Analysis of the Strong Performance of Shaoyang Hydraulics (301079): Entering the Commercial Space Track via Acquisition of Xinshenghangrui

Shaoyang Hydraulics (301079) entered the hot stock pool on January 7, 2026, with its strong performance mainly driven by a major asset restructuring event – the company plans to acquire 100% equity of Xinshenghangrui for RMB 600 million, and the restructuring application was accepted by the Shenzhen Stock Exchange on January 5, 2025 [1][2]. Xinshenghangrui owns core grid fin technology for recoverable rockets and three military industry certifications, and has secured a RMB 1.2 billion guaranteed order from Aviation Industry Corporation of China (AVIC) for 2025-2027. It has made profit commitments of no less than RMB 30 million, RMB 35 million, RMB 45 million, and RMB 55 million for 2025-2028 respectively [1]. Supported by the solid fundamentals of a 27.33% year-on-year revenue growth in 2024 and held orders exceeding RMB 1.5 billion [4], the market has recognized the short-term imagination space of the company entering the hot commercial space track. Attention should be paid to risk factors such as the restructuring approval process, changes in controlling shareholders’ share pledges, and whether positive expectations have been fully reflected.

The core driver of Shaoyang Hydraulics’ current strong performance is the substantive progress made in the major asset restructuring of acquiring Xinshenghangrui. On January 5, 2025, the Shenzhen Stock Exchange officially accepted the company’s application documents for issuing shares and paying cash to purchase assets, raising supporting funds, and connected transactions [2], marking that this RMB 600 million acquisition has entered the critical review stage. The shareholders’ meeting reviewed and approved the acquisition on December 26, 2025 [3], laying an internal governance foundation for subsequent promotion.

From the perspective of the target asset value, Xinshenghangrui has significant scarcity. The company focuses on high-end forging and casting parts for aerospace, and owns grid fin technology – a core component for precise recovery of recoverable rockets, with extremely high technical barriers that only a few companies worldwide can break through [1]. More importantly, Xinshenghangrui holds three military industry certifications, and is a qualified supplier to leading domestic and foreign enterprises such as AVIC, Aero Engine Corporation of China (AECC), General Electric, and Siemens [1]. Its military industry qualifications constitute a high entry barrier.

In terms of profit commitments, Xinshenghangrui promises that its net profit will not be less than RMB 30 million, RMB 35 million, RMB 45 million, and RMB 55 million for 2025-2028 respectively [1], and has locked in a RMB 1.2 billion guaranteed order from AVIC for 2025-2027, providing high certainty for future performance. If the acquisition is completed, the proportion of Shaoyang Hydraulics’ military business revenue is expected to exceed 30% in 2026 [1], and the company will officially transform from a traditional hydraulic equipment manufacturer to a dual-drive enterprise of “hydraulic equipment + commercial space”.

Although restructuring expectations are a short-term stock price catalyst, the fundamentals of the company’s original business also provide solid support. According to the 2024 annual report data, the company achieved operating revenue of RMB 351 million, a year-on-year increase of 27.33%, showing good growth potential [4]. The sales volume of hydraulic pumps reached 28,962 units, a year-on-year increase of 15.83%; the sales volume of hydraulic cylinders reached 18,503 units, a year-on-year increase of 48.49% [4], with sales of core products rising across the board.

In terms of held orders, the company’s new orders in 2024 increased by 45% year-on-year, with held orders exceeding RMB 1.5 billion, and production schedules have been extended to 2026 [1]. This order structure indicates that the company’s business boom is at a high level, and future revenue growth has high certainty. In terms of new products, the SY-A11V hydraulic pump and SY-A6VM hydraulic motor have been put into mass application [4], and the product matrix is continuously enriched, providing new momentum for seizing market share.

It should be noted that the company’s net profit attributable to shareholders of listed companies in 2024 was RMB 6.3966 million, a year-on-year decrease of 2.76% [4]. The divergence between net profit growth rate and revenue growth rate is mainly due to increased depreciation from new capacity expansion projects and increased provision for bad debt reserves. These factors are phased impacts, and with the improvement of capacity utilization and the completion of acquisition integration, the subsequent profitability is expected to improve.

The company disclosed a controlling shareholder’s share pledge announcement on January 6, 2026. Su Wuhong, the controlling shareholder, actual controller, and chairman, pledged 1.5 million shares, accounting for 4.56% of his held shares and 1.38% of the total share capital. The pledgee is Changsha Branch of Huaxia Bank Co., Ltd., and the pledge is for personal capital needs, with a term from January 6, 2026 to January 6, 2031 [5]. After the completion of this pledge, the cumulative pledged shares reached 4.7 million shares, accounting for 4.31% of the total share capital [5].

From the perspective of the pledge ratio and term, this pledge is a normal financing activity: the ratio is low, it involves non-restricted shares, it is not a supplementary pledge, and the maturity date is as long as 5 years, indicating that it is not a forced pledge due to capital shortage. However, as a risk factor, subsequent changes still need to be continuously tracked, especially during the critical window period of restructuring, the stability of the controlling shareholder’s equity has an important impact on market confidence.

Shaoyang Hydraulics’ entry into the commercial space track through the acquisition of Xinshenghangrui has far-reaching significance for its strategic layout. With the maturity of recoverable rocket technology and the rapid development of the commercial space industry, the demand for grid fins, as a core component for precise recovery, will continue to grow. Xinshenghangrui’s technological monopoly in this field has built a significant first-mover advantage for Shaoyang Hydraulics.

From the perspective of industrial chain synergy, Xinshenghangrui’s forging and casting business has a high degree of synergy with Shaoyang Hydraulics’ hydraulic system business. The hydraulic system is a key link in rocket launch and recovery control. Shaoyang Hydraulics’ hydraulic device for mobile launch vehicles has achieved stable operation in extreme environments from -40℃ to 80℃ [1], and is the exclusive supplier of hydraulic systems for the Type 055 destroyer (with a single set value exceeding RMB 5 million) [1], verifying its technical strength. After the acquisition is completed, the two business segments are expected to form a complete solution capability of “forging and casting parts + hydraulic systems”.

It is worth noting that the gross profit margin of Xinshenghangrui’s military business is about 50%, which is about 30 percentage points higher than that of Shaoyang Hydraulics’ original civilian business [1]. If the acquisition is completed and business integration is realized, the company’s overall gross profit margin and net profit margin are expected to increase significantly. At the same time, the order stability and payment collection quality of military business are usually better than those of civilian business, which will further improve the company’s cash flow status and asset quality.

From the perspective of revenue structure evolution, the proportion of military business revenue is expected to reach 30% in 2026 [1], and the company will transform from a pure hydraulic equipment company to a high-end equipment manufacturer with military attributes. This transformation will reshape the market’s valuation logic for the company, and the military and commercial space concepts are expected to obtain higher valuation premiums.

In addition to military and commercial space, the company has also made breakthroughs in the deep-sea equipment field. Its deep-sea robot hydraulic control system has broken foreign monopolies [1]. With the development of industries such as deep-sea oil and gas development and seabed mining, the deep-sea equipment hydraulic system will become a new growth pole for the company. This diversified business layout effectively disperses the cyclical risks of a single industry and enhances the company’s ability to resist macroeconomic fluctuations.

: The acquisition of Xinshenghangrui still needs to be approved by the Shenzhen Stock Exchange, and there is a possibility that the approval progress may not meet expectations or be subject to additional conditions. After the acquisition is completed, there are also uncertainties regarding the integration effect of the new business and the original business, as well as the fulfillment of profit commitments.

: Restructuring expectations and commercial space concepts may have been partially reflected in the current stock price. If there is a lack of stronger catalyst support in the future, the stock price may face pullback pressure. Investors need to pay attention to the adjustment risk after positive expectations are realized.

: Although the current pledge ratio is low (cumulative 4.31%), it is still necessary to continuously pay attention to whether there will be new pledges or an increase in the pledge ratio in the future, especially during periods of large stock price fluctuations.

: The overall performance of the broader market and sector sentiment will affect the company’s stock price. If market risk appetite declines or liquidity tightens, the pullback range of theme stocks may be relatively large.

: The restructuring has just been accepted by the Shenzhen Stock Exchange, and market attention is at a high level. The commercial space concept remains hot, and the expectation of military order fulfillment continues to ferment, so the stock price still has upward momentum in the short term.

: The 2025 annual report and the 2026 first quarterly report will test the company’s actual performance. If the revenue and profit growth rates meet or exceed expectations, it is expected to drive the stock price further upward.

: The domestic substitution market for hydraulic parts with a scale of RMB 60 billion has broad prospects. The industrialization and large-scale development of commercial space brings continuous incremental demand. Driven by multiple sectors including military, deep-sea equipment, and new energy, the company has a high long-term growth ceiling.

: Closely follow the review progress of the restructuring by the Shenzhen Stock Exchange, which is the most critical variable affecting the stock price in the short term. The review period is expected to be 1-3 months, and progress such as regulatory inquiries or supplementary materials needs to be monitored during this period.

: Track the order execution status of Xinshenghangrui and its 2025 performance. If the actual net profit is close to or exceeds the profit commitment, it will verify the quality of the target asset and the synergy effect of the acquisition.

: Pay attention to changes in the controlling shareholder’s equity, the lifting time of restricted shares, and changes in institutional holdings. These factors may affect the stock price trajectory in the medium and long term.

The current strong performance of Shaoyang Hydraulics (301079) has strong dual support from event-driven factors and fundamentals. The company plans to acquire 100% equity of Xinshenghangrui for RMB 600 million to enter the hot commercial space track. The target asset has core grid fin technology, three military industry certifications, and a RMB 1.2 billion guaranteed order, with significant imagination space [1][2]. Coupled with the solid fundamentals of a 27.33% year-on-year revenue growth in 2024 and held orders exceeding RMB 1.5 billion [4], it is reasonable for the company to enter the hot stock pool in the short term.

From the perspective of catalyst strength, the restructuring has just been accepted, market attention is high, the commercial space concept remains hot, and the expectation of military order fulfillment continues to catalyze, resulting in strong short-term momentum. From the perspective of risk factors, there is uncertainty in the acquisition approval, positive expectations may have been partially reflected in the stock price, and although the controlling shareholder’s pledge ratio is low, it still needs attention [5].

Comprehensive judgment shows that the company’s current strong performance has strong support from fundamentals and event-driven factors. The main logic is that the acquisition of Xinshenghangrui enables it to enter the hot commercial space track, with great imagination space. It has strong short-term momentum, but attention should be paid to the risk that positive expectations have been partially reflected. It is recommended to pay attention to the restructuring approval progress and subsequent order fulfillment, and may appropriately pay attention to the stock during pullbacks.

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[0] Jinling Analysis Database

[1] East Money Wealth Account - RMB 600 Million Merger & Restructuring + Grid Fin Monopoly

[2] Sina Finance - Shaoyang Hydraulics’ Major Asset Restructuring Application Accepted by Shenzhen Stock Exchange

[3] East Money Wealth Account - Important Announcement of Individual Stock

[4] CNINFO - Shaoyang Hydraulics 2024 Annual Report

[5] CFI - Shaoyang Hydraulics’ Controlling Shareholder Pledge Announcement