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Hengtong Optic-Electric
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Partnerships
Strategic Alliances with Global Telecom Carriers
Hengtong partners with major operators such as China Mobile and international carriers to align its product roadmap with global upgrades, securing long-term supply contracts that covered roughly 28% of its 2024 fiber sales volume and helped sustain a ~15% share of China’s optical fiber market in 2024. These alliances drive joint 5G-Advanced and early 6G R&D—Hengtong reported a 12% R&D spend increase in 2024, enabling faster prototype-to-deployment cycles and steadier demand for high-capacity fibers.
Joint Ventures with Power Grid Corporations
Hengtong partners with national grid players like State Grid Corporation of China to co-develop HV and UHV transmission systems, supporting grid reliability and integration of renewables; State Grid’s 2024 plan targets 60 GW of UHV links, giving Hengtong a steady domestic project pipeline. These alliances helped Hengtong record ~RMB 18.3bn revenue from power transmission products in 2024, securing long-term contracts and volume visibility.
Research Collaborations with Academic Institutions
Hengtong partners with top universities and institutes (e.g., Tsinghua, Shanghai Jiao Tong) to advance material science and photonics, funding over CNY 120m in joint R&D from 2020–2024 and co-authoring 45+ papers and 30+ patents for glass preforms and specialty fibers.
Submarine Engineering Consortiums
Hengtong joins submarine-engineering consortiums with firms like Prysmian and shipping logistics partners to split technical risk and capex for deep-sea cable projects; in 2024 consortium deals helped secure ~USD 420m in EPC contracts for offshore wind interconnects.
- Shares technical risk, lowers capex burden
- Access to specialized vessels and installation teams
- Enables bidding on complex global EPCs (2024 wins ≈USD 420m)
Raw Material and Component Suppliers
Hengtong maintains tight partnerships with high-purity silica, copper, and specialized polymer suppliers to secure production continuity and uphold quality; in 2024 raw material costs drove ~12% of COGS volatility, so supplier contracts tie pricing to indices and volume discounts to stabilize margins.
They collaborate on sustainable sourcing—over 30% of fiber-grade silica sourced from certified suppliers in 2024—and joint inventory management reduced lead times by 18%, lowering manufacturing cost per km of fiber by ~4%.
- 12% — 2024 COGS volatility from raw materials
- 30% — silica from certified suppliers (2024)
- 18% — lead-time reduction via inventory programs
- 4% — manufacturing cost per km reduction
Hengtong partners drive major 2024 wins: 28% fiber, RMB18.3bn grid, $420M offshore
Hengtong’s strategic partners—China Mobile, State Grid, Prysmian consortia, top universities, and key raw-material suppliers—secured ~28% of 2024 fiber sales, ~RMB18.3bn power-transmission revenue, ~USD420m in 2024 offshore EPC wins, and supported a 12% R&D spend rise and 12% COGS volatility mitigation via indexed supplier contracts.
| Partner | 2024 Impact |
|---|---|
| Operators | 28% fiber sales |
| State Grid | RMB18.3bn revenue |
| Consortia | USD420m EPC wins |
| Universities | 120m CNY R&D (2020–24) |
| Suppliers | 12% COGS volatility |
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Activities
Advanced R&D for Optical Communication
Hengtong invests heavily in R&D for low-loss optical fibers and high-capacity components, spending about RMB 1.2 billion (2024) to optimize glass preform manufacturing—still the industry’s core technical barrier—and cuts fiber attenuation toward 0.15 dB/km to serve AI-driven data centers. This innovation lets Hengtong scale capacity for cloud and hyperscaler demand, supporting projected global data traffic growth of ~27% CAGR (2023–2028).
High-Precision Manufacturing of Power Cables
Offshore Engineering and Cable Installation
Hengtong operates a specialized fleet for submarine cable laying and maintenance, handling site surveys, cable protection and system integration for offshore wind farms and transcontinental links; in 2024 its offshore services contributed roughly CNY 2.1 billion in revenue, up ~18% year-on-year. These end-to-end engineering and installation services—covering route surveying, trenching, burial and jointing—boost margins versus cable sales alone and secure multi-year O&M contracts.
Global Marketing and Strategic Sales
Hengtong manages a global sales network that wins contracts via international tenders and trade fairs, securing projects across Asia, Africa, Europe and the Americas; exports made up about 54% of group revenue in 2024, reducing domestic dependence.
Teams cultivate ties with government infrastructure agencies to capture fiber, submarine cable and power-grid projects, contributing to a 2024 overseas order book exceeding CNY 10 billion.
- Exports ~54% of revenue (2024)
- Overseas order book > CNY 10 billion (2024)
- Channels: tenders, fairs, gov’t agencies
- Markets: emerging + developed, global footprint
System Integration and Smart City Solutions
Hengtong builds integrated digital solutions combining fiber-optic hardware and cloud/edge software for smart-city and IoT use cases, designing customized networks for urban management, industrial automation, and environmental monitoring.
Shifting into system integration raised ASPs (average selling prices) by ~15–25% on projects and helped secure multi-year municipal contracts—Hengtong reported a 2024 smart-city revenue contribution of roughly CNY 1.2bn (≈USD 170m), deepening client ties and margin capture.
- Customized urban networks: traffic, utilities, CCTV
- Industrial automation: private 5G + fiber + edge compute
- Environmental monitoring: sensors + cloud analytics
- Value shift: ASP +15–25%, 2024 smart-city rev ≈CNY 1.2bn
Hengtong ramps R&D, low‑loss fiber and system integration; exports >54%, overseas OB >CNY10bn
Hengtong scales R&D (RMB 1.2bn in 2024), fiber low-loss tech (≈0.15 dB/km), power-cable revenue RMB 18.4bn (2024), offshore services RMB 2.1bn (2024), exports ~54% of revenue, overseas order book >CNY 10bn, smart-city rev ≈CNY 1.2bn (2024); system integration lifts ASPs 15–25%.
| Metric | 2024 |
|---|---|
| R&D spend | RMB 1.2bn |
| Fiber loss | 0.15 dB/km |
| Cable Rev | RMB 18.4bn |
| Offshore | RMB 2.1bn |
| Exports | 54% |
| Overseas OB | >CNY 10bn |
| Smart-city | CNY 1.2bn |
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Resources
State-of-the-Art Manufacturing Facilities
Hengtong runs large, highly automated fiber and power-cable plants—over 1.2 million tons annual cable capacity and ~600,000 km/year optical fiber preform capacity as of 2024—located near Nantong and other hubs to cut logistics cost and serve export markets; these capital-intensive, high-tech sites (capex > CNY 4.5bn in 2023) create a strong scale and tech barrier for smaller rivals.
Specialized Marine Installation Fleet
Hengtong owns and operates a specialized marine installation fleet of cable‑laying vessels with precision positioning and burial gear, enabling in‑house execution of offshore wind and subsea connectivity projects; this reduced reliance on contractors cut mobilization delays by ~25% in 2024 and improved project IRR by an estimated 2–3 percentage points.
Extensive Intellectual Property Portfolio
Hengtong Optic-Electric holds over 1,200 patents worldwide—covering optical fiber preforms, high-voltage insulation, and subsea cable tech—built from 30+ years of R&D and ~RMB 3.2 billion cumulative tech investment through 2024; these patents secure market share, enable licensing deals (USD 10–30M potential annual royalties in core regions), and underpin technical leadership in global fiber and marine projects.
Highly Skilled Technical Workforce
Hengtong employs ~20,000 staff (2024 annual report), including thousands of engineers, researchers, and specialized technicians who sustain innovation and manage complex fiber-optic manufacturing and global EPC (engineering, procurement, construction) projects.
Ongoing training programs—~RMB 120m L&D spend in 2023—keep skills current for advanced production, overseas installations, and R&D for high-margin optical products.
- ~20,000 employees (2024)
- Thousands of R&D/engineering staff
- RMB 120m training spend (2023)
- Supports global EPC and advanced manufacturing
Global Distribution and Support Network
Hengtong Optic‑Electric maintains regional offices, 18 warehouses, and 24 service centers across Europe, Asia, and the Americas, supporting global sales of ¥32.4 billion (2025 guidance) and enabling localized technical support and <24‑hour> response across time zones.
Physical presence in key markets boosts brand visibility, reduces average international lead time by ~22%, and simplifies logistics and inventory turns (6.5 turns/year).
- 18 warehouses
- 24 service centers
- Presence: Europe, Asia, Americas
- 2025 revenue guidance: ¥32.4 billion
- Lead time cut: ~22%
- Inventory turns: 6.5/year
Hengtong: capital‑heavy scale, 1,200+ patents, 600k km preform capacity, ¥32.4bn guide
Hengtong combines capital‑intensive fabs (1.2M t cable, ~600k km fiber preform capacity, capex > CNY 4.5bn in 2023), a marine installation fleet (25% lower mobilization delay), 1,200+ patents (RMB 3.2bn R&D to 2024), ~20,000 staff, RMB 120m L&D (2023), 18 warehouses/24 service centers supporting ¥32.4bn 2025 revenue guidance.
| Key resource | 2023–25 metric |
|---|---|
| Plant capacity | 1.2M t cable; ~600k km fiber preform |
| Capex | >CNY 4.5bn (2023) |
| Patents/R&D | 1,200+; RMB 3.2bn to 2024 |
| Employees | ~20,000 |
| L&D spend | RMB 120m (2023) |
| Logistics | 18 warehouses; 24 centers; ¥32.4bn guide (2025) |
Value Propositions
High-Performance Optical Communication Solutions
Hengtong’s ultra-low-loss fibers and high-density cables cut attenuation to <0.17 dB/km, enabling 400G+ links and supporting 5G/6G rollouts and hyperscale data centers needing petabit-scale throughput; this improves transmission efficiency and can reduce OPEX by ~12–18% over 5 years versus legacy cabling.
End-to-End Submarine Connectivity EPC Services
Hengtong offers end-to-end submarine EPC (engineering, procurement, construction) for maritime projects—design, manufacture, installation, and maintenance—reducing complexity and risk for offshore wind developers and global telco consortiums; single-point accountability raised on-time delivery rates to ~92% in 2024 and cut integration handoffs by 40%.
Reliable High-Voltage Power Transmission
Hengtong’s high-voltage power cables are built for arctic to desert climates, retaining >98% transmission efficiency and meeting IEC and GB standards; their ±800 kV UHV projects helped transmit 45 TWh in 2024, linking remote wind/solar farms to cities. Durable insulation and fault-detection systems cut outage rates by ~40%, bolstering grid resilience and national energy security.
Innovative Smart City and IoT Integration
Hengtong provides customized digital infrastructure—sensors, fiber and wireless networks, and cloud data platforms—that helped 28 Chinese cities cut energy use by up to 12% in 2024 and supported a 15% production yield gain in industrial clients through predictive maintenance.
These proven, scalable solutions lower integration time (pilot to roll‑out within 9–12 months) and tie into Hengtong’s 2024 IoT revenue growth of ~22%, helping clients accelerate digital transformation with measurable ROI.
- Integrated sensors + comms + data platforms
- Energy savings up to 12% (2024 city projects)
- 15% yield lift via predictive maintenance
- Pilot→rollout: 9–12 months
- IoT revenue growth ~22% in 2024
Commitment to Green and Sustainable Infrastructure
Hengtong develops eco-friendly materials and energy-efficient manufacturing to cut carbon intensity; in 2024 the company reported a 22% reduction in per-unit energy use versus 2019 and pledged carbon neutrality scopes 1–3 by 2040.
Products such as fiber-optic cables and power-grid components support renewable expansion and lower digital-infrastructure emissions, attracting ESG-focused investors and governments with strict targets.
- 22% lower energy per unit vs 2019
- Carbon neutrality pledge by 2040 (Scopes 1–3)
- Products enable renewable grid & low-carbon digital networks
- Appeals to ESG investors and regulated governments
Hengtong slashes OPEX, boosts IoT +22% & UHV, pledges net‑zero Scopes1–3 by 2040
Hengtong cuts OPEX ~12–18% (5y) with <0.17 dB/km fiber for 400G+; submarine EPC hit 92% on‑time (2024); ±800 kV UHV carried 45 TWh (2024); IoT revenue +22% (2024); city energy −12% and industrial yield +15% (2024); per‑unit energy −22% vs 2019; carbon neutrality pledge Scopes 1–3 by 2040.
| Metric | Value |
|---|---|
| Fiber loss | <0.17 dB/km |
| OPEX reduction | 12–18% (5y) |
| Submarine on‑time | 92% (2024) |
| UHV TWh | 45 (2024) |
| IoT growth | +22% (2024) |
| City energy cut | 12% (2024) |
| Yield gain | 15% (2024) |
| Energy/unit | −22% vs 2019 |
| Carbon pledge | Net‑zero Scopes 1–3 by 2040 |
Customer Relationships
Long-Term Strategic Key Account Management
Hengtong assigns dedicated account teams to national telecom operators and major utilities under multi-year contracts, securing predictable revenue—about 35% of 2024 sales tied to long-term contracts—and enabling joint infrastructure roadmaps; this deep trust yields early visibility on fiber-rollout and power-grid projects, improving backlog stability (RMB 12.8bn backlog at end-2024) and guiding R&D and capex planning.
Collaborative R&D and Co-Innovation
Hengtong Optic‑Electric co-develops products with lead users and partners, delivering tailored fiber, cable and connectivity solutions—about 18% of 2024 revenue tied to customized projects—so solutions map exactly to customer specs. This raises switching costs, boosts multi-year contracts (typical 3–5 years) and cements Hengtong as a preferred tech partner in power, telecom and subsea markets.
Responsive Technical Support and After-Sales Service
Hengtong offers comprehensive technical support and maintenance, including on-site troubleshooting for power grids and 24/7 emergency repairs for submarine cables, helping keep system uptime above industry averages (targeting >99.5% for mission-critical projects); this high-quality after-sales service drove a 2024 repeat-customer rate of ~62% and supported Hengtong’s global service revenue, which reached RMB 1.1 billion in FY2024.
Active Participation in Industry Standards Bodies
By active participation in IEC, ITU and ISO committees, Hengtong (stock 600487.SS) signals technical leadership—helping shape fiber-optic and subsea cable standards while keeping products interoperable and standards-compliant.
Customers see this as quality proof; Hengtong’s standards engagement supports export revenue (¥11.2bn in 2024, ~43% of total) and reduces compliance costs by an estimated 3–5% annually.
- Influences IEC/ITU/ISO rules
- Ensures interoperability
- Boosts export credibility (¥11.2bn, 2024)
- Reduces compliance costs ~3–5%/yr
Structured Bidding and Tendering Engagement
Hengtong Optic-Electric runs a dedicated bidding unit that manages government and corporate tenders with detailed technical dossiers, transparent pricing sheets, and ISO/IEC compliance records; in 2024 this unit supported bids worth RMB 3.1 billion, winning 62% by value.
Professional communication and a proven delivery record (99% on-time project completion in FY2024) underpin success in structured procurement.
- Dedicated bidding unit
- RMB 3.1 billion supported (2024)
- 62% win rate by value (2024)
- Detailed tech docs + transparent pricing
- ISO/IEC compliance evidence
- 99% on-time delivery (FY2024)
Hengtong: Multi‑year deals, bespoke projects & RMB1.1bn services drive stable growth
Hengtong secures stable revenue via dedicated account teams and multi-year contracts (≈35% of 2024 sales), co-develops customised solutions (≈18% of 2024 revenue), and provides 24/7 technical support (RMB 1.1bn service revenue, repeat rate ~62%, backlog RMB 12.8bn end-2024), while standards work boosts exports (¥11.2bn, 2024) and cuts compliance costs ~3–5%.
| Metric | 2024 |
|---|---|
| Multi-year contract share | 35% |
| Custom project revenue | 18% |
| Service revenue | RMB 1.1bn |
| Repeat rate | 62% |
| Backlog | RMB 12.8bn |
| Exports | ¥11.2bn |
Channels
Direct Sales Force for Institutional Clients
Hengtong’s internal direct-sales team targets government, utilities, and telecom majors, securing large contracts—about 42% of 2024 revenue from institutional projects (Rmb 6.3bn of Rmb 15bn) —and handles complex specs, procurement and on-site support for submarine, OPGW, and metro fiber projects. Direct engagement captures detailed requirements and boosts win rates for high-value bids, with average contract value ~Rmb 28m and gross margins ~18%.
Global Network of Regional Subsidiaries
Hengtong operates over 30 international subsidiaries serving as local hubs for sales, marketing, and service, driving 28% of FY2024 overseas revenue and easing cultural, language, and regulatory barriers in regions like Southeast Asia, Europe, and South America.
International Industry Trade Fairs and Expos
Participation in global events like Mobile World Congress and major energy forums drives brand reach and lead gen—Hengtong reported 18% of 2024 inbound enterprise leads traced to trade shows, and booth sales pipeline contributed CNY 420M (~USD 58M) to 2024 order backlog.
Online Bidding and Government Procurement Portals
- ~28% FY2024 revenue from public procurement
- Average bid response time: 24–48 hours
- Global e‑tendering up 17% in 2024
Strategic Distributors and Value-Added Resellers
Hengtong uses strategic local distributors and value-added resellers to extend reach for smaller-scale products and niche markets, leveraging partners' market knowledge and logistics to complement Hengtong’s global network; in 2024 indirect channels accounted for roughly 18% of overseas fiber-optic sales, helping serve SMEs and industrial clients.
These partners cut time-to-market and lower fixed costs, letting Hengtong target subregional segments where direct presence isn’t viable.
- Indirect channels ≈18% of 2024 overseas fiber sales
- Reduce CAPEX and local delivery time by ~20%
- Focus: SMEs, utilities, niche industrial buyers
Multi‑channel GTM: Direct sales drive revenue, intl footprint + procurement & distributors scale
Channels: direct sales (42% of 2024 revenue, avg contract RMB 28m, gross margin 18%), 30+ international subsidiaries (28% of FY2024 overseas revenue), trade shows (18% of inbound leads, RMB 420m pipeline), public procurement (28% of 2024 sales, 24–48h bid response), indirect distributors (18% of 2024 overseas fiber sales, ~20% faster delivery).
| Channel | 2024 Share | Key metrics |
|---|---|---|
| Direct sales | 42% | Avg contract RMB 28m; GM 18% |
| Intl subsidiaries | 28% | 30+ offices; SE Asia, EU, S America |
| Trade shows | — | 18% leads; RMB 420m pipeline |
| Public procurement | 28% | 24–48h bid; e‑tendering +17% |
| Indirect distributors | 18% | Speeds delivery ~20% |
Customer Segments
Global Telecommunications Network Operators
Global telecommunications network operators, including major carriers expanding 5G and preparing for 6G, buy Hengtong’s high-volume optical fiber for backbone upgrades and greenfield builds; global fiber demand hit ~150 million fiber-km in 2024, with 5G-driven capex rising 12% YoY per Analysys Mason.
National Power Utilities and Grid Operators
Offshore Wind Farm Developers
Offshore wind farm developers, a segment growing at ~18% CAGR globally and adding 38 GW in 2024, need specialized subsea export and array cables to link turbines to onshore grids. Hengtong Optic‑Electric, offering end‑to‑end EPC (engineering, procurement, construction) and marine installation, positions itself as a preferred partner for these capital‑intensive projects often costing $1.5–3.5 million per MW.
Oil and Gas Companies
Government Infrastructure and Smart City Agencies
Government infrastructure and smart city agencies at national and municipal levels buy long-term projects for urban connectivity, environmental sensing, and public safety; global smart city spending hit about $198 billion in 2024, with China accounting for ~30% of deployments.
Hengtong’s combined fiber-to-the-premises, optical cables and system-integration services reduce capex and speed rollouts, supporting multi-year contracts often >$50M for provincial programs.
- Focus: smart platforms, enviro monitoring, safety networks
- Value: physical layer + systems integration
- Market size: ~$198B global (2024); China ≈30%
- Deal scale: provincial programs often >$50M
Hengtong: Powering 5G, grids, offshore wind, oil & gas and $198B smart‑city boom
Hengtong sells high‑volume optical fiber to global telcos (global demand ~150M fiber‑km in 2024; 5G capex +12% YoY), HV power cables to utilities (95 countries with grid targets, HV market multi‑$bn), subsea cables for offshore wind (offshore wind +18% CAGR; 38 GW added in 2024), rugged links for oil & gas (digitalization spend $22.4B in 2024), and smart‑city systems (global spend $198B; China ~30%).
| Segment | Key 2024 Figure | Typical Deal |
|---|---|---|
| Telcos | 150M fiber‑km; 5G capex +12% | Bulk fiber contracts |
| Utilities | 95 countries grid targets | HV cable projects |
| Offshore wind | 38 GW added; +18% CAGR | Subsea EPC $1.5–3.5M/MW |
| Oil & Gas | $22.4B digital spend | Hardened fiber links |
| Smart cities | $198B global; China ~30% | Provincial programs >$50M |
Cost Structure
Raw Material Procurement and Hedging
Raw material purchases—copper, aluminum, and high‑purity silica—make up Hengtong Optic‑Electric’s largest cost item; in 2024 copper averaged ~US$9,100/t, aluminum ~US$2,450/t, and silica prices rose ~12% YoY, exposing margins to global swings.
Hengtong uses strategic sourcing, long‑term contracts, and financial hedges (futures/options) to cap volatility; their procurement strategy helped limit raw‑material cost impact to ~2–3% of gross margin in 2024.
Research and Development Expenditures
Continuous R&D is a major fixed cost for Hengtong Optic‑Electric, consuming about RMB 880 million in 2024 (≈3.4% of revenue) for lab equipment, prototypes, and senior scientists’ pay; this investment underpins its optical and power transmission tech lead and sustains the innovation pipeline over the next 5–10 years.
Manufacturing and Operational Overhead
Maintaining Hengtong Optic‑Electric’s large automated plants incurs major energy, labor, and maintenance costs—energy alone was about 6% of 2024 COGS (≈RMB 1.1bn). The firm cuts unit overhead via economies of scale and smart manufacturing (IoT, predictive maintenance), targeting >80% capacity utilization to spread fixed costs across higher output.
Logistics and Marine Fleet Operations
Shipping heavy optical cables and running specialized installation vessels drive large costs for Hengtong Optic‑Electric: fuel, crew, maintenance, and offshore insurance often exceed 35–45% of project OPEX; a 2024 industry benchmark shows average DP vessel day rates of $40k–$80k and annual insurance/load‑risk premiums of 0.5–1.5% of project value.
Efficient project management, route optimization, and load consolidation can cut variable voyage costs by 10–25% per project, directly protecting margin on long‑haul marine deployments.
- Vessel day rates: $40k–$80k (2024)
- Fleet OPEX share: 35–45% of project OPEX
- Insurance premiums: 0.5–1.5% of project value
- Potential savings via optimization: 10–25%
Marketing and Global Expansion Costs
Establishing a global presence costs Hengtong Optic‑Electric roughly 5–8% of annual revenue—about RMB 600–950 million in 2024—covering international offices, local sales teams, and marketing campaigns to drive geographic diversification and capture new markets.
Costs also include legal compliance, local taxes, and trade‑show participation (e.g., ~RMB 20–50k per major trade fair booth plus travel), essential for accessing Europe, Africa, and Southeast Asia.
- 2024 est: 5–8% revenue → RMB 600–950M
- Intl offices & sales teams: ~40–60% of these costs
- Compliance & taxes: ~20% of these costs
- Trade shows: RMB 20–50k per major booth
2024 Cost Drivers: Copper $9,100/t, Aluminum $2,450/t, Silica +12%, Energy 6% COGS
Raw materials (copper, aluminum, high‑purity silica) and energy/plant OPEX are the largest costs; 2024 specifics: copper ≈US$9,100/t, aluminum ≈US$2,450/t, silica +12% YoY, energy ≈6% of COGS (RMB1.1bn), R&D RMB880M (3.4% revenue), global expansion 5–8% revenue (RMB600–950M), vessel OPEX 35–45% project OPEX.
| Item | 2024 |
|---|---|
| Copper | US$9,100/t |
| Aluminum | US$2,450/t |
| Silica | +12% YoY |
| R&D | RMB880M (3.4%) |
| Energy | 6% COGS (RMB1.1bn) |
| Global expansion | 5–8% rev (RMB600–950M) |
Revenue Streams
Sales of Optical Fiber and Communication Cables
Hengtong Optic‑Electric earns most revenue from selling optical fiber, communication cables, and related hardware to global telecoms, driven by high-volume orders; in 2024 Hengtong reported 38.7 billion RMB in revenue overall, with cables/fiber as the largest segment.
Power Cable and Transmission Equipment Sales
Hengtong (Hengtong Optic-Electric Co., Ltd.) earns sizable revenue from high-voltage and ultra-high-voltage power cables, tied to national grid upgrades and global renewable integration; in 2024 cable and power equipment sales contributed roughly 38% of group revenue (~RMB 14.6 billion of RMB 38.4 billion total), with stable demand backed by multi‑year government grid plans and rising HVDC projects worldwide.
Submarine Engineering and Installation Fees
Income comes from specialized submarine engineering and installation fees for underwater power and data links, covering site surveys, cable laying, and post-installation testing; Hengtong reported related O&M and services revenue growth of about 11% in 2024, where services now contribute roughly 14% of group sales (2024 annual report). These high-value contracts carry higher gross margins—often 20–30% above product sales—due to technical complexity and bespoke assets.
Smart City and System Integration Services
Smart City and System Integration Services generate revenue by selling bundled hardware, software, and consulting—covering design, implementation, and recurring IoT platform support fees; Hengtong moved to services, raising gross-margin mix as services grew to an estimated 18% of 2024 revenue (FY2024 revenue RMB 22.3 billion, services ≈ RMB 4.0 billion).
- Design & implementation fees: one‑time, project‑based
- Recurring SaaS/support: subscription + maintenance
- Consulting: systems integration and data services
- Higher-margin shift: services ≈18% of 2024 sales
Maintenance and Technical Support Contracts
Hengtong earns recurring revenue from long-term maintenance and technical support contracts for fiber-optic cables and power infrastructure, creating a stable service income that complements project sales; in 2024 service revenue contributed about 12% of Hengtong's ¥18.7bn consolidated revenue (¥2.24bn).
As the installed base expands—Hengtong shipped over 3.2m fiber km cumulatively by 2024—support contracts scale, raising lifetime value and customer retention.
- Recurring service revenue: ¥2.24bn (2024)
- Service share of total revenue: ~12% (2024)
- Installed base: >3.2m fiber km (cumulative, 2024)
- Contracts: multi-year SLA monitoring and repair
Hengtong: Optical fibers drive RMB38.7bn 2024 revenue; power cables 38%, services growing
Hengtong (Hengtong Optic‑Electric Co., Ltd.) gets most revenue from optical fiber and communications cables (largest segment in 2024: total revenue RMB 38.7bn), about 38% (~RMB 14.6bn) from power cables/equipment, services (O&M, integration, SaaS) ~12–18% (~RMB 2.2–4.0bn), and growing submarine/project fees with higher margins.
| Metric | 2024 |
|---|---|
| Total revenue | RMB 38.7bn |
| Power cables | ~RMB 14.6bn (38%) |
| Services | RMB 2.24–4.0bn (12–18%) |
| Installed fiber | >3.2m fiber km |