 million yuan, up 170.42% YoY, and net profit attributable to shareholders of 18.2532 million yuan, up 14.94% YoY.

"Since the beginning of this year, the wind power industry has seen a significant improvement in market sentiment, with wind turbine prices stabilizing and rebounding. The industry is entering a period of intensive deliveries, and installations are expected to experience rapid growth." Regarding the company's rebound in performance in the first quarter of this year, a company official told a reporter from Cailian Press that the company's structural components for wind power equipment cover a variety of models and specifications ranging from 1.5MW to 18MW, encompassing multiple technical routes. The company possesses customized production capabilities, enabling it to meet various application needs for both offshore and onshore wind power. It has also established long-term cooperation with enterprises such as Mingyang Smart Energy and XEMC Wind Power Co., Ltd.

Against the backdrop of a favorable outlook for the wind power business, Yongda Co., Ltd. previously extended its industry chain through external mergers and acquisitions. In 2024, the company acquired a 51% stake in Jiangsu Jinyuan High-end Equipment (hereinafter referred to as "Jinyuan Equipment"), which is primarily engaged in the research, production, and sales of high-speed heavy-duty gear forgings. Its products, as core components of gearboxes, are applied in multiple industries including wind power and construction machinery, with some products also applied in the robotics sector, though the business scale in this area remains small.

After Jinyuan Equipment became a controlled subsidiary of the company, it was consolidated into the financial statements of the publicly listed firm starting from November 2024. "Jinyuan Equipment is located on Zhongguancun Avenue in Liyang City, Jiangsu Province, within the Yangtze River Delta region and close to core suppliers and customers," the aforementioned official said. Through this merger and acquisition, the company has horizontally extended its product lineup from metal structural components to metal forgings and entered the wind power gear sector. By integrating resources in their respective key industries, both parties have achieved bidirectional penetration in sales regions and customer bases.

Before the acquisition, Yongda Co., Ltd. had four production sites, all located in the Jiuhua District of Xiangtan City, Hunan Province. The factory areas were adjacent to each other, with a total area of approximately 130,000 m². The company's core customers, including China Railway Construction Heavy Industry Co., Ltd., Zoomlion Heavy Industry Science & Technology Co., Ltd., SANY Group, and CRRC Corporation Limited, all have factories located near the company.

According to the company's previous announcement, the performance commitment party of Jinyuan Equipment, the acquired company mentioned above, has committed to achieving a cumulative net profit of no less than 250 million yuan from 2025 to 2027. Shen Peiliang stated that this year, the company will continue to focus on its core business market, promote external mergers and acquisitions and integration, and build a leading enterprise in the integrated field of large, irregular, and high-end special equipment metal "structural parts and forgings."