Zhejiang Hengwei’s Surge: A Case of Strategic Export‑Focused Growth

Zhejiang Hengwei (301222) has, in a single trading day, defied market expectations by hitting the 10‑day limit‑up threshold, a rare feat for a company whose shares have only ever touched the limit twice in its entire trading history. The rally is not a random flash of speculative enthusiasm; it is the culmination of a clear, data‑driven strategy that hinges on high‑performance zinc‑manganese battery exports and a disciplined capital‑structure optimization.

1. Capital‑Structure Shock and Share Price Explosion

On 15 September the company announced that the shareholder meeting had approved a share‑repurchase‑to‑write‑off program. 1,091,800 shares were moved from the repurchase pool to the “write‑off” list, shrinking the registered share capital from 101,333,400 to 100,241,600.
The reduction of nominal capital directly increases the book value per share and, more importantly, signals to investors that management is willing to commit to a tighter balance sheet. The move was immediately absorbed by the market, delivering the first catalyst for the 10 % jump on 17 September.

2. Export‑Led Revenue Engine

Hengwei’s core competency lies in high‑performance, environmentally friendly zinc‑manganese batteries. The company’s 2024 annual report and 2025 half‑year figures confirm that 87 % of sales are export‑based. Long‑term contracts with European customers—specifically in the UK, Germany, and Italy—provide a steady cash flow stream. The firm’s order book remains robust, ensuring that the export channel will continue to be the main driver of revenue growth.

3. Strategic Production Footprint

The company’s manufacturing base in Vietnam, which went online in July, is operating at high utilization. This geographic diversification reduces dependency on the Chinese domestic market, lowers shipping times to North America, and aligns with global supply‑chain trends that favor near‑shoring. The combination of an efficient overseas plant and a well‑established European network positions Hengwei to capture the rebound in North‑American demand, as noted in the 5‑month outlook reports.

4. Market Context: Battery‑Sector Momentum

The broader A‑share market on 17 September was buoyant, with the Shenzhen Composite and ChiNext indexes reaching new highs. Sector‑specific momentum—particularly in the battery and semiconductor themes—fueled a “rotational” rally. In this environment, Hengwei’s 10 % rally is amplified by the prevailing structural opportunity bias that investors are looking for high‑margin, high‑growth battery segments. The stock’s price‑earnings ratio of 22.24 sits comfortably within the industry median, suggesting that the market has not yet fully priced in the company’s export premium.

5. Investor Takeaway

  • Capital Discipline: Share write‑off signals strong governance and a focus on shareholder value.
  • Export Dominance: 87 % export share, stable long‑term contracts, and a growing European customer base provide a low‑variance revenue model.
  • Geographic Diversification: Vietnam plant increases supply‑chain resilience and positions the firm for North‑American demand recovery.
  • Sector Momentum: Battery theme is in a bullish phase, creating a favorable backdrop for a company with a high‑margin product line.

Zhejiang Hengwei’s limit‑up is a textbook illustration of how a company can leverage strategic capital moves, export concentration, and geographic diversification to ignite a strong market rally. For investors seeking a battery‑sector play that balances growth potential with operational stability, Hengwei now presents a compelling case.