Chai Lovol Smart Agriculture Technology Co., Ltd. (hereinafter referred to as "Weichai Lovol") recently submitted a prospectus to the Hong Kong Stock Exchange, planning to be listed on the main board of Hong Kong. As China's leading smart agriculture overall solution service provider, Weichai Lovol occupies an important position in the global market with its advanced intelligent agricultural machinery equipment and smart agricultural services.

The history of Weichai Lovol can be traced back to 2004, when the company was founded as Shandong Foton Heavy Industry Co., Ltd., focusing on agricultural machinery related businesses. After several rounds of equity changes and capital increases, as of June 15, 2025, the company is mainly held by Weichai Power and Weichai Holdings with approximately 61.10% and 27.26% of the equity. In August 2022, the company was officially renamed Weichai Lovol Smart Agriculture Technology Co., Ltd. to focus on agricultural machinery products and smart agricultural service-related businesses.

Over the past two decades, Weichai Lovol has established a set of smart agriculture overall solutions covering the entire cycle of agricultural production, including a complete set of intelligent agricultural machinery equipment and smart agricultural services. These solutions not only improve agricultural production efficiency, but also solve the problem of "who will farm" and promote the realization of "scientific farming".

Key Milestones

2006: Cooperated with the Ministry of Agriculture to establish the National Three Summer Cross-Region Operation Information Service Center.

2010: Established a comprehensive production capacity of 200,000 agricultural machinery per year and was selected as one of the first batch of Shandong Provincial Key Laboratories.

2016: Rated as one of the 500 Most Valuable Brands in China by the World Brand Lab.

2017: Tractor won the Red Dot Design Award, and the grain combine harvester was rated as one of the first batch of "Manufacturing Single Champion Products" that passed the re-evaluation.

2021: Joined Weichai Group and launched China's first commercial CVT intelligent high-horsepower tractor.

2023: Won the first prize of Shandong Provincial Science and Technology Progress Award and started construction of an intelligent tractor manufacturing base.

Weichai Lovol's business mainly revolves around two core pillars:

1. Complete set of intelligent agricultural machinery and equipment: covering all aspects of modern agricultural production from tillage, planting, field management, harvesting, straw processing to grain drying, focusing on high-end and intelligent agricultural machinery and equipment.

2. Smart agricultural services: based on real-time data of agricultural machinery operations, integrating IoT, artificial intelligence and big data technologies, comprehensively sensing the state of soil, crops and environment, using AI models to generate accurate operation decisions, and guiding intelligent agricultural machinery to carry out coordinated and precise operations.

In terms of controlling shareholders, as of June 15, 2025, the company is directly held by Weichai Power and Weichai Holding with approximately 61.10% and 27.26% of the shares, respectively. Weichai Power is held by Weichai Holding with approximately 16.32% of the shares, while Weichai Holding is wholly owned by Shandong Heavy Industry. Therefore, Weichai Power, Weichai Holding and Shandong Heavy Industry jointly have the right to control approximately 88.36% of the voting rights of the company.

As an important member company of Weichai Power Group and Shandong Heavy Industry Group, Weichai Lovol has multiple related-party transactions with the controlling shareholder and its affiliates. Involving the procurement of materials and services and the provision of products and services. These agreements are intended to improve cost-effectiveness through long-term and stable cooperative relationships and take full advantage of economies of scale.

Purchase raw materials, equipment and administrative services from Shandong Heavy Industry Group, with transaction amounts of RMB 7.7 billion, RMB 4.2 billion and RMB 5.5 billion in 2022-2024, and annual caps of RMB 10 billion, RMB 10.4 billion and RMB 10.6 billion in the next three years.

Provide agricultural machinery products and supporting services to Shandong Heavy Industry Group, with transaction amounts of RMB 14 billion, RMB 7.2 billion and RMB 7.3 billion in 2022-2024, and caps of RMB 7.6 billion, RMB 7.4 billion and RMB 7.4 billion in the next three years.

All related-party transactions are based on market-based pricing principles, refer to third-party transaction prices and cost factors, and are determined through fair negotiations. For example, the pricing of materials purchased from Shandong Heavy Industry Group must be combined with market prices, production costs and service specifications, and must not be lower than the price of transactions with independent third parties.

According to the data disclosed in the prospectus, Weichai Lovol has achieved significant financial growth in recent years:

Total revenue: Total revenue in 2024 reached RMB 17.4 billion, with an annual growth rate of 18.5%.

Net profit: Adjusted net profit reached RMB 980 million, a year-on-year increase of 12.1%.

Cash flow: Net cash flow from operating activities was RMB 3.8 billion, showing good liquidity.

Overseas business income: Overseas markets performed strongly, with overseas business income reaching RMB 1.73 billion in 2024, an annual growth rate of 37.2%.

In addition, Weichai Lovol plans to use the funds raised through this IPO mainly in the following areas:

1. Product research and development: Increase R&D investment, develop a new generation of new energy agricultural machinery products, and seize the green agriculture market.

2. Platform upgrade: Expand the scope of application of AI models and enhance the coverage area and technical level of smart agricultural service platforms.

3. Overseas expansion: Through holding subsidiaries, layout Southeast Asian and African markets, and replicate the successful model of Chinese smart agriculture.

4. Brand building: Strengthen brand promotion and enhance the company's visibility and influence in the global market.

According to the Application Guidance No. 15 of the Listing Rules, Weichai Lovol's listing application has been confirmed by the Stock Exchange. This listing will help Weichai Lovol further take advantage of capital market reform opportunities, expand financing channels, improve operating capabilities, bring stable returns to investors, and help Weichai Lovol build a global leading brand in the smart agricultural technology industry.