China Luoyang Xinqianglian adds 1.5 billion yuan to boost large-scale wind turbine bearings

In response to the wind power industry's accelerating transition toward larger-capacity turbine models, LYXQL (300850) is vigorously advancing a new round of capacity expansion. The company recently responded to an inquiry letter from the Shenzhen Stock Exchange, disclosing plans to raise RMB 1.5 billion in capital. Of this amount, RMB 1.1 billion will be allocated to the "Construction Project for 6MW and Above High-Power Wind Turbine Main Bearings, Yaw and Pitch Bearings, and Components," while the remaining RMB 400 million will be used to supplement working capital. Once the project reaches full production capacity, it is expected to generate an additional RMB 1.184 billion in annual revenue and RMB 202 million in net profit.

Historical Fundraising Projects Show Robust Overall Performance; Short-Term Pressure on Individual Projects Does Not Affect the Big Picture

Since its listing in 2020, LYXQL has conducted multiple rounds of financing. Its first two fundraising projects—focused on wind turbine bearings of 2.0MW and above, and 3.0MW and above, respectively—both exceeded their projected performance targets. By 2025, their capacity utilization rates reached 101.08% and 106.09%, respectively, thereby validating the company's market competitiveness in the field of wind turbine main bearings.

The only project that fell short of expectations was the "Gearbox Bearings and Precision Components Project," funded via convertible bonds issued in 2022. As of the end of 2025, its cumulative capacity utilization rate stood at a mere 9.91%, resulting in a slight loss. The company explained that this project did not officially commence production until mid-2025, and noted that the localization rate for gearbox bearings remains low, while the customer adoption cycle is relatively long. Intermediary institutions have pointed out that this product line—gearbox bearings—falls under a different technical route and application scenario than the main bearings and yaw/pitch bearings targeted in the current fundraising initiative; therefore, its short-term performance will not impact the feasibility of the current project.

Capacity Expansion Aligns with Industry Trend Toward Larger Turbines; Order Backlog Supports Capacity Absorption

Currently, the trend toward larger-scale wind turbine units has become the industry mainstream. In 2025, my country's newly installed wind power capacity reached 130.82 GW, with turbine models of 6MW and above accounting for a substantial 83.7% of the total. LYXQL has achieved a market share ranging from 25.95% to 31.14% within this specific market segment. As of the end of February 2026, the company’s total backlog of orders amounted to RMB 2.262 billion; notably, orders for wind power bearings rated at 6MW and above exceeded RMB 1.6 billion, providing a solid foundation and assurance for the utilization of the newly added production capacity.

The project is being implemented in Zhangjiagang by LYXQL Jiangsu—a majority-owned subsidiary—and boasts significant geographical advantages. Its proximity to the wind power clusters along the eastern coast facilitates efficient service delivery to domestic clients while simultaneously enabling the expansion of export markets. To date, the project has received RMB 302 million in self-funded investment, with completion and commencement of operations scheduled for December 2026. The company emphasized that the utilization rate of its existing production lines has already exceeded 100%, rendering capacity expansion an urgent imperative. Furthermore, the current fundraising initiative explicitly excludes funds that had already been invested prior to the Board of Directors' approval, thereby ensuring clear regulatory compliance.

Simultaneous Disclosure of Risk Warnings

The company also candidly acknowledged several potential risks, including the possibility that the returns on the capital-raising investment may fall short of expectations, pressure regarding the absorption of the expanded production capacity, and the short-term impact on profits resulting from an anticipated annual increase of RMB 115 million in depreciation and amortization expenses. Additionally, the land designated for the project is currently subject to a mortgage (securing a claim not exceeding RMB 30.95 million); however, the company has formulated a plan to utilize the raised capital to redeem the mortgage and secure its release, establishing a clear and transparent financial pathway.

In summary, this capacity expansion initiative aligns closely with the prevailing trends in technological upgrading within the industry. Supported by a robust order backlog and a well-established market position, the project is poised to further solidify LYXQL’s pivotal role within the global supply chain for high-power wind turbine bearings.