In-Depth Analysis Report on Tianneng Co., Ltd.'s RMB 12 Billion Entrusted Wealth Management Plan

Based on the collected information, I now provide you with an in-depth analysis report on Tianneng Co., Ltd.'s RMB 12 billion entrusted wealth management plan.

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According to a report by Cailianshe on January 8, 2025, Tianneng Co., Ltd. (688819.SH) issued an announcement stating that the company and its subsidiaries plan to use temporarily idle self-owned funds with a maximum balance not exceeding RMB 12 billion (inclusive) for entrusted wealth management[1]. The investment scope of this wealth management plan includes medium- and low-risk wealth management products with high safety, good liquidity, and relatively good investment returns, covering bond investments, money market fund investments, entrusted wealth management (including wealth management products of financial institutions, trust products, asset management plans), etc.[1].

This proposal has been reviewed and approved by the board of directors and does not need to be submitted to the general meeting of shareholders for deliberation. The scale of this wealth management plan accounts for 57.4% of the company’s first-half 2025 operating revenue (RMB 20.917 billion), which has aroused market concern about the company’s capital allocation strategy and the development prospects of its main business.

Tianneng Co., Ltd. is a leading battery manufacturer in China, whose main business covers multiple fields such as lead-acid batteries, lithium batteries, and hydrogen fuel cells. According to the 2025 semi-annual report, the company achieved operating revenue of RMB 20.917 billion, total profit of RMB 1.062 billion, and net profit attributable to shareholders of listed company of RMB 869 million in the first half of the year[2].

From the perspective of business structure, the company shows a good diversified development trend:

: As a traditional core business, it has benefited from the continuous advancement of the “trade-in” subsidy policy and the implementation of the “new national standard”, showing the characteristics of “policy providing support, demand driving growth”, which has injected new momentum into the industry’s prosperity[2]. The 6-DZF-20 battery launched by the company in the electric bicycle field weighs only 5.5kg, has a capacity of 20Ah, a cycle life of more than 350 times, and a maximum service life of 3 to 5 years, demonstrating the technical advantages of the product[2].

: In the first half of 2025, it achieved operating revenue of RMB 540 million, a year-on-year increase of 192.73%[2]. The energy storage business has made a number of important breakthroughs, including establishing strategic cooperation with industry leaders such as ZTE Corporation, and the 37.5MW/100.5MWh energy storage power station project in Hexian, Ma’anshan, built in cooperation with Towngas Smart Energy, has been successfully connected to the grid for operation[2].

: The company’s hydrogen fuel cells have overcome four major technical bottlenecks including system integration, control algorithms, and bipolar plate sealing, and has taken a key step from “technology R&D” to “commercialization”. The self-developed hydrogen fuel cell engine system has achieved small-batch mass production and delivery in scenarios such as loaders, buses, and two-wheelers[2].

According to real-time market data, Tianneng Co., Ltd.'s current stock price is RMB 33.61, with a market capitalization of USD 3.26 billion (equivalent to approximately RMB 23.8 billion), a TTM price-to-earnings ratio of 22.56 times, and EPS of RMB 1.49[3]. The company’s 52-week stock price range is RMB 22.31-36.58, and the current price is in the upper-middle range[3].

According to the data in the 2025 semi-annual report, the company’s ending balance of trading financial assets is RMB 2.499 billion, a year-on-year increase of 264.29% compared with the beginning of the period, mainly due to the increase in the purchase of bank wealth management products[4]. This data indicates that the company had already carried out large-scale wealth management investment activities before announcing the RMB 12 billion entrusted wealth management plan.

Analyzed from multiple dimensions, Tianneng Co., Ltd.'s launch of the RMB 12 billion entrusted wealth management plan

that the company has limited opportunities for main business expansion:

It can be seen from the company’s semi-annual report that the company has made major investment layouts in projects such as the expansion project of Jiangsu Tianneng Offshore Wind Power Equipment Manufacturing Base and the technical transformation project of Jilin Tianneng Tower Tube Manufacturing Production Line[5]. In the first half of 2025, the company’s construction in progress decreased by 37.72% compared with the beginning of the year, mainly due to the transfer of construction in progress to fixed assets, which indicates that the company’s previously invested projects are gradually being converted into production capacity[4].

The company has established an integrated marketing and after-sales network covering more than 3,000 distributors and over 400,000 stores in 32 provinces, autonomous regions, and municipalities directly under the Central Government. It has established production bases in regions with strong demand such as Zhejiang, Anhui, Henan, and Jiangxi, and is equipped with an efficient logistics system to achieve rapid response to customer needs[2]. The construction and maintenance of this network requires continuous capital investment.

The company attaches great importance to R&D work, and will continue to increase R&D investment, strengthen the construction of R&D system and team, expand the introduction and training of R&D personnel, and continuously improve the company’s technological innovation capability[4]. High R&D investment is the key for the company to maintain its technological leading advantage.

The company clearly stated that the entrusted wealth management is carried out “on the premise of ensuring the capital needs of daily business operations and effectively controlling investment risks, and will not affect the company’s daily capital turnover or the normal development of the company’s main business”[4]. This indicates that the company has fully guaranteed the capital needs of its main business.

The impact of the RMB 12 billion entrusted wealth management plan on shareholder returns is two-sided:

• Based on the current market environment where the annualized yield of medium- and low-risk wealth management products is about 2.5%-4%, the RMB 12 billion fund can contribute approximately RMB 300 million to 480 million in wealth management income per year
• This part of the income will directly increase the company’s net profit and improve earnings per share
• Based on the company’s current net profit attributable to shareholders of listed company, wealth management income can increase net profit by approximately 17%-28%

• Wealth management income is subject to certain market fluctuation risks, which may be affected by changes in the macroeconomic environment[1]
• If the entrusted wealth management funds are invested in the main business, it may generate higher investment returns
• The company needs to strike a balance between the safety and profitability of wealth management

1. Improve Capital Utilization Efficiency
   : Through entrusted wealth management, the company can improve the utilization efficiency of idle funds and increase capital returns, which to a certain extent reflects the improvement of the company’s financial management capability.
2. Maintain Financial Prudence
   : Choosing medium- and low-risk wealth management products indicates that the company attaches great importance to capital security while pursuing returns, which is conducive to safeguarding shareholder interests and the company’s long-term stable development.
3. Enhance Risk Resistance Capability
   : Sufficient cash reserves and stable wealth management income can enhance the company’s ability to cope with market fluctuations and industry risks.

1. Market Expectation Management
   : The large-scale entrusted wealth management plan may be interpreted by the market as the company’s lack of confidence in the development prospects of its main business, and the company needs to eliminate this concern through effective investor communication.
2. Investment Direction Selection
   : The company needs to balance the relationship between wealth management investment and main business investment to ensure that it will not miss development opportunities in the main business due to excessive pursuit of wealth management income.

Comparing Tianneng Co., Ltd.'s entrusted wealth management plan with peer companies:

Company Name	Wealth Management Scale	Operating Revenue Scale	Wealth Management/Revenue Ratio	Wealth Management Type
Tianneng Co., Ltd.	RMB 12 Billion	RMB 20.9 Billion (2025H1)	57.4%	Medium-Low Risk Wealth Management
Tianneng Heavy Industry	RMB 1 Billion	RMB 1.458 Billion (2025H1)	68.6%	Capital-Guaranteed Wealth Management
Industry Average	RMB 500 Million - 3 Billion	-	10-30%	Medium-Low Risk Wealth Management

From the perspective of peer comparison, the scale of Tianneng Co., Ltd.'s RMB 12 billion wealth management plan is relatively large, but considering that the company’s operating revenue scale is also at the leading level in the industry and the funds come from idle self-owned funds, the plan is generally within a reasonable range.

Based on the above analysis, we make the following assessment of Tianneng Co., Ltd.'s RMB 12 billion entrusted wealth management plan:

• The company’s main business maintains a good development trend, with the lithium battery business seeing a year-on-year increase of 192.73%
• The lead-acid battery business benefits from policy dividends, with clear growth prospects
• The hydrogen fuel cell business has achieved commercialization, opening a second growth curve
• The wealth management plan uses idle self-owned funds, which does not affect the capital needs of the main business

• The market may have a negative interpretation of the large-scale wealth management plan
• Wealth management income is subject to certain fluctuation risks
• It is necessary to continuously pay attention to the progress of the company’s main business investment

1. Macroeconomic Risk
   : The financial market is greatly affected by the macroeconomy, and it cannot be ruled out that such investment income will be affected by market fluctuations[1]
2. Policy Risk
   : The battery industry is greatly affected by policies, and changes in new energy subsidy policies may affect the company’s performance
3. Market Competition Risk
   : The battery industry is highly competitive, and the company needs to continuously maintain technological and cost advantages
4. Execution Risk
   : The actual execution effect of the entrusted wealth management plan depends on the company’s investment decision-making capability and the market environment

Overall, Tianneng Co., Ltd.'s launch of the RMB 12 billion entrusted wealth management plan

, but is based on the following considerations:

1. Optimization of Capital Management
   : Improve the utilization efficiency of idle funds on the premise of ensuring the capital needs of the main business
2. Consideration of Financial Prudence
   : Choose medium- and low-risk wealth management products to balance returns and security
3. Shareholder Return Demand
   : Increase the company’s performance through wealth management income and enhance shareholder returns

From the perspective of the company’s fundamentals, Tianneng Co., Ltd. is in a critical period of business transformation. The lithium battery business is growing rapidly, the hydrogen fuel cell business has achieved commercialization, and the lead-acid battery business has benefited from policy dividends. The company’s future development prospects are still broad. Investors should focus on the company’s investment layout and development strategy in the main business field, rather than overinterpreting the scale of the entrusted wealth management plan.

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[1] Cailianshe - Tianneng Co., Ltd.: Plans to Use No More Than RMB 12 Billion of Self-Owned Funds for Entrusted Wealth Management (https://www.cls.cn/detail/2251824)

[2] Caiwen News - Tianneng Co., Ltd. 2025 Semi-Annual Report: Policy Dividends Drive Main Business Growth, Diversified Layout Builds Long-Term Competitiveness (https://www.caiwennews.com/article/1397838.shtml)

[3] Jinling API - Real-Time Market Data of Tianneng Co., Ltd. [0]

[4] Tianneng Co., Ltd. 2025 Semi-Annual Report - Information on Trading Financial Assets and Entrusted Wealth Management [4]

[5] Qingdao Tianneng Heavy Industry Co., Ltd. 2025 Semi-Annual Report - Comparison of Investment Situations of Tianneng System Companies [5]