Transforming into a Smart Power System Supplier
Hongyu Electric (7869) will hold a pre-OTC listing performance briefing on November 4, with a tentative underwriting price of 280 per share. The company has been deeply engaged in the heavy electrical equipment field for nearly 40 years, and in recent years has transformed from a traditional switchboard manufacturer into a smart power system supplier with hardware-software integration capabilities, tapping into AI data centers, high-tech fabs and grid upgrade markets. In the first half of 2026, gross margin reached 23.22%, a record high, with earnings per share of 7.86, up 15% year-on-year. The company expects revenue to maintain double-digit growth in 2027.
Prefabricated Container Substation Targets AIDC
As AI computing demand grows, data centers and high-tech fabs have simultaneously raised demand for highly efficient, stable power supply and rapid deployment. Hongyu is deploying power infrastructure for AI data centers, launching a prefabricated container substation integrating medium-voltage substations, automatic transfer switches, uninterruptible power systems and its self-developed iPanel cloud energy management system. Through factory-based modular production and testing in advance, it is expected to shorten customer deployment time by more than 6 months, with trial production and shipments planned for 2027.
International Partnerships and Certifications Build Entry Barriers
In high-end power distribution equipment, Hongyu has partnered with France-based Schneider Electric, obtaining exclusive authorization to manufacture OKKEN low-voltage switchboards in Taiwan, targeting international cloud service providers, semiconductor advanced processes and large public infrastructure markets. Benefiting from Taipower's Resilient Grid Project and the upgrade of domestic power distribution equipment standards toward international IEC standards, the company is the first major domestic switchboard maker to comply with the CNS 15156 standard, and the first to pass a seismic intensity 7 test by the National Center for Research on Earthquake Engineering. A single new type certification can cost up to the tens of millions level, combined with its self-developed iPanelCAD 3D design system, forming technological, certification and capital barriers.
Vietnam Plant Begins Production, Expanding Global Footprint
In the power conductor business, Hongyu is a major domestic copper busbar importer and ODM processor, with a Taiwan market share of over 50% and annual capacity of 1,700 tons, more than 3 times the size of the second-largest player. Using patented copper busbar twisting equipment and flat-bias processing, it can reduce product cost and weight by more than 20% and volume by over 50%. Its global strategy advances Taiwan R&D, Vietnam manufacturing and North America deployment. The new Hung Yen plant in Vietnam began production in the third quarter of 2026, with an area 3 times that of the Taiwan plant, expected to add 4 billion to 6 billion in capacity at full utilization. Its U.S. subsidiary plans to pursue UL certification for low-voltage switchboards in 2027. Institutional investors said the company's backlog exceeds 2 billion, with visibility extending to early 2028, expected to drive revenue to new highs from 2026 to 2027.