TCL、 Supported by Sunshine, Huaneng, and others, this' 70s generation 'is about to ring the listing bell

There are obvious signs of a "rebound" in photovoltaic IPOs. After the successful listing of Shouhang New Energy in 2025, the bell for photovoltaic companies to go public will ring again. This time, it is Jiangsu Zerun New Energy Technology Co., Ltd. (hereinafter referred to as Zerun New Energy).

On April 28th, Zerun New Energy officially launched online subscription, marking that this enterprise is about to embark on a new journey in the capital market.

Essential auxiliary materials for photovoltaic modules

According to the prospectus, the predecessor of Zerun New Energy was Jiangsu Zerun New Materials Co., Ltd. (hereinafter referred to as Zerun Co., Ltd.), which was established solely by Jiangsu Zerun Industrial Investment Co., Ltd. (Zerun Industrial) in 2017. On November 25, 2022, Zerun Co., Ltd. officially completed the industrial and commercial procedures for the change of its joint-stock company.

Zerun Industrial was established in 2009. With the establishment of Zerun Limited, Zerun Industrial gradually shifted its main production and business activities to Zerun Limited. In 2021, due to Zerun Industrial no longer engaging in specific business operations, in order to improve management efficiency and reduce shareholding levels, Zerun Limited absorbed and merged Zerun Industrial.

The actual controller of Zerun New Energy is Chen Zepeng, who controls a total of 48.9269% of the voting rights of Zerun New Energy through direct shareholding and indirect control. At the same time, Chen Zepeng's legendary experience has also received great attention from the market. He was born in 1974. After he started work at the age of more than 20, he went from technician to engineer and engineering director, and then turned to sales for two years to start his own business, which can be described as another model from a migrant worker to a big boss. At present, Chen Zepeng is still a core technical personnel of Zerun New Energy.

Based on the production and operation experience of molds, cables, and connectors, Chen Zepeng positions Zerun New Energy's main business as photovoltaic module junction boxes, which are connection devices between module arrays and solar electrical control equipment. Each photovoltaic module needs to be equipped with a set of junction boxes and a pair of connectors, which play a key role in the connection and protection between modules and serve as the current "control center" of the photovoltaic module.

According to the disclosure, the sales volume of Zerun New Energy's junction boxes from 2022 to 2024 were 29.7717 million sets, 49.6121 million sets, and 60.7671 million sets, respectively, which still lags behind the top enterprises.

The difference in sales naturally determines the level of revenue, but in the "cold winter" of photovoltaic manufacturing in 2024, Zerun New Energy still achieved both revenue and net profit growth. Compared to that, Tongling Holdings expects a year-on-year decrease of 45.45% -59.99% in net profit for 2024.

Received capital injections from TCL, Sunshine, Huaneng, and other companies

Continuing to trace Zerun New Energy, it can be found that it has received support from many industry giants and bigwigs. It is reported that before this issuance, Zerun New Energy had a total of 15 individual shareholders and 12 institutional shareholders.

There are many giants among institutional shareholders, such as Runxia Zhaoying, which holds more than 5% of the shares, and Three Gorges New Energy, which accounts for 49.63% of the investment. Another major investor is Hubei Changjiang Zhaoyin Industrial Fund Partnership Enterprise (Limited Partnership), which includes Zhaoyin Financial Holdings and Changjiang Industrial Fund under the control of Hubei State owned Assets Supervision and Administration Commission.

Prior to the issuance, Xiamen TCL, the tenth largest shareholder, was actually controlled by TCL Group. TCL Group also held 0.9714% of the shares of Zerun New Energy through its subsidiary Tianjin Zhonghuan Haihe Intelligent Manufacturing Fund Partnership Enterprise (Limited Partnership) (hereinafter referred to as Tianjin Zhonghuan) and its co investment platform Tianjin Shenghua. Therefore, TCL Group held a total of 3.1886% of the shares of Zerun New Energy before the issuance. From 2022 to 2024, TCL Zhonghuan will be one of the top five customers of Zerun New Energy.

In addition, there is Hefei Sunshine Renfa Carbon Neutrality Investment Management Center (Limited Partnership) (hereinafter referred to as Hefei Sunshine), with the largest share proportion being inverter tycoon Cao Renxian and his leading company, Sunshine Power Supply; Haining Huaneng Rongke Huan Equity Investment Partnership Enterprise (Limited Partnership) (hereinafter referred to as Haining Huaneng), with Huaneng Investment having the highest share proportion.

Among the natural person shareholders, Chen Jinpeng is the brother of Chen Zepeng, holding 3.55% of the shares before the issuance; Shao Jianxiong is the Chairman of Hemai Group and held 0.83% of the shares of Zerun New Energy before its issuance.

From the perspective of changes in shareholders and share capital, in April 2022, Runxia Zhaoying and others increased their capital to Zerun Limited; In August 2022, Xiamen TCL and Tianjin Zhonghuan acquired equity in Zerun Co., Ltd; In December 2022, the second month of Zerun Co., Ltd.'s transformation into a joint-stock company, Zerun New Energy successively introduced capital increases from Hefei Sunshine, Haining Huaneng, Haining Huiren, Tianjin Zhonghuan, and Shao Jianxiong. Zerun New Energy emphasized that the investment of relevant shareholders is mainly due to the continuous improvement of the company's product layout, market development, and performance growth. The company's future development prospects have been recognized by investors in the industry.

Breaking the deadlock and questioning

In addition to customer investment, Zerun New Energy has also been questioned by the market for its single product structure and high risk of customer dependence.

According to the official website, Zerun New Energy's products cover intelligent junction boxes, traditional junction boxes, photovoltaic connectors, photovoltaic wires, etc. Among them, the main business junction box revenue accounts for more than 94%.

Enhancing risk resistance capabilities, Zerun New Energy has horizontally expanded its focus on the field of new energy vehicles. It is reported that in the past two years, Zerun New Energy has accelerated the research and development and production technology layout of functional embedded products for connecting and protecting new energy vehicles. Currently, it has signed a strategic cooperation agreement with Camel Group and become an important supplier of its new energy vehicle auxiliary power battery box; Cooperate with Wuhan Jiachen to become its BDU battery box supplier. Through the Camel Group, Zerun New Energy supplies new energy vehicle auxiliary power battery boxes to multiple vehicle manufacturers such as BMW, Mercedes Benz, Xiaopeng, and NIO. In addition, Zerun New Energy is committed to the development and layout of electrical connection and protection products in the core components of the three electric systems of new energy vehicles, actively creating new growth points.

In terms of customers, the prospectus shows that from 2022 to 2024, the sales revenue of Zerun New Energy's top five customers accounted for 73.54%, 73.23%, and 58.72% respectively, especially customer A, which has been the largest customer for the past three years, accounting for nearly 30% of sales.

Regarding this, Zerun New Energy explained that on the one hand, it is closely related to the continuous increase in concentration in the downstream photovoltaic module industry; On the other hand, in line with industry characteristics, the concentration of the top five customers of comparable companies in the same industry is all above 50%, and the proportion of the largest customer exceeds 20%.

For customer A, although quite mysterious, it is not difficult to guess from well-known thin-film module companies, domestic American companies, cadmium telluride and other keywords that it is First Solar. Due to the inherent characteristics of thin film components, the junction box does not require the use of diodes. Zerun New Energy has customized and developed a junction box for it, with a gross profit contribution of over 50%. Zerun New Energy firmly believes in the prospects of thin-film modules and, relying on its technological accumulation in thin-film battery module junction boxes, has established cooperative relationships with downstream customers in 2024, actively exploring and laying out the research and development of junction boxes suitable for the next generation of thin-film battery module technology - perovskite battery modules.

In the product sales of Zerun New Energy in the past three years, the proportion of exports accounted for about 40%. In order to keep up with the trend of global industrial layout of downstream photovoltaic module enterprises and enhance production capacity coverage in North America, Southeast Asia, Europe and other regions, Zerun New Energy also plans to actively layout production and manufacturing bases in relevant regions, in line with the production layout of downstream customers.

In this issuance, Zerun New Energy originally planned to raise 720 million yuan, but the actual issuance price corresponds to a total fundraising of 528 million yuan, a decrease of 200 million yuan from the original plan. The raised funds will mainly be used for the expansion project of junction boxes, the construction project of auxiliary power battery boxes for new energy vehicles, the construction project of research and development centers, and to supplement working capital.