Wolong Electric Group Co.,Ltd. surged to new heights on September 3rd, with intraday gains reaching 9.18% to hit a record high of 37.6 yuan per share.
The Shaoxing-based company recently submitted its prospectus to the Hong Kong Stock Exchange, seeking to establish an "A+H" dual-capital platform to deepen its global strategy. This 41-year-old enterprise, originating from Zhejiang Province, now boasts a market capitalization exceeding 57.5 billion yuan, with its A-share price doubling year-to-date. From humble beginnings in a rural factory to becoming a multinational conglomerate, the father-daughter leadership team of Chen Jiancheng and Chen Yanni has crafted a remarkable business legacy, now standing at the crossroads of capital expansion and business transformation as they seek to inject new momentum into emerging sectors like robotics and electric aviation through the Hong Kong listing.
**Entrepreneurial Legend: From Carpenter to Multinational Leader**
In 1984, when Shaoxing native Chen Jiancheng pooled together over 100,000 yuan with five colleagues to lease an old factory building in Haoба Village, Shangyu County, he likely never envisioned launching a four-decade business journey. This former carpenter-turned-technician-turned-entrepreneur led his team to produce their first "JW series motor" in 1985, achieving sales revenue of over 1 million yuan and profits exceeding 200,000 yuan the following year, while registering the "Wolong" trademark.
In 2002, Wolong Electric went public on the Shanghai Stock Exchange, marking its first major capital milestone. At that time, Chen Jiancheng's daughter Chen Yanni was studying at Imperial College London. After graduating in 2006, she chose not to immediately join the family business, instead gaining experience at financial institutions including JPMorgan Chase and HSBC Bank. "Training outside is different from working in your family enterprise. Externally, I'm just an ordinary person, but within Wolong, even as a frontline employee, everyone sees me as the boss," Chen Yanni once explained her career choice.
Chen Yanni officially joined Wolong Group in 2007, starting at an import-export trading subsidiary. When Wolong Electric launched its acquisition of Austria's ATB Group in 2009, she returned to headquarters as her father's translator and assistant, participating in over ten negotiation rounds until the acquisition's completion in 2011. This became crucial preparation for her succession journey. Today, Chen Yanni serves as Vice Chairman of Wolong Group's Board and Chairman of Wolong Holding Group, jointly holding approximately 38.84% of shares with her father as the controlling shareholders. Notably, current Chairman Pang Xinyuan is also Chen Yanni's husband, forming a stable core management team.
However, in 2016, Chen Yanni's leadership of Wolong Real Estate and diversification into gaming proved challenging, with unsuccessful game asset acquisitions and significant losses from gaming investments, while real estate operations also struggled. Wolong Real Estate has since been renamed Wolong New Energy, expanding into mineral trading, solar, and energy storage sectors, with original real estate business accounting for only about 10% of operations.
**Capital Strategy: From "Buy, Buy, Buy" to Strategic Consolidation**
Wolong Electric's growth story represents a textbook case of Chinese manufacturing globalization through acquisitions. Between 2011 and 2020, the company executed over ten cross-border acquisitions, incorporating Austria's ATB Group, Italy's SIR Robotics, GE's small industrial motors division in the US, while simultaneously integrating domestic peers like Midea Qingjiang Motors and Nanyang Explosion-proof Motors, building a manufacturing footprint spanning five continents with over 40 factories globally.
This expansion strategy generated significant scale effects, with compound annual revenue growth of 21.9% from 2002-2024. However, rapid expansion's side effects gradually emerged: as of Q3 2024, goodwill on books remained at 1.468 billion yuan, inventory surged to 3.617 billion yuan (22.26% of total revenue), with inventory turnover maintaining above 103 days. More severe challenges stem from business structure imbalances. In 2023-2024, the three core segments—explosion-proof, industrial, and HVAC electric drives—contributing nearly 90% of revenue, showed markedly slower growth, with explosion-proof business revenue growth plummeting from 13.15% to 0.19%, and industrial segment growth sliding from 11.78% to 0.07%.
Addressing these challenges, the company divested four new energy subsidiaries including Longeng Power and Wolong Energy Storage to related parties for 720 million yuan early this year, shedding new energy operations with cumulative losses exceeding 10 million yuan. Operating cash flow surged 100.57% year-over-year to 710 million yuan, paving the way for the Hong Kong IPO. First-half 2025 results showed revenue of 8.031 billion yuan (up 0.66% year-over-year) and net profit attributable to shareholders of 537 million yuan (up 36.76% year-over-year), with profit growth significantly outpacing revenue growth due to cost optimization and overseas market expansion.
**Can Robotics and Electric Aviation Become the Second Growth Curve?**
Facing sluggish traditional business growth, Wolong Electric pins hopes on robotics and electric aviation as frontier growth drivers. In March 2025, the company strategically invested in Zhiyuan Robotics, acquiring a 0.7394% stake, while Zhiyuan Robotics invested in Wolong's Hill Robotics subsidiary, creating deep capital and technology integration. The parties jointly established the Hangzhou Bay Embodied Intelligence Innovation Center and released industrial vertical models, with Wolong Electric supplying core components like high-torque joint modules and frameless torque motors to Zhiyuan and other companies.
However, robotics business has yet to achieve scale effects, with revenue share consistently ranging 2.5%-2.8% from 2022 to first-half 2025, while gross margins declined annually from 28.7% to 22.1%. Despite 11.2% year-over-year growth in first-half 2025, the 218 million yuan revenue scale remains modest. In electric aviation, Wolong Electric partnered with EHang to establish joint venture "Zhejiang Longfei Electric Drive Technology Co., Ltd.," focusing on electric propulsion systems for 750kg to 5,700kg certified aircraft, with solutions designed for mainstream eVTOL models.
Research indicates Wolong holds positioning advantages in aviation motor support, having developed "small, medium, large" power-class product series meeting civil aviation airworthiness standards. Financial data shows asset-to-liability ratio reached 56.4% as of June 2025, with short-term borrowings of 2.316 billion yuan and long-term debt (including current portion) of 3.78 billion yuan, combined with 105-day inventory turnover creating notable cash flow pressure.
Regarding IPO fundraising needs, Wolong Electric states proceeds will support capacity expansion, R&D enhancement, emerging sector investments, and working capital supplementation. Markets anticipate the "A+H" dual-platform achieving "1+1>2" synergy effects, but high valuations embed elevated expectations—should emerging businesses fail to deliver anticipated growth, valuation correction risks cannot be ignored.
Wolong Electric's succession story epitomizes generational transitions in Chinese family enterprises. Data shows the proportion of Chinese family businesses selecting female heirs rose significantly from 2010-2023. From Wahaha's Zong Fuli to New Hope's Liu Chang and Tongwei's Liu Shuqi, female successors are becoming prominent business leaders. As Chen Jiancheng noted: "Many young people today have high education and good English, but that alone isn't enough. Entrepreneurs emerge from the 'battlefield.'"
From a small motor factory in Zhejiang's mountains to a global explosion-proof electric drive leader, Wolong Electric's next challenge lies in maintaining core business advantages while enabling emerging sectors to truly support growth momentum. Whether the Hong Kong IPO becomes a pivotal support for this transformation battle will test Chen Yanni's team's strategic execution and capital operation capabilities.
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