Jinlang Technology Launches Fourth Round of Fundraising with Plans for 780 Million Yuan in Dividends

Jinlang Technology, a leader in photovoltaic inverters, has initiated another round of refinancing, marking the fourth such instance in five years. Recently, the Shenzhen Stock Exchange accepted its application to issue convertible bonds to unspecified investors. The fundraising plan aims to raise up to 1.694 billion yuan (approximately $240 million), with the funds primarily allocated for capacity expansion, the establishment of a research and development center, digital upgrades, and to supplement working capital.

In its fundraising prospectus, Jinlang Technology has projected the future returns of its investment projects. These include the "New High Voltage High Power Grid-Connected Inverter Project" and the "New Medium and High Power Hybrid Energy Storage Inverter Project." Once fully operational, these projects are expected to add production capacity for over <b>25,000 units</b> of high voltage grid-connected inverters (above 250kW) and medium to high power hybrid energy storage inverters (above 20kW), with average net profits projected to be approximately <b>77.28 million yuan</b> and <b>124 million yuan</b>, respectively. Additionally, the "Distributed Photovoltaic Power Plant Project" is expected to generate an average annual power output of <b>111 million kWh</b>, increasing revenue by about <b>40.65 million yuan</b> and net profit by roughly <b>15.39 million yuan</b>, with a post-tax internal rate of return of approximately <b>7.45%</b>.

Jinlang Technology's distributed photovoltaic generation business is progressively expanding. The prospectus notes that by executing the distributed photovoltaic power plant project, the company can accelerate the deployment of such plants on high-quality rooftops, converting resource advantages into performance returns.

Since its IPO in 2019, Jinlang Technology has launched refinancing initiatives four times. Previously, it issued stocks to specific investors in 2020, issued convertible bonds to unspecified investors in 2022, and conducted another stock issuance to specific investors in the same year. The 2022 stock offering raised a total of <b>2.925 billion yuan</b>, the largest amount raised in these rounds. Each fundraising effort has primarily focused on expanding the company’s photovoltaic inverter production, building distributed photovoltaic power plants, and enhancing experimental testing capabilities. Every refinancing round has significantly improved the company's liquidity.

At the end of each year from 2021 to 2023, the company reported cash balances of <b>747 million yuan</b>, <b>1.577 billion yuan</b>, and <b>1.078 billion yuan</b>, representing <b>27.45%</b>, <b>30.04%</b>, and <b>23.54%</b> of total current assets, respectively. Notably, at the end of 2022, Jinlang Technology's cash total increased by <b>830 million yuan</b> compared to the end of 2021, primarily due to the receipt of funds from its convertible bond issuance, which had not yet been fully utilized by year-end. In the subsequent year, refinanced funds supported the company in purchasing equipment, building facilities, and continuing the construction of distributed photovoltaic power plants.

Jinlang Technology has a clear positioning strategy, focusing on the new energy sector and specializing in distributed photovoltaic power generation. It has developed two core business areas: photovoltaic inverters and distributed photovoltaic power generation, committed to "driving clean energy to become a global mainstream energy source through technological strength."

As the scale of operations expands and investment projects progress, the company's total assets have rapidly grown. By the end of each year from 2021 to 2023, and by the end of September last year, the total asset values were <b>6.311 billion yuan</b>, <b>14.925 billion yuan</b>, <b>21.592 billion yuan</b>, and <b>21.894 billion yuan</b>, respectively. During the fiscal years from 2021 to 2023, Jinlang Technology reported revenues of <b>3.312 billion yuan</b>, <b>5.89 billion yuan</b>, and <b>6.101 billion yuan</b>, achieving a compound annual growth rate of <b>35.71%</b>. In the first nine months of 2024, the company recorded revenues of <b>5.071 billion yuan</b>, reflecting an <b>11.21%</b> year-on-year increase.

During the same period, Jinlang Technology's net profit attributable to shareholders was <b>474 million yuan</b>, <b>1.06 billion yuan</b>, <b>779 million yuan</b>, and <b>669 million yuan</b>. After deducting non-recurring gains and losses, the adjusted net profits were <b>392 million yuan</b>, <b>1.043 billion yuan</b>, <b>786 million yuan</b>, and <b>630 million yuan</b>. This data indicates that while Jinlang Technology’s business scale is continually expanding, factors such as industrial policy changes, fluctuations in supply and demand, and raw material price volatility could impact its operational scale and profitability.

Jinlang Technology also faces risks related to declining gross profit margins. From 2021 to 2023, its overall gross profit margins were <b>28.71%</b>, <b>33.52%</b>, <b>32.38%</b>, and <b>33.67%</b>. The gross profit margins for its photovoltaic inverter business were <b>26.13%</b>, <b>28.88%</b>, <b>23.14%</b>, and <b>21.12%</b>; while for the distributed photovoltaic generation business, the margins were <b>68.69%</b>, <b>65.46%</b>, <b>59.93%</b>, and <b>60.11%</b>. In 2023 and the first nine months of 2024, the gross profit margins for both business lines have generally seen a decline compared to the beginning of the reporting period.

With the ongoing expansion of its photovoltaic inverter and distributed photovoltaic power generation businesses, the company has raised funds through a combination of operational earnings, capital market financing, and bank loans to support its projects. However, a funding gap remains. As of the end of September 2024, Jinlang Technology reported a balance of <b>696 million yuan</b> in short-term loans and <b>1.207 billion yuan</b> in current liabilities due within one year, totaling <b>1.903 billion yuan</b>. In contrast, its cash balance at that time was only <b>1.112 billion yuan</b>. After excluding restricted cash of <b>1.578 million yuan</b> and unutilized raised funds of <b>151 million yuan</b>, the remaining disposable funds were <b>959 million yuan</b>. According to estimates in the current fundraising prospectus, the liquidity gap for Jinlang Technology from 2025 to 2027 is expected to reach <b>471 million yuan</b>.

Examining Jinlang Technology's shareholding structure, it can be found that its controlling shareholder is <b>Wang Yiming</b>, with actual control held by Wang Yiming, Wang Junshi, and Lin Yibei, who are Wang Yiming's parents. As of September 30, 2024, Wang Yiming, Lin Yibei, and Wang Junshi held <b>25.02%</b>, <b>7.61%</b>, and <b>5.33%</b> of the company's shares, respectively. Wang Yiming and Wang Junshi own <b>60%</b> and <b>40%</b> of Jinlang Holdings, which in turn holds <b>7.84%</b> of Jinlang Technology’s shares. This results in Wang Yiming, Wang Junshi, and Lin Yibei holding a combined <b>45.80%</b> of voting rights in the company.

From 2021 to 2023, Jinlang Technology's cash dividends amounted to <b>124 million yuan</b>, <b>159 million yuan</b>, and <b>79.999 million yuan</b>, respectively. The cash dividends represented <b>26.13%</b>, <b>14.97%</b>, and <b>10.26%</b> of the corresponding year's net profit attributable to shareholders, showing a decrease each year. Over these three years, the total cash dividends amounted to <b>362 million yuan</b>, accounting for <b>15.67%</b> of the total net profit attributable to shareholders. However, Jinlang Technology has plans to increase the dividend payout ratio while estimating future funding needs. In its prospectus, it mentions a commitment to maintain a cash dividend ratio of <b>20%</b> of annual net profit attributable to shareholders over the next three years, estimating future cash dividends will require approximately <b>779 million yuan</b>.