Erayak Power invests RMB97.6m in generator automation facility

Rhea-AI Filing Summary

Erayak Power Solution Group (RAYA) reports two linked contracts that launch a major production-capacity expansion in Wenzhou.

1) On 19 Feb 2025 subsidiary Ruike secured 50-year state-owned sea-area & land-use rights for an industrial plot in Longwan District. Consideration of RMB 17.57 m was paid in March 2025; registration is still pending. Non-compliance or payment delays could void the rights.

2) On 25 Mar 2025 Ruike signed a preliminary construction agreement with Zhongxia Construction to build a generator-automation plant and intelligent warehouse. Provisional price is RMB 80 m, of which RMB 17.2 m has been advanced. Project completion is targeted by 2027 with milestone, quality and penalty clauses.

Combined commitments of ≈RMB 97.6 m (≈US$13.3 m) aim to boost manufacturing efficiency and shorten delivery times, but introduce execution, regulatory and funding risks.

Positive

• 50-year land & sea-area rights secure scarce coastal industrial space, enabling long-term expansion.
• Planned generator-automation plant & intelligent warehouse should lift efficiency and shorten delivery cycles.
• Detailed milestone and penalty clauses in the construction contract enhance accountability and project quality.

Negative

• High cumulative capex of RMB 97.6 m may strain cash flow absent disclosed financing.
• Project completion by 2027 delays revenue benefits and exposes company to multi-year execution risk.
• Regulatory compliance conditions could trigger penalties or termination of land rights if unmet.

Insights

Financial Analyst

TL;DR: Capex-heavy expansion; long-term upside, near-term cash & execution risk—overall neutral.

The land-use grant secures strategic coastal real estate for 50 years at a modest RMB 17.57 m, a positive given scarce industrial plots in Zhejiang. However, the RMB 80 m construction price plus >RMB 17 m advances pushes aggregate capex to ~35-40% of FY-23 revenue, potentially stressing liquidity unless financed by debt or equity. Absence of funding details limits visibility. The 2027 completion horizon delays earnings contribution, and penalties could arise if milestones slip. Overall, the disclosure is impactful but balanced: it lays groundwork for capacity growth yet elevates financial and project-delivery risk.

Industrial Project Specialist

TL;DR: Site secured; design-build deal signed; success hinges on regulatory clearance and contractor performance.

Obtaining integrated land-and-sea rights simplifies permitting and allows vertical logistics via seaborne input/output, improving future cost structure. The preliminary agreement with Zhongxia sets clear quality and penalty mechanisms, a best practice in PRC industrial builds. Still, translation is pending, commencement date undecided, and Longwan District enforces stringent environmental rules—any deviation can halt works and void the grant. Until final EPC terms and financing are disclosed, the initiative carries moderate but manageable risk.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2024

Commission File Number: 001-41568

Erayak Power Solution Group Inc.

No. 528, 4th Avenue

Binhai Industrial Park

Wenzhou, Zhejiang Province

People’s Republic of China 325025

+86-577-86829999

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒   Form 40-F ☐

On February 19, 2025, Ruike Electronics (Wenzhou) Co., Ltd. (“Ruike”), the wholly owned subsidiary of Erayak Power Solution Group Inc. (“Erayak” or the “Company”), entered into a State-Owned Sea Area and Construction Land Use Rights Grant Contract with the Wenzhou Longwan District Natural Resources and Planning Bureau. This agreement grants Ruike the rights to use a designated parcel of coastal and land area located in Longwan District, Wenzhou, for industrial development purposes. These usage rights are granted for a fixed term of 50 years, and are subject to government planning, environmental, and construction regulations.

The granted site will be used for the construction of a generator automation plant and intelligent warehousing system, aimed at significantly improving the Company’s production efficiency and delivery timelines. The project is expected to be completed within 2027.

In March 2025, Ruike paid a total consideration of RMB 17.57 million for these usage rights, in multiple tranches. The land and sea area granted must be developed and used in strict compliance with zoning and regulatory approvals. Delays in payment or deviation from permitted use may result in penalties or termination of the rights. Ruike is also required to complete formal registration of the granted rights with the appropriate authorities to solidify legal title.

Subsequently, on March 25, 2025, Ruike entered into a preliminary Construction Project Agreement with Zhongxia Construction Co., Ltd. (“Zhongxia”) for the design and construction of its industrial facility. Under the agreement, the provisional total construction contract price is RMB 80 million. As of the date hereof, Ruike has made approximately RMB 17.2 million in advance payments to Zhongxia, at a commencement date yet to be determined by the Company.

The construction agreement outlines key milestones, payment schedules, quality control standards, liability for delays or defects, safety obligations, and termination provisions. Zhongxia is responsible for delivering the project in accordance with approved plans, and must meet performance guarantees under the agreed scope and timeline.

Together, these two contracts form the foundation for Ruike’s industrial development project in Wenzhou and represent significant capital commitments by the Company in infrastructure and land acquisition.

The State-Owned Sea Area and Construction Land Use Rights Grant Contract between Wenzhou Longwan District Natural Resources and Planning Bureau and Ruike Electronics (Wenzhou) Co., Ltd., dated February 19, 2025is attached to this report as Exhibit 10.1. The preliminary Construction Project Agreement referenced herein is currently undergoing translation and is simultaneously being supplemented to finalize the full scope of construction work. The full English translation will be furnished as an exhibit to an amendment to the current form or a separate Form 6-K to be submitted by the Company upon completion of the translation process.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Erayak Power Solution Group Inc
Date: July 25, 2025	By:	/s/ Lingyi Kong
	Name:	Lingyi Kong
	Title:	Chief Executive Officer

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Exhibit Index

Exhibit No.		Description
10.1		English Translation of State-Owned Sea Area and Construction Land Use Rights Grant Contract between Wenzhou Longwan District Natural Resources and Planning Bureau and Ruike Electronics (Wenzhou) Co., Ltd., dated February 19, 2025

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FAQ

What land rights did Erayak (RAYA) acquire in the July 2024 Form 6-K?

Ruike obtained 50-year state-owned sea-area and land-use rights in Wenzhou for RMB 17.57 m.

How much will the new Erayak plant construction cost?

The preliminary contract with Zhongxia Construction sets a provisional price of RMB 80 m.

When is the Erayak expansion project expected to be completed?

The generator automation plant and intelligent warehouse are targeted for completion by 2027.

What payments has Erayak made toward construction so far?

Ruike has advanced approximately RMB 17.2 m to Zhongxia Construction.

What risks are associated with the land-use grant?

Failure to follow zoning, delays in payment, or deviation from permitted use may lead to penalties or termination of the rights.

Will the full construction agreement be disclosed?

Yes. Erayak will furnish an English translation as an exhibit to an amended or new Form 6-K once translation is complete.