Megmeet Electrical plans share issue to boost growth and capacity

Shenzhen Megmeet Electrical Co., Ltd. plans a non-public share issuance in 2025, seeking to raise up to CNY 266,301.06 million. The proceeds will fund five key projects: the Megmeet Global R&D Center Expansion, the Changsha Smart Industrial Center Phase II, the Thailand Production Base Phase II, the Zhuzhou Base Expansion Phase III, and a working capital supplement. These investments are intended to expand production capacity, strengthen R&D, and optimize global market presence, addressing growing demand in power electronics and industrial automation.

The issuance aligns with national industrial policies and aims to enhance the company's core competitiveness. The offering targets up to 35 specific investors, including controlling shareholder Tong Yongsheng, who will subscribe for CNY 30 million to CNY 100 million. The company's total share capital is 55,007.2252 million shares as of September 30, 2025. This move follows previous convertible bond issuances in December 2019 and October 2022, and has received approval from the Shenzhen Stock Exchange, pending registration with the China Securities Regulatory Commission.

The company acknowledges risks including a projected decline in net profit for 2025 (CNY 11,662.71 million, a 67.85% decrease year-on-year for January-September) due to intensified market competition, increased raw material prices, and substantial R&D investments. Despite these challenges, the company’s strategic initiatives are expected to foster long-term growth and maintain its industry leadership.