China Zhongji Investment completes a targeted investment in Tenglong Co., Ltd.'s private placement, strengthening its layout in green industries.
Recently, China Zhongji Investment completed a targeted investment in Changzhou Tenglong Auto Parts Co., Ltd. (referred to as "Tenglong").
Established in 2005 and listed on the main board market in 2015, Tenglong is a leading domestic auto parts manufacturer focusing on the research, development, production, and sales of auto parts in the field of energy conservation and environmental protection. Relying on its three major business segments—automotive thermal management systems, automotive engine energy-saving and environmental protection systems, and hydrogen fuel cell systems—the company provides customers with overall solutions such as energy-saving and environmentally friendly auto parts development and energy-saving and environmentally friendly technology services. Its products are widely used in traditional engine vehicles, hybrid vehicles, pure electric vehicles, and hydrogen energy vehicles.
The company's automotive thermal management system business benefits from the continuously increasing penetration rate of new energy vehicles, with a significant increase in the value of thermal management per vehicle. The unit value of air conditioning pipelines, hard pipes, and accessories sold by the company in new energy vehicles has increased by about three times. At the same time, the company has basically mastered the relevant technology of the new generation of carbon dioxide refrigerants, and the unit value is expected to further increase in the future. Combined with the significant growth of new energy vehicles and the rapid increase in value, the company's automotive thermal management system business is expected to achieve sustained high growth.
The company's automotive engine energy-saving and environmental protection system business mainly focuses on diesel engine EGR, meeting the energy-saving and emission reduction needs of heavy-duty vehicles. With the implementation of the National VI standard, diesel engine EGR is expected to experience rapid growth from 2021 to 2025, with the penetration rate expected to increase from about 40% to over 90%, releasing a large amount of market demand. As a major domestic supplier of diesel engine EGR, the company's engine energy-saving and environmental protection system business is expected to achieve stable growth.
In addition, the company is the largest shareholder of Xinyuan Power Co., Ltd. (referred to as "Xinyuan Power"), laying out the hydrogen energy fuel cell field. Hydrogen energy is a core component of the new energy system, and hydrogen fuel cells are an important application scenario for hydrogen energy. Against the backdrop of global consensus on "double carbon" goals and the establishment of specific targets and incentive policies, the hydrogen energy and fuel cell industry has entered a period of rapid development opportunities.
Tan Runzhan, Partner and Managing Director of China Zhongji Investment, said that Tenglong's various businesses comply with the national green and clean development strategy and have good development opportunities. This fundraising project is mainly used to expand the production capacity of the Poland factory and supporting R&D center, which will enhance the company's ability to obtain European orders and further enhance its profitability. In addition, Xinyuan Power is one of the earliest domestic fuel cell leading enterprises with the deepest independent technological accumulation and comprehensive products, which will provide continuous momentum for the company's long-term development and performance growth. The company's increased investment in various new energy products and businesses fully reflects the company's social responsibility, while its performance is expected to increase significantly, bringing good returns to investors.
