Zhejiang Huaye Plans to Invest 1.49 Billion Yuan to Resolve Production Capacity Bottlenecks, Committed to Maintaining Long-Term Domestic Market Share Leadership in Innovative Products

Yangtze River Business News ● Yangtze River Business Reporter Huang Cong

Current production capacity cannot meet the company’s order demand, Zhejiang Huaye (301616.SZ) has begun expanding production.

On the evening of March 22, Zhejiang Huaye announced that the company plans to invest in the Mu’ao production base project, with the first phase investment of 398 million yuan and the second phase investment of 1.094 billion yuan, totaling 1.492 billion yuan.

Zhejiang Huaye explained that by the first half of 2025, the capacity utilization rate of their screw barrel products will reach 110%; the capacity utilization rate of their collet products will reach 100%. The second phase project aims to enhance the production capacity of screws, barrels, and collets to break through current capacity bottlenecks and increase product added value.

As one of the first “Little Giants” and high-tech enterprises recognized by the Ministry of Industry and Information Technology, Zhejiang Huaye adheres to an innovation-driven development strategy. As of June 30, 2025, Zhejiang Huaye has applied for a total of 132 patents based on accumulated technology and innovation practices.

Notably, according to the China Plastics Machinery Industry Association, from 2022 to 2024, Zhejiang Huaye’s market share in China’s plastic machinery screw and barrel products was 12%, 12.5%, and 13.2%, respectively, ranking first in the market.

Second Phase Investment of 1.094 Billion Yuan

Zhejiang Huaye specializes in supporting components for plastic machinery, mainly engaged in R&D, production, and sales of core parts for plastic molding equipment. The company has mastered key technologies across the entire production process, including formulation, processing, and surface treatment, forming a relatively complete product R&D and manufacturing system, ensuring steady business development.

On the evening of March 22, Zhejiang Huaye announced that to adapt to market development trends, optimize industrial layout, and cultivate new profit growth points, the company plans to invest in the Mu’ao production base project according to its strategic development plan.

The announcement states that the total investment for the Mu’ao production base project is 1.492 billion yuan, divided into the approved first phase (hereinafter “Phase 1”) and the planned second phase (hereinafter “Phase 2”).

Phase 1 is a fundraising project with a total investment of 398 million yuan, of which 227 million yuan will be raised. The second phase aims to build efficient, flexible production lines to enhance the capacity of screws, barrels, and collets, breaking through existing capacity bottlenecks, with a planned total investment of 1.094 billion yuan (final investment will depend on actual spending).

Zhejiang Huaye stated that the second phase project still requires approval from the company’s shareholders’ meeting and is currently in internal project approval and review stages.

The company indicated that the implementation of the second phase project will further solidify its large-scale production capacity of plastic machine parts, explore new paradigms of mass customization with personalized and tailored production, further leverage scale advantages, reduce production costs, improve overall competitiveness, meet high standards and demands of customers, increase customer loyalty, and thus support the company’s strategic development goals.

According to production line worker hours, in the first half of 2025, Zhejiang Huaye’s capacity utilization for screw barrel products reached 110%, and for collet products, 100%. The existing capacity cannot meet order demand, so the second phase project will focus on increasing production capacity for screws, barrels, and collets to break through capacity limits and boost product added value.

Zhejiang Huaye believes that once the second phase project is fully operational, the Mu’ao production base is expected to achieve an annual output value of about 1.2 billion yuan, which will strongly help the company seize market opportunities, expand market share, further enhance profitability and overall competitiveness, and continuously strengthen its leading position in the industry.

Core Technologies Are Independently Developed

Zhejiang Huaye was one of the earliest companies in the plastic machinery supporting parts industry. Through nearly 30 years of development and accumulation, it has become a leading manufacturer of customized core components for plastic molding equipment. The company was listed on the Growth Enterprise Market in March 2025, with rapid performance growth before and after listing.

In 2024, Zhejiang Huaye achieved operating revenue of 892 million yuan, a year-on-year increase of 21.20%, setting a record high; net profit attributable to shareholders was 92.93 million yuan, up 32.21%; non-recurring net profit was 90.72 million yuan, up 37.02%.

According to the China Plastics Machinery Industry Association, from 2022 to 2024, Zhejiang Huaye’s market share in China’s plastic machinery screw and barrel products was 12%, 12.5%, and 13.2%, respectively, ranking first.

Zhejiang Huaye states that with industry-leading R&D capabilities, accumulated industrial technology, and high-quality products, it has gained widespread recognition from domestic and international customers and established long-term stable partnerships with many top plastic molding equipment manufacturers worldwide.

Recently, Zhejiang Huaye released a performance forecast showing that in 2025, net profit attributable to shareholders will reach between 195 million and 205 million yuan, a year-on-year increase of 109.82% to 120.58%; non-recurring net profit will be between 91 million and 101 million yuan, up 0.31% to 11.33% from the previous year.

The company explained that during this period, benefiting from strong support from national “old-for-new” government subsidies and increased demand from the new energy vehicle and 3C electronics industries, it maintained long-term stable cooperation with downstream major plastic molding equipment manufacturers such as Haitian International and Yizumi, responding quickly to market needs with its accumulated process technology and product quality.

Additionally, Zhejiang Huaye noted that during this period, the 138 million yuan compensation funds received by its wholly owned subsidiary Ningbo Huaye will be recorded as non-operating income.

As one of the first “Little Giants” and high-tech enterprises recognized by the Ministry of Industry and Information Technology, Zhejiang Huaye adheres to an innovation-driven development strategy.

From 2022 to 2024, R&D expenses were 21.66 million, 22.99 million, and 30.05 million yuan, respectively, increasing by 2.26%, 6.10%, and 30.73% year-on-year.

In the first three quarters of 2025, R&D expenses reached 22.27 million yuan, up 7.89% year-on-year.

As of June 30, 2025, Zhejiang Huaye had applied for a total of 132 patents, including 17 invention patents and 115 utility model patents, based on accumulated technology and innovation practices.

Founder and Chairman Xia Zengfu stated that the company always regards technological innovation as a key means to enhance core competitiveness, with all core technologies developed independently. In the first half of 2025, R&D mainly focused on new products and processes related to barrels, screws, and collets, with 14 projects ongoing. The company’s screw and barrel products excel in surface hardness, quenching hardness, and other key technical parameters, surpassing industry standards and Zhejiang manufacturing group standards.

Editor: ZB