HeMai Co. Plans to Invest 1 Billion in New Headquarters: Exploring the Strategic Move Behind the Major Construction Project

HeMai Co., Ltd.: Why Invest 1 Billion in a New Building?
On April 30, 2025, HeMai Co., Ltd. announced plans to invest up to 10.7 billion RMB in constructing a new headquarters building. The company stated that this investment is essential to meet its future operational needs and will help optimize resource allocation, ensuring sustainable growth beneficial to the company and its shareholders. Upon completion, the new headquarters will serve as a strategic hub, enhancing operational environments and modernizing management processes to attract high-end talent and bolster market competitiveness.
The announcement regarding the construction project was made following a meeting of the company’s board on April 29, 2025, where the investment proposal was approved. Interestingly, the construction project was already listed in the company’s 2024 annual report with 6.54 billion RMB allocated to ongoing engineering work, indicating that the decision to build had been made prior to formal approval.
HeMai’s Financial Position
As of the end of the first quarter of 2025, HeMai Co., Ltd. boasted total current assets of 5.967 billion RMB, including 3.772 billion RMB in cash and 129 million RMB in trading financial assets. Investing 1 billion RMB in a new building poses no financial strain. Although the company experienced its first quarterly loss since 2018, it still has considerable cash reserves, mostly raised through its IPO. In December 2021, HeMai went public at a stunning price of 557.80 RMB per share, achieving a record-breaking market capitalization and raising a staggering 5.4 billion RMB—almost 50 billion RMB more than originally intended.
The high issuance price and the amount raised have led to reflections on the A-share issuance system, which have not resulted in any penalties or corrective measures over the past three years. Of the 54 billion RMB raised, approximately 26 billion RMB has already been spent, predominantly on operational costs and debt repayment, while only 5.9 billion RMB was allocated to production and construction projects.
New Headquarters at Hangzhou’s Sina Smart Valley
The new headquarters will be located within the Hangzhou “Sina Smart Valley,” a project initiated in collaboration with Sina Group back in December 2017. The aim was to create a digital economy hub in Hangzhou, akin to Beijing’s Zhongguancun. The area has attracted major enterprises such as SF Express and Lenovo. HeMai’s counterpart in this acquisition, Sina Jifeng Technology Development (Hangzhou) Co., Ltd., originally held a 35% stake, which is now entirely controlled by local state-owned assets.
The total cost for the land and buildings is 548,014,183.71 RMB, with construction costs set not to exceed 10.7 billion RMB. The project will feature nine buildings, with a total construction area of 139,329 square meters, which raises questions about HeMai’s need for such a large space considering its employee count of 1,637.
Future Implications
As the leading player in the micro-inverter sector, HeMai’s investment in this headquarters could position the company as a “property landlord” in the future. Based on current rental rates in the area, the potential income from leasing out the property could yield an annual return exceeding 8.5%, significantly outperforming many commercial properties.
In summary, while the financial landscape for inverter manufacturers has become increasingly competitive, HeMai’s strategic investment in real estate could provide a buffer against market pressures, allowing the company to secure its financial footing and maintain growth amid challenges.