Kesheng Technology submits to HKEX; major clients' dependency issue remains unresolved

Source: Beijing Business Daily

On March 24, Zhejiang Kesheng Technology Co., Ltd. (hereinafter referred to as “Kesheng Technology”), a giant in solar thermal power generation, submitted its listing application materials to the Hong Kong Stock Exchange again, aiming for a listing on the Hong Kong stock market. Prior to this, the company had submitted a listing application to the Hong Kong Stock Exchange on September 24, 2025. From a fundamental perspective, Kesheng Technology is expected to achieve steady growth in revenue and net profit in 2024 and 2025. However, along with the resubmission of the application, the company’s high customer concentration has also been brought back into focus.

2025 revenue: 2.193 billion yuan

According to the Hong Kong Stock Exchange’s official website, Kesheng Technology, a supplier of concentrated solar power systems, submitted its application again on March 24.

It is understood that Kesheng Technology is one of the providers of tower solar thermal power and molten salt storage solutions. From 2021 to 2024, a total of 20 tower solar thermal projects in China have been substantively started and have confirmed their suppliers for concentrated solar power systems, with a total designed capacity of 2160MW. The company has provided concentrated solar power systems for 11 of these 20 power stations in China—this system is the most critical subsystem in such power stations, with a total designed capacity of 1250MW.

Therefore, according to a Frost & Sullivan report, Kesheng Technology became a leading supplier of concentrated solar power systems in China from 2021 to 2024, occupying 57.9% and 55% of the market shares in terms of total project design capacity and the number of projects, respectively. Moreover, according to the Frost & Sullivan report, as of the last feasible date, Kesheng Technology is also the only supplier of concentrated solar power systems for molten salt tower solar thermal power stations worldwide that has accumulated service performance exceeding 1GW.

Behind this push for a listing on the Hong Kong Stock Exchange, Kesheng Technology has achieved continuous growth in performance during the reporting period. Financial data shows that from 2023 to 2025, the company achieved revenues of approximately 858 million yuan, 2.189 billion yuan, and 2.193 billion yuan, respectively; corresponding annual profits were approximately 248 million yuan, 540 million yuan, and 568 million yuan.

However, it is worth noting that in 2025, the company’s net cash used in operating activities was 252 million yuan; while in 2023 and 2024, the net cash generated from operating activities was approximately 931 million yuan and 329 million yuan, respectively. In the prospectus, Kesheng Technology also stated that if the company continues to record a net outflow of cash from operating activities in the future, its working capital may be constrained, which could adversely affect financial performance. If the company encounters long-term and continuous net outflows of cash from operating activities, it may not have sufficient working capital to cover operating costs, which could have a significant adverse impact on the company’s business, financial condition, operational performance, and outlook.

While the performance is impressive, Kesheng Technology’s revenue coming from a single product (service) is also quite noticeable. The prospectus shows that during the reporting periods, the income from the company’s molten salt tower solar thermal power station solutions accounted for 99.6%, 95%, and 98.4% of total revenue, respectively. Among them, sales of the solar collection system and other core subsystems accounted for approximately 98.5%, 94.7%, and 97% of total revenue; while income from construction consulting, operational technical guidance, and other technical services accounted for approximately 1.1%, 0.3%, and 1.4%, respectively.

Revenue concentration from the top five customers is 98.5%

In submitting its application to the Hong Kong Stock Exchange, the high customer concentration of Kesheng Technology has also become a focal point of market attention.

The prospectus shows that from 2023 to 2025, the revenue from the company’s top five customers was 858 million yuan, 1.937 billion yuan, and 2.159 billion yuan, accounting for 99.9%, 88.5%, and 98.5% of total revenue, respectively; during the same period, the income from the largest customer was approximately 727 million yuan, 488 million yuan, and 675 million yuan, accounting for approximately 84.8%, 22.3%, and 30.8% of the company’s total revenue.

It is also worth mentioning that during the reporting period, Kesheng Technology made substantial dividend distributions. Specifically, at the special shareholders’ meeting held in December 2024, shareholders approved a dividend of 0.43 yuan per share, totaling 155 million yuan, which has subsequently been distributed to shareholders; at the special shareholders’ meeting held in September 2025, shareholders approved a dividend of 0.4 yuan per share, totaling 144 million yuan, which has subsequently been distributed to shareholders using internal resources.

In terms of equity relations, as of the last feasible date, Jin Jianxiang directly held approximately 3.33% of the total issued shares of the company; at the same time, because Jin Jianxiang holds 99% of the equity in Hangzhou Jingjiu (Huzhou Yuri’s general partner) and as a limited partner holds approximately 93.34% of the equity in Huzhou Yuri, he is regarded as holding approximately 21.77% of the total issued shares of the company through Huzhou Yuri. As of the last feasible date, Jin Jianxiang, Huzhou Yuri, and Hangzhou Jingjiu collectively have the right to exercise 25.1% of the company’s voting rights.

“If the company has sufficient cash flow and the major shareholders have a need to cash out or optimize their tax structure, dividends are a legal exercise of shareholder rights,” said Yuan Shuai, Deputy Director of the Investment Department of the China Urban Development Research Institute. “However, in a technology-intensive sector that is in an expansion phase, funds should often be prioritized for research and development and capacity building; excessive cash outflows may weaken its risk resistance ability.”

Beijing Business Daily reporter Wang Manlei