Produced by | Frontier of Entrepreneurship

Art Editor | Xing Jing

Reviewed by | Song Wen

Recently, Changzhou Huaneng Turbine Power Co., Ltd. (hereinafter referred to as "Huaneng Turbine") has filed for an IPO registration on the Beijing Stock Exchange.

The company specializes in the research, development, production, and sales of turbocharger components and complete units. Turbochargers are a key component of automotive turbocharged engine systems.

In recent years, Huaneng Turbine has seen sustained revenue growth, yet it remains highly reliant on overseas markets, with foreign sales revenue accounting for roughly 90% of its primary business income.

However, with the swift rise in market penetration of new energy vehicles, the share of fuel vehicle sales is on a downward trend. Given that Huaneng Turbine's products are not applicable to pure electric vehicles, its long-term market demand is under pressure.

It remains uncertain whether the company can successfully absorb the significantly expanded production capacity it aims to finance through this IPO.

In the automotive components sector, the front market, also known as the Original Equipment (OE) market, involves component manufacturers directly supplying vehicle manufacturing enterprises for original factory production during new vehicle manufacturing. This segment is characterized by lengthy certification cycles and strong order stability.

The aftermarket, also known as the Aftermarket (AM) market, meets the demand for parts needed for maintenance and replacement after vehicle sales, primarily catering to automotive parts traders and repair shops.

Huaneng Turbine currently focuses on the overseas automotive aftermarket, with its core business being the research, development, production, and sales of turbocharger components and complete units.

Turbochargers are reported to boost power output and enhance fuel economy without increasing engine displacement by harnessing exhaust gas energy to compress intake air. They are vital components in diesel passenger vehicles, construction machinery, agricultural equipment, and marine power devices.

Huaneng Turbine operates in the turbocharger aftermarket, mainly providing repair or replacement services for vehicle owners.

(Figure / Huaneng Turbine Prospectus)

Huaneng Turbine's entry into this market is closely tied to the founder's early career experiences.

In 1970, Zhang Jingchu began working at Wuxi County Transformer Factory as a sheet metal worker. From 1972 to 1975, he studied at Nanjing Institute of Aeronautics and subsequently devoted himself to mechanical manufacturing and aviation power for an extended period.

After graduation, Zhang Jingchu held various positions at Lehe Machinery Factory and Changzhou Lanxiang General Machinery Factory, including designer, head of the design institute, and factory director, amassing extensive technical experience.

Zhang Jingchu's wife, Pei Lamei, also studied at Nanjing Institute of Aeronautics and has years of experience at Changzhou Lanxiang General Machinery Factory.

In 2002, Zhang Jingchu and his wife jointly established Huaneng Limited, the forerunner of Huaneng Turbine, which was converted into a joint-stock company in 2013.

Currently, Zhang Jingchu serves as the chairman and technical lead of Huaneng Turbine, while Pei Lamei is the company's technical and strategic advisor.

As the company has expanded, members of Zhang Jingchu's family have become involved in its operations, including his daughters Zhang Jingxuan and Zhang Jinglin. Zhang Jingxuan heads the marketing department, while Zhang Jinglin serves as the board secretary.

Furthermore, Zhang Jingxuan's husband, Tang Yunbing, is a director and general manager of Huaneng Turbine.

As of the prospectus signing date, Zhang Jingchu, Pei Lamei, Zhang Jingxuan, Zhang Jinglin, and Tang Yunbing collectively hold 88.89% of the company's shares directly and indirectly, effectively controlling 91.31% of the voting rights, making them the actual controllers.

Given the high concentration of equity, Huaneng Turbine has encountered financial irregularities such as cash receipts and payments, related-party collections on behalf of customers, and third-party payments.

Moreover, in 2023, the controlling shareholder, Yiyi Industrial, received dividends from Huaneng Turbine for the fiscal year 2022, totaling RMB 74.6667 million. It is reported that Yiyi Industrial is wholly owned by Zhang Jingchu, Pei Lamei, Zhang Jingxuan, and Zhang Jinglin.

(Figure / Huaneng Turbine Inquiry Response)

After receiving the dividend funds, Yiyi Industrial utilized them for purchasing financial products, lending to actual controllers, repaying loans, etc.

In the future, issues regarding the financial management standardization of Huaneng Turbine and the protection of minority shareholders' rights will warrant continued attention.

During the early stages of the turbocharger aftermarket, global front-mounted turbocharger manufacturing giants held sway, while domestic automotive component suppliers generally adopted a "processing according to drawings" model due to their incomplete mastery of core product technologies.

With the rapid development of the automotive market, a few companies with product development and production capabilities entered the turbocharger aftermarket competition. Huaneng Turbine is transitioning from contract manufacturing to independent brand operations.

The company initially operated under the OEM (Original Equipment Manufacturing) model but gradually shifted to an operational structure centered on ODM (Original Design Manufacturing) and OBM (Original Brand Manufacturing), supplemented by OEM operations.

Under the OBM model, the company markets its products under its proprietary brand "E&ETURBOS." Additionally, since 2014, Huaneng Turbine has been developing ODM customer channels. During the reporting period, the company had 54 ODM cooperation customers with sales exceeding RMB 1 million.

Currently, Huaneng Turbine primarily offers two major product categories: the first includes turbocharger components such as cartridges, turbines, impellers, and other parts; the second comprises complete turbocharger units, mainly used in passenger and commercial vehicles.

From 2023 to 2025 (hereinafter referred to as the "reporting period"), Huaneng Turbine's operating revenues were RMB 352 million, RMB 426 million, and RMB 560 million, representing year-over-year growth of 22.16%, 21.10%, and 31.20%, respectively.

During the same period, the company's net profit attributable to shareholders was RMB 92.1103 million, RMB 161 million, and RMB 178 million, representing year-over-year growth of -19.94%, 74.92%, and 10.64%, respectively.

(Figure / Wind (Unit: RMB 100 million))

Notably, the company's revenue primarily comes from overseas markets, with exports mainly to Europe and supplemented by other countries and regions.

During the reporting period, Huaneng Turbine's sales revenue from overseas markets was RMB 327 million, RMB 381 million, and RMB 522 million, accounting for 92.94%, 89.28%, and 93.25% of its operating revenue, respectively, indicating a heavy reliance on overseas markets.

Long-term deep involvement in overseas markets also exposes the company to certain exchange rate fluctuation risks.

During the reporting period, the company's exchange gains and losses were -RMB 6.9331 million, -RMB 10.6416 million, and RMB 8.0183 million, respectively. In December 2026, as the USD exchange rate weakened, the company incurred an exchange loss of RMB 14.2383 million, adversely affecting its current profits.

The gross profit margin of the company's primary business is already under pressure. During the reporting period, Huaneng Turbine's gross profit margin for its primary business was 45.50%, 43.79%, and 42.88%, respectively, showing an overall declining trend.

(Figure / Huaneng Turbine Prospectus)

Among them, the gross profit margin for overseas business decreased from 45.20% in 2023 to 43.06% in 2025, while the gross profit margin for domestic business declined from 50.05% to 40.31%.

(Figure / Huaneng Turbine Prospectus)

In terms of specific products, during the reporting period, the gross profit margin for turbocharger components was 46.02%, 45.35%, and 45.59%, respectively, showing a slight overall decline.

The rapidly growing complete unit business has not seen a corresponding improvement in profitability, with its gross profit margin decreasing from 39.08% in 2023 to 31.85% in 2025, a cumulative decline of 7.23 percentage points over three years.

(Figure / Huaneng Turbine Prospectus)

Regarding the significant decline in the gross profit margin for complete turbocharger units, the company explained in its prospectus that it has appropriately reduced the selling price of complete units to enhance market competitiveness and actively expand the market.

During the reporting period, the average selling price of complete units was RMB 1,066.56/unit, RMB 1,020.95/unit, and RMB 1,029.33/unit, respectively. Although the average selling price of complete units rebounded in 2025, it had not yet returned to the 2023 level.

(Figure / Huaneng Turbine Prospectus)

While the strategy of "exchanging price for volume" for complete turbocharger units has boosted the company's overall revenue, it has also squeezed profit margins to some extent.

For Huaneng Turbine, balancing market expansion with profitability will be crucial for its future development.

Currently, the front-mounted turbocharger market is primarily dominated by companies such as Garrett, Cummins, BorgWarner, Mitsubishi Heavy Industries (MHI), and IHI, which collectively hold approximately 90% of the global turbocharger market share.

In the turbocharger aftermarket where Huaneng Turbine operates, competitors mainly consist of original equipment parts suppliers and independent aftermarket brands, with companies like Garrett and BorgWarner also possessing strong brand competitiveness.

In 2025, Huaneng Turbine's market share in the international turbocharger aftermarket was 2.77%, which is relatively low.

(Figure / Huaneng Turbine Inquiry Response)

In recent years, the automotive industry has undergone structural changes, with rapid development of new energy vehicles, including pure electric vehicles, hybrid electric vehicles, and fuel cell vehicles. From 2020 to 2026, the proportion of global pure electric vehicle sales in global light-duty vehicle sales is expected to increase from 2.80% to 18.30%, with a projected reach of 43.60% by 2035.

More importantly, due to the rapid development of new energy vehicles, fuel vehicle sales are declining. It is expected that by 2026, the proportion of global fuel vehicle sales in global light-duty vehicle sales will further decrease to 54.70%.

Huaneng Turbine's product portfolio is relatively singular, primarily focused on turbocharger-related categories, which are mainly suitable for fuel vehicles. Although they can be used in some hybrid and hydrogen fuel cell vehicle applications, they cannot be applied to pure electric vehicles, limiting future growth potential.

Through this IPO, the company plans to allocate some of the proceeds to a production base project for turbochargers and their core components. Upon completion, Huaneng Turbine's production capacity for complete turbocharger units, cartridges, impellers, and turbines is expected to increase significantly by 249.79%, 110.96%, 138.30%, and 148.83%, respectively.

(Figure / Shetu.com, based on the VRF protocol)

However, given the declining proportion of fuel vehicle sales, Huaneng Turbine's ability to successfully absorb this additional production capacity has been questioned by regulatory authorities.

In the future, reducing reliance on the singular category of turbochargers and finding a second growth curve will be crucial for Huaneng Turbine to hedge against the risk of declining fuel vehicle sales and unlock revenue growth potential.

Huaneng Turbine also stated in its prospectus that it plans to actively explore opportunities in the front-mounted turbocharger business, as well as in the fields of new energy hybrid vehicles and hydrogen fuel cell vehicles.

Entering new fields naturally requires upfront investment in research and development innovation. However, Huaneng Turbine's R&D expenditure ratio does not compare favorably with that of its industry peers.

During the reporting period, the company's R&D expenses were RMB 11.8921 million, RMB 14.8222 million, and RMB 18.7818 million, accounting for 3.38%, 3.48%, and 3.36% of its operating revenue, respectively, which were lower than the average R&D expenditure ratios of comparable companies in the same period: 4.86%, 4.66%, and 4.74%.

*Note: The featured image accompanying this article is sourced from Shetuwang, adhering to the VRF protocol (AI-generated digital content).