Fusda, a major manufacturer of oxygen generators, is about to go public. What is the company’s future development outlook?

Over the past five years, the company’s compound annual growth rate (CAGR) of net profit attributable to shareholders reached 30.11%, outpacing revenue growth and indicating continuous improvement in profitability. However, profit growth has exhibited volatility—for instance, net profit declined from RMB 160 million to RMB 141 million in 2022 before rebounding. This volatility stems from the project-based nature of its business, yet the overall trend remains upward; Fusda is not a highly cyclical stock, and its operational stability is relatively strong. Regarding internal operational risks, the top five customers accounted for 34.27% of total annual sales revenue in 2024—a reasonable concentration level with no severe reliance on any single customer. Similarly, purchases from the top five suppliers represented only 18.25% of total annual procurement, reflecting sound supply-chain diversification. Fusda’s products are exported to Southeast Asia, the Middle East, Africa, Central Asia, and Latin America, demonstrating geographically diversified sales and avoiding overreliance on any single market. Concerning external environmental risks, the company is significantly affected by macroeconomic cycles—especially investment cycles in the energy and chemical industries. Commodity price fluctuations can influence downstream customers’ investment willingness. On policy regulation, Fusda benefits from national “dual-carbon” policies driving energy-saving retrofits, as well as government support for equipment upgrades. However, international trade frictions may pose some risk to overseas operations. Overall, the company demonstrates solid operational stability. Although exposed to industry cyclicality, it has enhanced its resilience through balanced domestic and international market development, product-structure optimization, and new-business expansion. In Q1 2025, its net profit attributable to shareholders surged 76.26% year-on-year, underscoring robust growth momentum even amid current macroeconomic conditions. Operational Stability Score: 7.5 / 10. The company’s fundamentals are sound and growth drivers ample, though attention must be paid to how industry cyclicality impacts performance. III. Pricing Power and Types of Pricing Power Fusda’s pricing power primarily derives from technological and cost advantages. The company holds 72 patents—including 18 invention patents—with core technologies comprehensively covering key deep-cryogenic equipment domains such as air separation units (ASUs), natural gas processing and liquefaction, chemical cold boxes, and skid-mounted modular systems. Its products have achieved domestic advanced standards in technology and quality, with only minor technical gaps relative to global peers—and possess certain price advantages. Notably, Fusda has secured orders for two 50,000 Nm³/h-class large-scale ASU turnkey systems, highlighting its competitiveness in high-end markets. Fusda’s pricing power arises from a combination of types (b) and (c): leveraging technological capability and economies of scale to gain bargaining power within the industrial chain. First, its accumulated expertise in deep-cryogenic equipment forms a differentiated competitive edge; second, large-scale production and supply-chain management enable cost reduction, allowing Fusda to stand out internationally via superior cost-performance ratios. For example, its medium-to-large ASUs and LNG plants are priced lower than those of international peers, conferring a distinct cost advantage in global competition. In terms of customer positioning, Fusda serves industrial enterprises in energy & chemicals, metallurgy, and industrial gases. These clients prioritize equipment performance, reliability, and total lifecycle cost—not price alone. By offering customized solutions, timely technical support, and after-sales service, Fusda strengthens customer stickiness.

Map of unexpectedly strong industrial equipment sectors: tracking the air separation equipment industry chain—Fusda, Hangyang Co., Ltd., and Shudao Equipment

Q1 2025: Revenue amounted to RMB 594 million, up 69.04% year-on-year and down 22.29% quarter-on-quarter; net profit attributable to shareholders totaled RMB 116 million, up 76.26% year-on-year and up 116.05% quarter-on-quarter. The faster growth in net profit versus revenue was driven primarily by increased sales volume, a higher share of overseas-project revenue, and a 1.72-percentage-point year-on-year increase in gross margin. Chart: Net Profit Attributable to Shareholders (Unit: RMB billion, %) Hangyang Co., Ltd.—In 2024, revenue reached RMB 13.716 billion, up 3.06% year-on-year; net profit attributable to shareholders stood at RMB 922 million, down 24.15% year-on-year. In 2024, revenue from equipment sales totaled RMB 5.065 billion, up 7.22% year-on-year; revenue from gas operations totaled RMB 8.1 billion, down 1.15% year-on-year. Overall gross margin declined by approximately 2 percentage points year-on-year, mainly due to macroeconomic headwinds and sluggish liquid-gas market conditions. Q1 2025: Revenue reached RMB 3.565 billion, up 7.85% year-on-year and up 5.96% quarter-on-quarter; net profit attributable to shareholders totaled RMB 226 million, up 10.82% year-on-year and down 8.5% quarter-on-quarter. The faster growth in net profit versus revenue was primarily attributable to a 1.55-percentage-point year-on-year improvement in gross margin. In 2024, the company’s annual order intake for air separation and petrochemical equipment reached RMB 5.512 billion. It signed contracts for 22 medium-to-large ASUs—including 12 ultra-large units rated at 60,000 Nm³/h or above. Overseas contract value totaled RMB 933 million, accounting for nearly 17% of total orders; notably, key equipment for the 50,000 Nm³/h ASU project in Mexico employed Hangyang’s self-developed advanced technologies. Petrochemical equipment contract value hit a record high of RMB 841 million, with ethylene cold boxes, liquid nitrogen wash cold boxes, CO deep-cold separation units, and alkane dehydrogenation units continuing to lead domestic market share. Regarding newly signed gas investment projects: In 2024, Hangyang signed six new gas projects, adding a total oxygen production capacity of approximately 650,000 Nm³/h upon full commissioning. Projects expected to come online in 2025 include the Xuzhou Hangyang 62,000 Nm³/h, Hukou Hangyang 40,000 Nm³/h, and Jincheng Hangyang 32,000 Nm³/h ASUs. Chart: Net Profit Attributable to Shareholders (Unit: RMB billion, %) Shudao Equipment—In 2024, revenue reached RMB 862 million, up 28.9% year-on-year; net profit attributable to shareholders totaled RMB 72 million, up 121.67% year-on-year. The faster growth in net profit versus revenue stemmed mainly from a 3.16-percentage-point year-on-year increase in gross margin (driven partly by higher margins on LPG liquefaction equipment) and a debt-restructuring gain (creditor restructuring) of RMB 34 million. Q1 2025: Revenue totaled RMB 51 million, up 28.1% year-on-year and down 85.8% quarter-on-quarter; net profit attributable to shareholders was -RMB 1 million, down 116.57% year-on-year and down 101.33% quarter-on-quarter. The Q1 loss was primarily attributable to elevated administrative expenses. In 2024, new contract value for deep-cryogenic technology equipment manufacturing (including subsidiaries) totaled approximately RMB 1.071 billion, covering products such as natural gas liquefaction turnkey plants, skid-mounted LNG plants, large-scale ASUs, specialty gas separation and purification units, LNG storage tanks, and vaporizers.

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