{"text":[[{"start":7.55,"text":"This article only represents the author's own views."}],[{"start":11.2,"text":"Large wind farms in Northwestern China’s Gobi Desert suddenly landing in the doldrums, or AI data centers in Eastern China driving up electricity loads, or millions of electric vehicle owners all deciding to charge up in the evening hours. Such scenarios, which are growing in frequency, increasingly put today’s power grids to the test, forcing them to balance loading capabilities with the ability to dispense power to where it’s needed. That mix is where Shanghai KeLiang Information Technology Co. Ltd., which applied to list in Hong Kong last week, is finding a comfortable place as “invisible guardian” of China's power systems of the future."}],[{"start":50.349999999999994,"text":"Established in Shanghai in 2007, KeLiang provides power system simulation and verification technologies. It uses technologies such as electromagnetic transient simulation, hardware-in-the-loop (HIL) simulation, and frequency-domain stability analysis to build digital models for energy grids and large-scale energy systems, simulating their operating conditions under various extreme scenarios when they are still in the design phase."}],[{"start":77.55,"text":"Simply put, the company constructs virtual power grids in the digital world to simulate how energy and large-scale electricity consumption systems will perform under extreme conditions. Clients can then use that information to mitigate the risk of failures or massive fluctuations after systems are officially integrated into the grid. The company's revenue mostly comes from its simulation tools and customized solutions. In 2025, its revenue related to new power systems reached 508 million yuan ($75 million), accounting for 84.7% of its total. That ratio was up from 72% in 2024, showing that new energy power grid services are quickly becoming the company's most important growth engine."}],[{"start":123,"text":"Large-scale construction of wind and solar farms in recent years has transformed sparsely populated areas of Northwest China, such as the Xinjiang, Gansu, and Inner Mongolia regions, into powerful new bases for power generation. That shift has necessitated the transmission of vast amounts of green electricity to China’s power-hungry eastern regions through ultra-high voltage (UHV) transmission systems and voltage source converter-based high voltage direct current (VSC-HVDC) technology."}],[{"start":152.3,"text":"KeLiang has participated in all of China’s VSC-HVDC power transmission projects to become operational to date, according to its prospectus. This includes the Zhangbei VSC-HVDC Project, the world's first VSC-HVDC power grid project, which transmits wind and photovoltaic power from the Zhangbei region of Central China’s Hebei province to Beijing, and previously supplied green electricity for the Beijing Winter Olympics in 2022."}],[{"start":181.75,"text":"Largest independent supplier"}],[{"start":184.75,"text":"Third-party data in the prospectus shows that KeLiang was China’s largest independent domestic supplier of digital energy solutions for the new power system industry last year. It operates in a space that has long been dominated by China’s massive state-owned power grid operators and major state-owned equipment makers, making it relatively unique in its independence and market-driven focus."}],[{"start":209.7,"text":"More importantly, KeLiang’s industry is highly dependent on engineering case studies and long-term technological accumulation. For power grid companies, the simulation system constitutes a fundamental part of their infrastructure security planning. Consequently, grid operators are unlikely to easily allow any service providers lacking large-scale project references to participate in the verification of their core systems. That creates high barriers to entry that can benefit more established players like KeLiang, which has accumulated experience by working on more than 1,000 engineering projects to date."}],[{"start":243.85,"text":"The company's founder, Sang Suming, worked at the Shanghai Academy of Spaceflight Technology in his early years, before founding KeLiang in 2007. The need for high degrees of reliability for aerospace and power grid systems make both very suitable for a “simulate first, operate later” engineering mindset that underpins KeLiang’s business."}],[{"start":266.45,"text":"The company has posted relatively strong growth over the last two years, with revenue rising from 425 million yuan in 2023 to 599 million yuan last year, representing a cumulative 41.2% increase over that time. Its gross profit margin has also improved over that period, rising from 42.3% to 47.1%. Benefiting from the growing contribution of its higher-margin new power system business, the company's profit reached 93.03 million yuan in 2025, more than triple the 26.13 million yuan it recorded in 2024."}],[{"start":304.55,"text":"While many of the signs are positive, KeLiang still possesses some shortcomings. Perhaps most notably, the nature of its revenue is still heavily skewed towards a project-based model, rather than a typical software as a service (SaaS) model that provides more stable recurring revenue flows. This means that its revenue growth is highly tied to project cycles, making it more akin to a high-tech engineering services provider."}],[{"start":330.25,"text":"What’s more, the company currently relies almost entirely on China, deriving 99.7% of its income from the Mainland market in 2025. The company has yet to scratch the surface of the overseas market, and its current model shows its business is highly reliant on domestic infrastructure construction in China."}],[{"start":349.8,"text":"A positive factor for the company is China’s advancing “East Data, West Computing” project, which is seeing a large number of AI data centers being set up near recently constructed wind and solar farms in Western China. Such development, coupled with the buildup of ultra-high voltage transmission lines to bring power from Western China to the East, is making China’s grid increasingly complex. That should provide fertile ground for Keliang, as its simulation services that were once considered niche begin to attract investor attention."}],[{"start":382.65000000000003,"text":"Among China's current industrial simulation concept stocks, companies such as ZWSOFT (688083.SH) and Suochen Information (688507.SH) currently trade at price-to-sales (P/S) ratios ranging between 10 to 20 times. Such valuations are generally higher than those of traditional engineering companies, reflecting investor willingness to pay a premium for scarcer industrial software concept stocks. But KeLiang dependence on project contracts and engineering verification services could give pause for some investors. Whether the company can attain a valuation comparable to those of other industrial software firms will ultimately depend on its future capabilities in transitioning towards software and platform-based models that offer stable revenue streams."}],[{"start":438.6,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779949010_5621.mp3"}