Suzhou Langgao Tech Passes ChiNext IPO Review: Holds >70% Share in New Energy Mining Truck Motors, but Revenue Growth Slows and Customer Concentration Rises

Source: New Fortune Magazine

On September 22, Suzhou Langgao Motor Technology Co., Ltd. ("Langgao Technology") passed the IPO review on the ChiNext board of the Shenzhen Stock Exchange. The company plans to raise RMB 988 million in this IPO, with Huatai United Securities acting as the sponsor.

According to the prospectus, the company's revenue grew from RMB 385 million to RMB 1.447 billion over the past three years—an increase of nearly 2.8 times—while net profit attributable to parent company rose from RMB 24.70 million to RMB 131 million.

01. Supplying Sany Group, Yutong Group, and Others

Founded in 2006, Langgao Technology specializes in the R&D, production, and sale of high-performance permanent magnet synchronous motors. Its products cover new energy commercial vehicles including heavy trucks, buses, mining trucks, and construction machinery.

In the wind power and rail transit sectors, the company's main products include pitch motors, yaw motors, and braking motors for high-speed trains and subways.

In the industrial energy efficiency and automation control field, Langgao offers industrial high-efficiency permanent magnet motors, frequency converters, and dynamometers.

Key customers include well-known OEMs such as Sany Group, Yutong Group, and XCMG Group, as well as Weichai Power.

According to Frost & Sullivan, by sales volume in 2025, Langgao Technology held:

• Over 70% market share in China's new energy mining truck drive motors (ranked first)
• Approximately 28% market share in new energy heavy truck drive motors (ranked second)
• Leading positions in bus drive motors and wind power pitch motors

From 2023 to the first half of 2026 (the "reporting period"), Langgao's revenue share from new energy commercial vehicles rose from 45.41% to 65.72%, while new energy non-road mobile machinery contributed around 23%. Revenue from wind power and rail transit fell from 26.97% to 8.52%.

During the reporting period, the company sourced raw materials including stator and rotor cores, magnetic steel, enameled wire, housings, end caps, bearings, shafts, and brakes from suppliers such as JL Mag and Jintian Co.

02. Net Profit Growth Slows

In recent years, Langgao's performance has benefited from rapidly growing demand for high-performance permanent magnet synchronous motors in downstream sectors. However, as the company's revenue base expands, year-on-year growth rates are expected to moderate.

Key financial data:

| Period | Revenue (RMB) | Net Profit Attributable to Parent (RMB) | |--------|---------------|----------------------------------------| | 2023 | 385 million | 25 million | | 2024 | 768 million | 89 million | | 2025 | 1.447 billion | 131 million | | H1 2026 | 823 million | 87 million |

Gross margin: The company's gross margin on main business fluctuated during the reporting period—22.9%, 24.48%, 18.91%, and 21.81%—driven by changes in product mix and individual product margins. Langgao's gross margin was notably higher than the industry average.

R&D spending: From 2023 to 2025, R&D expenses were RMB 23.73 million, RMB 32.77 million, and RMB 56.15 million, respectively, with R&D expense ratios of 6.17%, 4.26%, and 3.88%. Comparable companies averaged 7.26%, 5.56%, and 4.43% over the same periods. Langgao attributed the difference to varying R&D stages and focus areas, stating its R&D ratio is "within a reasonable range."

Accounts receivable: The book value of accounts receivable rose steadily from RMB 138 million at end-2023 to RMB 508 million at end-H1 2026, posing increasing bad debt risk. The company acknowledged that receivables and inventory may continue to rise as operations expand.

Profitability and customer concentration:

• Gross margin fell from 24.79% in 2024 to 19.21% in 2025, a decline of 5.58 percentage points in one year.
• Gross margin on core new energy commercial vehicle motors dropped from 22.01% to 16.6%.
• Revenue from top five customers rose from 53.62% in 2023 to 72.32% in 2025, easing to 64.26% in H1 2026.
• Dependence on top customer Sany Group deepened to 27.87% in H1 2026.
• Accounts receivable grew from RMB 145 million in 2023 to RMB 375 million in 2025, reaching RMB 535 million by end-H1 2026. The cash-to-revenue ratio remained below 1 throughout the reporting period.

Capacity utilization: 110.23% in 2025, falling to 100.61% in H1 2026.

IPO fundraising plan (total: RMB 987.96 million):

| Project | Investment (RMB) | |---------|-----------------| | New Energy High-Performance Drive Motor Intelligent Manufacturing (Phase I) | 76.35 million | | Headquarters & New Energy High-Performance Drive Motor Intelligent Manufacturing (Phase II) | 577.72 million | | Annual 15,000 High-Speed Refrigeration Compressor Motors & Industrial Efficient Drive Systems | 86.29 million | | R&D Center Construction | 247.59 million |

All projects will be fully funded by the IPO proceeds. The expanded capacity will test the company's ability to absorb new production.

03. Nearly RMB 100 Million in Dividends During Reporting Period

Langgao Technology distributed cash dividends during the reporting period:

| Period | Dividend Amount (RMB) | |--------|----------------------| | 2023 | 7.50 million | | 2024 | 49.87 million | | 2025 | 25.91 million | | H1 2026 | 14.93 million | | Total | 98.21 million |

Ownership structure: As of the prospectus signing date, Langgao has no controlling shareholder. Cheng Yuping and Ren Huaixun have been joint actual controllers since the company's founding, each directly holding 38.89% of shares. Through employee stock ownership platforms (Langgao Zhongcheng, Langgao Zhonghui, Langgao Zhongxiang), they control an additional 9.97% of voting rights, giving them combined control of 87.75% of voting rights.

Angel investor Guo Tao noted that while dividends are reasonable if cash flow is sufficient, with the actual controllers holding nearly 80% of shares, most dividends flow to them personally. If the company is in an expansion phase yet distributing large dividends, it may raise concerns about "cashing out" and could affect future operating capital reserves.

Going forward, Langgao faces ongoing challenges: maintaining profitability, managing large receivables and new capacity, and reducing reliance on a single customer—especially as the penetration rate dividend in new energy commercial vehicles narrows.

04. Board Secretary Previously Worked at Sponsor Institution

Langgao Technology engaged Huatai United Securities as its sponsor for this IPO. Notably, Li Wei, the company's board secretary, previously worked at Huatai United Securities.

Background: Li Wei, born November 1988, holds a master's degree and is a non-practicing CPA. From July 2014 to October 2025, he served in the investment banking department of Huatai United Securities.

Before this IPO, Li Wei held 0.96% of Langgao's shares, making him the tenth-largest shareholder.

Sun Yuhao, senior partner at Shanghai Haihua Yongtai Law Firm, commented that Li Wei's move from the sponsor to a key position at the issuer within a short period could raise independence concerns and potentially trigger regulatory scrutiny over the sponsor's objectivity and internal controls.

Langgao Technology responded that as the company rapidly expanded, it needed to strengthen internal management, information disclosure, and internal controls, as well as enhance capital market expertise. Li Wei's decade-plus experience in investment banking made him a suitable candidate. The company stated that Li Wei had left Huatai United Securities before joining Langgao, and that the recruitment was a normal market-based talent acquisition. All parties involved strictly comply with relevant laws and regulations, and internal controls are in place to ensure independence and compliance throughout the listing process.