9981 — Shenzhen Woer Heat-Shrinkable Material Co., Ltd.

Deep-value: 9981.HK — Shenzhen Woer Heat-Shrinkable Material Co., Ltd. (深圳市沃尔核材)

Analysis date: 08/30/2026 · H price: HKD … · A price (002130.SZ): CNY 17.16 · Reporting currency: CNY · HKD/CNY: 0.8586

Note on sources. Woer is NOT an SEC filer — there is no EDGAR file and I did not run edgar_10k_downloader.py (it would have returned the wrong company or nothing). Primary sources are Chinese filings: the 2025 annual report (cninfo, 04/01/2026), the 2026 interim report (published 08/25/2026), the Q1 2026 report (04/24/2026), the HKEX listing prospectus (02/05/2026) and the full balance sheet/P&L/cash flow statements from money.finance.sina.com.cn (CAS format, units 万元). Every key figure was double-checked: the filing line vs. the yfinance series. Checkpoints that matched exactly: FY2025 revenue 8,450.66 mn CNY, gross margin 31.65%, cash 1,320.82 mn, short-term borrowings 592.00 mn, leasing 221.40 mn, equity attributable to the parent 6,497.11 mn (12/31/2025) and 9,192.98 mn (06/30/2026), total debt 2,340.01 mn (06/30/2026), TTM CFO 1,285.92 mn, TTM revenue 9,158.48 mn.

Executive summary

Woer is the world leader in heat-shrinkable materials (20.6% global share, #1) and China’s leader in high-speed communication cables (24.2% of the Chinese market, #2 globally) — i.e. the supplier of high-speed copper cables for short-distance interconnects in AI racks. The company has been listed since 2007 in Shenzhen (002130, 1,259,898,562 A-shares) and since 02/13/2026 in Hong Kong (9981, 139,988,800 H-shares, issued at HKD 20.09). Total: 1,399,887,362 shares with identical economic rights.

The thesis, in one sentence: you’re not buying a cheap company, you’re buying a company fairly valued in China at half the price in Hong Kong — and the rest of the analysis is about how much of that 49% discount is compensation for a real deterioration in earnings quality.

The numbers that matter. TTM revenue (06/30/2026) is 9,158.48 mn CNY, net profit attributable 1,152.48 mn, so a P/E of 10.56x on ALL 1,399.89 mn shares and a P/B of 1.324x on a book net asset value of 6.567 CNY/share. Watch out: yfinance reports P/E 9.74x and P/B 1.27x because it divides profit and equity by the A-share count only (1,259.90 mn), ignoring the 139.99 mn H-shares issued in February. The tracker inherited the error. The correction is 11.1% and moves the Graham Number from HKD 13.65 to HKD 12.84 (margin …, not …).

The H-share broke below its issue price and is down … from HKD 20.09 in six and a half months; the 52-week low is 9.51, the high 23.48. The A-share also fell from ~… CNY (February) to 17.16 CNY. The A/H discount, which was … at IPO, has widened to 49.3% (HKD … = CNY 8.698 vs CNY 17.16).

Estimated value. I triangulated five models. The declared owner earnings base is 760 mn CNY — 66% of net profit attributable, not 100%, because (a) expansion capex is 3.4x depreciation and simple free cash flow is negative on a TTM basis, (b) interest sits in FINANCING under Chinese standards, so CFO − capex is a pre-interest flow, (c) minorities take 4.6% of group profit, (d) working capital structurally absorbs ~35 cents of every yuan of incremental revenue. The result: an intrinsic value range of HKD 5.57 – 17.42, with a Monte Carlo median of HKD … and an undervaluation probability of …% out of 20,000 scenarios.

Verdict: WATCH, don’t buy at …. Not because the business is bad — it’s a good business, with real market share, a balance sheet with net cash of 1,439 mn CNY and an ROE of 15…. But because at today’s price the simulation’s median gives a margin of safety of …, and the gross margin deterioration (32.63% → 31.73% → 31.65% → 29.41% in H1 2026, with Q2 2026 at 28.59%) remains unresolved, while Chinese sell-side is projecting a profit doubling by 2027. My entry threshold is HKD 7.00–7.50 (25… margin versus the … median) OR a confirmed inflection: gross margin back above 31% and positive FCFE for two consecutive half-years. Both conditions are verifiable at the April 2027 annual report.