Chinese Robot Stock Sleeper Star Dragon Electric Drive Files for Hong Kong IPO, Five Major Customers and Suppliers Show Overlapping Relationship

Xinhua News Agency reporter Cai Ding Xinhua News Agency editor Wei Guanhong

According to the Hong Kong Stock Exchange website on August 13, Star Dragon Electric Drive Group Co., Ltd. (hereinafter referred to as Star Dragon) submitted its listing application to the Hong Kong Stock Exchange, with joint sponsors being China Goldasset, Haitong International, and Guangfa Securities (Hong Kong). This is just over a month after the company's board of directors approved the proposal for issuing H shares on July 21.

On August 14, Star Dragon's A-share surged to a halt. On August 15, it rose again and halted. On August 18, it rose by 7.97%.

Star Dragon is the world's leading company in the field of explosion-proof electric drive systems, with a global market share ranking first according to a report by Frystat-Sullivan. The company has established a network of over 143 distributors.

Star Dragon was listed on the Shanghai Stock Exchange in June 2002 and is headquartered in Shaoxing, Zhejiang Province.

According to the company's Hong Kong IPO application, Star Dragon mainly engages in the research, development, production, sale, and service of electric drive system products and solutions. The company has built its business around five major sectors: explosion-proof electric drive systems, industrial electric drive systems, HVAC electric drive systems, new energy transportation electric drive systems, and robot components and system applications.

The company cited data from Frost & Sullivan saying that as of 2024, Star Dragon ranked first globally in the explosion-proof electric drive systems market, with a market share of 4.5%.

Star Dragon has established a global manufacturing network with 45 factories worldwide, including 14 overseas factories in countries such as Germany, Poland, Italy, Vietnam, and Mexico.

The company's sales team, which consists of over 9,600 employees, supports the global manufacturing network's operations.

Looking at the first half of 2025, Star Dragon's domestic revenue accounted for 58.8% of its total revenue, down from 64.8% in 2024. The company's revenue from European, Middle Eastern, and African markets fell to 15.6%, while revenue from American and Asian markets (excluding China) continued to rise.

From 2022 to 2025, Star Dragon's revenue was RMB 142.66 billion, RMB 155.67 billion, RMB 162.47 billion, and RMB 80.31 billion, respectively. Profit was RMB 8.39 billion, RMB 5.53 billion, RMB 8.32 billion, and RMB 5.48 billion, respectively.

According to the application file, Star Dragon adopted a direct sales strategy with a combination of direct sales and distribution channels, with direct sales contributing most of the company's revenue during the reporting period.

The application file noted that Star Dragon had overlapping relationships between its five major customers and suppliers. The company provided explosion-proof electric drive system solutions to customer A and B, which were also major suppliers of silicon steel and electromagnetic materials to Star Dragon respectively.

Star Dragon had also purchased silicon steel from supplier C and D, while providing defense and industrial electric drive system solutions to supplier C and D respectively.

Regarding customers A and B, Star Dragon said: "This situation is due to our long-term business relationships and complementary needs in the supply chain. Customer A and B are both leading companies in the home appliance industry, on one hand they have a large demand for explosion-proof electric drive system solutions; on the other hand they have rich industry experience and resources in silicon steel and electromagnetic materials, which can provide us with high-quality raw materials."

Adjusting business structure in the first half of 2025

Xinhua News Agency reporter noted that Star Dragon adjusted its business structure in the first half of 2025, including divesting four new energy companies (solar power, energy storage, hydrogen power, and wind power) with a total value of over RMB 7 billion, focusing on electric motor and control main businesses, reducing resource dispersion and low-efficiency business burdens. The company also completed the development of robot core components and production.

In the first half of 2025, Star Dragon's robot component and system application business accounted for only 2.7% of its total revenue, but the company revealed details about this business for the first time in its application file. Specifically, this business includes "outer skeleton and dexterous hand" "joint module" "servo motor and controller" and "robot system applications."

According to publicly available information, Star Dragon's subsidiary company, HiL Company, is a robot system integrator, has established deep cooperation with Zhejiang Humanoid Robot Innovation Center, Zhimebot, and other companies in the field of humanoid robots.

In June 2025, Star Dragon and Zhimebot signed a strategic investment agreement, becoming a strategic shareholder of this robot innovation company. Based on this equity cooperation, both parties will leverage their respective strengths in smart equipment and robotics to promote the development of core technology for humanoid robots and industrial applications.

Star Dragon also holds a stake in Utech through its subsidiary company, Jinshi Growth Fund. According to media reports, Star Dragon is the key component supplier for Utech's robot arms, providing high-explosion-proof joint modules, servo drivers, and other critical components, while also jointly developing products such as no-backlash electric motors.

According to a press release issued by Star Dragon on June 18, this IPO is aimed at "deepening the company's globalization strategy, enhancing its international image and comprehensive competitiveness"."

The application file shows that Star Dragon plans to use the funds raised from this IPO to expand capacity, upgrade production infrastructure, enhance global R&D capabilities, invest in new fields, develop global sales and service networks, and cover general operating expenses. As of June 30, 2025, Star Dragon's cash and cash equivalents stood at RMB 27.92 billion.

Regarding the scale of this IPO, on August 14 afternoon, Xinhua News Agency reporter repeatedly contacted Star Dragon but failed to get a response.