Shengu Group's shares plunge 67% from peak, P/E still above 100x, ten times that of rival Shangu

By 21st Century Business Herald Reporter Ling Chen

The A-share market’s “new stock frenzy” has once again played out with a fresh script.

On September 24, Shengu Group (601091.SH) closed at 27.25 yuan per share, hitting the daily downside limit. Compared to the intraday high of 82.59 yuan recorded on September 18, the stock had retreated approximately 67% in just a few trading days. Even so, its price-to-earnings (P/E) ratio based on 2025 profit data still stood at a lofty 103 times.

Just a week earlier, the company presented a very different picture. After listing on the Shanghai Stock Exchange on September 17, Shengu Group surged for two consecutive trading days. On September 18, it hit an intraday high of 82.59 yuan per share, closing at 57.77 yuan—a gain of 177.74%—giving it a total market capitalization of 179.665 billion yuan.

A traditional heavy equipment manufacturer had thus rapidly joined the ranks of companies with a market cap exceeding 100 billion yuan. Due to the excessive short-term gains, the Shanghai Stock Exchange subsequently imposed regulatory measures, including suspending account trading, on certain investors engaged in abnormal trading behavior.

The frenzy surrounding Shengu Group also unexpectedly cast a spotlight on another company thousands of kilometers away, adding further intrigue to the new stock speculation.

On the second day of Shengu’s listing, Shangu Power (601369.SH) closed at 9.02 yuan per share, up 7.38%.

This was no coincidence. In Shengu’s prospectus, “Shangu Power” appears repeatedly as a benchmark for comparison. In the large heavy-duty centrifugal compressor market, Shengu, Shangu, and Man Turbo have long competed side by side.

One is based in Shenyang, the other in Xi’an. One has just entered the capital market, while the other has been listed for 16 years.

For decades, these two old rivals in the large turbomachinery field have crossed paths in the industrial market. It was only with Shengu’s listing that they truly stood on the same capital market playing field—yet one boasts a P/E ratio of over 100, while the other sits at just over 20. At its peak, Shengu’s total market capitalization was more than ten times that of Shangu.

This raises a compelling question: What are the similarities and differences between these two companies that could lead to such a stark valuation gap?

16 Years Late: Shengu Finally Joins Shangu on the Same Stage

The intersection of Shengu and Shangu predates their stock codes by many years. Large compressors are often called the “heart” of industrial installations such as petrochemical and metallurgical plants. For a long time, this high-end equipment has been a key battleground for domestic substitution in China’s major equipment sector.

According to data from Frost & Sullivan cited in Shengu’s prospectus, in 2024, Shengu Group’s sales in China’s large heavy-duty centrifugal compressor market reached 5.54 billion yuan, accounting for 51.0% of the market and ranking first. Siemens Energy and Man Turbo held 12.7% and 5.5% shares, respectively, while Shangu Power’s related sales were 530 million yuan, representing a 4.9% share.

It is worth noting that Siemens Energy and Man Turbo are international giants with businesses spanning multiple energy equipment sectors, making their business structures and market environments quite different from Shengu’s.

Shangu Power, however, is in the same A-share market as Shengu Group. Both have revenues around 10 billion yuan, both focus on large compressors and turbomachinery as their core business, and both serve downstream sectors such as petrochemicals, coal chemicals, and metallurgy.

This explains why Shangu Power became one of the most direct capital market benchmarks for Shengu Group during its IPO.

Shengu’s main products include centrifugal compressors, reciprocating compressors, and nuclear pumps, serving the petroleum, chemical, power, natural gas, and new energy sectors.

Shangu, on the other hand, started with axial compressors, centrifugal compressors, and energy recovery devices. The two companies have long overlapped in large-scale industrial applications such as energy and chemicals.

But their entry into the capital market was separated by 16 years.

In 2010, Shangu Power listed on the Shanghai Stock Exchange. For a long time afterward, it was difficult to find a highly comparable listed company in the large compressor sector in A-shares—until Shengu finally listed in September 2026.

For the first time, the capital market simultaneously assigned a price tag to these two old rivals.

Both Earn ~700 Million Yuan Annually, But Two “Industrial Hearts” Are No Longer the Same Business

Placing Shengu and Shangu on the same financial statement reveals a striking contrast.

In 2025, Shengu Group achieved operating revenue of 10.122 billion yuan and net profit attributable to the parent company of 739 million yuan. During the same period, Shangu Power reported operating revenue of 9.422 billion yuan and net profit attributable to the parent of 748 million yuan.

In other words, based on 2025 figures, both companies have revenues around 10 billion yuan and net profits at roughly the same level.

However, a closer look at their revenue structures shows that the two are no longer in exactly the same business.

Shengu Group has a more pronounced equipment manufacturing profile. Its business revolves around energy and chemical equipment manufacturing, industrial services, and strategic emerging industries. Centrifugal compressors are its core product, with extensions into reciprocating compressors, nuclear pumps, and related parts and services.

Shangu Power, which listed much earlier, has already moved further along.

In the first half of 2026, Shangu Power reported operating revenue of 4.988 billion yuan, up 2.44% year-on-year, and net profit attributable to the parent of 331 million yuan, down 19.94% year-on-year. Within this, revenue from energy conversion equipment was approximately 1.729 billion yuan, industrial services revenue was about 995 million yuan, and energy infrastructure operations revenue was around 2.255 billion yuan.

In other words, traditional equipment manufacturing now accounts for less than 40% of the company’s total revenue. This reflects Shangu’s long-standing efforts to move beyond being a pure equipment manufacturer.

From selling a single compressor, to providing engineering and lifecycle services, to directly participating in energy infrastructure operations, Shangu has been extending its value chain downstream. In 2025, the company launched its third round of strategic transformation, focusing on its core business, deepening its shift toward service-oriented manufacturing, and leveraging high-end core manufacturing, capital, and digital intelligence to drive the transformation.

Thus, the comparison between the two companies after Shengu’s listing goes beyond valuation. A more pertinent question is: To what extent has Shangu Power, which started as a large turbomachinery manufacturer, now broken through the boundaries of a traditional equipment maker?

Shangu’s transformation also provides a real-world reference for Shengu Group. For Shengu, which faces similar growth limits in traditional equipment manufacturing, Shangu’s path—along with its successes and setbacks—offers valuable insights into how to extend core equipment capabilities into services, operations, and emerging energy scenarios.

From Petrochemicals to Energy Storage: Old Rivals Collide Again

More noteworthy than short-term valuations is where the next competition between Shengu Group and Shangu Power will unfold.

For decades, the two companies’ rivalry centered on large-scale industrial applications such as petrochemicals, coal chemicals, metallurgy, and air separation. But as traditional industrial equipment shifts toward green and low-carbon applications, large compressors are entering new use cases.

Shengu has already outlined these directions in its prospectus.

Beyond traditional energy and chemical equipment, the company is expanding into compressed air energy storage (CAES), hydrogen energy, offshore engineering equipment, carbon capture, utilization and storage (CCUS), and supercritical CO₂ power generation. In the CAES field, Shengu has laid out technology routes including high-temperature, medium-temperature, isothermal compression, and liquid air energy storage. It has participated in projects such as the 60MW liquid air energy storage in Golmud, Qinghai; the 300MW energy storage project of Jiangsu Guoxin; and the 300MW energy storage project in Jintan, Jiangsu.

This means the competitive boundaries for large compressor applications are being redrawn.

In the past, a compressor was typically tied to a refining, coal chemical, or steel project. Now, it might appear in a new energy storage station. The technical foundation remains the same, but the customers, projects, and imagination of the capital market are changing.

For Shangu Power, this also presents a new industrial challenge.

In the first half of 2026, its energy conversion equipment revenue was about 1.7 billion yuan, while energy infrastructure operations revenue had already exceeded 2.2 billion yuan. At the same time, the company still possesses a vast base of traditional turbomachinery technology and customers. How it leverages its traditional equipment capabilities to migrate into green energy scenarios and forms a new growth loop among equipment, services, and operations will determine how far its third strategic transformation can go.

Therefore, the significance of Shengu Group’s listing may not lie solely in a few days of volatile stock prices.

For Shangu Power, which has been listed for 16 years, the capital market now has a benchmark that is sufficiently close in core products and industrial history.

For the newly listed Shengu Group, the sharp rise above its IPO price of 4.39 yuan per share will ultimately need to be backed by orders, revenue, and profit realization.

The industrial contest between Shengu Group and Shangu Power has lasted for decades, but their valuation battle in the capital market has only just begun. Interestingly, Shangu, which entered the capital market first, now lags far behind in valuation.

Going forward, changes in their relative market capitalization positions will depend not only on shifts in their business structures and profitability but also on how the valuation logic of the A-share market evolves.