State-Owned Empowerment Drives Global Expansion: Company Secures Equipment Order for Indonesia’s Largest Paper Manufacturing Project

Following last week’s successful bid for the CNNC nuclear island HVAC system project valued at RMB 51.57 million, on September 24, Nanfang Ventilator Co., Ltd. (hereinafter referred to as “the Company”), in partnership with Hunan Sanjiangren Technology Co., Ltd., officially announced it had won the order for ventilation equipment for the production line workshops of the IKK Project. This globally leading paper manufacturing project is invested in by Indonesia’s Sinar Mas Group. The achievement not only underscores the Company’s competitiveness in the international market but also marks the successful implementation of its “ride-along globalization” strategy.
Since 2022, when Guangdong Nanhai Holding Group Co., Ltd. (hereinafter referred to as “Nanhai Holdings”), a state-owned enterprise under the Nanhai District government, became the Company’s controlling shareholder, the Company has leveraged the complementary advantages brought by the merger and restructuring to achieve rapid development. Following a 48.56% revenue growth last year, in the first half of this year, the Company achieved remarkable results, with operating revenue reaching RMB 269 million, a year-on-year increase of 74.76%. Net profit surged by 465.74% year-on-year, demonstrating robust growth momentum.

Implementing a Core Business Focus Strategy to Achieve Rapid Growth

In April 2022, with the official entry of Nanhai Holdings as the controlling shareholder, the Company entered a new phase of development. This change in controlling shareholder to one with a state-owned background sparked widespread interest and curiosity: what tangible changes has the injection of state-owned capital brought to the Company?

In response to industry trends in the ventilation equipment sector and its own actual circumstances, the Company, guided by its controlling shareholder, actively responded to the strategic direction of state-owned enterprises focusing on their core businesses. It undertook a significant strategic realignment, concentrating more intently on ventilation and air handling business in sectors such as nuclear power, subways, tunnels, and large-scale industrial and civil construction. This move not only allowed the Company to sharpen its focus on core operations but also effectively optimized its asset structure, enhanced cash flow, and significantly improved overall operational quality and comprehensive competitiveness amidst economic fluctuations.

Guided by this core business focus strategy, the Company has achieved notable success in the ventilation equipment sector. Prior to the IKK Project in Indonesia, the Company had already secured an order for ventilation equipment for the Phase I 450,000-ton-per-year cultural paper project of China Paper Corporation’s Yueyang Forest & Paper, an upgrade and comprehensive technical transformation initiative. This project is not only a key construction project in Hunan Province but also stands out globally in the paper industry for its highest operating speed, largest single-line daily capacity, and most advanced control technology. Winning this order provided the Company with valuable experience in similar projects and marked its first comprehensive coverage of ventilation equipment for a benchmark project led by an industry-leading enterprise.

Liu Huaiyao, Executive Deputy General Manager of the Company, stated during an interview: "Clients choose Nanfeng for three main reasons: first, our strong supply capabilities and technological prowess; second, the standardization and compliance of our bidding documents; and third, as a state-controlled listed company, our state-owned background provides clients with added confidence.”
The Company’s technical expertise and supply capabilities have earned high praise within the industry. In August this year, the Company dispatched technical personnel to the Yueyang Forest & Paper project site for equipment commissioning. After observing the quality of the Company’s fans, the project’s technical lead remarked with deep appreciation: “These are the best fans I have seen in my over 30 years in this industry. Nanfeng is undoubtedly the smoothest supplier I have ever worked with."

As a leader in the high-end equipment manufacturing sector, the Company understands that R&D and innovation capabilities are crucial for enhancing its competitiveness in this field. Therefore, the Company consistently adheres to a technology-driven development approach, continuously strengthening its technological innovation capabilities. As early as 2009, the Company became the first enterprise in the domestic HVAC industry to obtain the nuclear-grade fan and nuclear-grade damper design and manufacturing licenses issued by the National Nuclear Safety Administration. Furthermore, the Company successfully developed key nuclear island HVAC equipment for 1,000 MW-class pressurized water reactor nuclear power plants, as well as subway ventilation and air handling system equipment, breaking foreign technology monopolies and ending the long-term reliance on imports for such products. Today, the Company has successfully passed the recertification as a National High-Tech Enterprise and has been honored with the title of National-Level “Little Giant” Specialized and Sophisticated Enterprise. Additionally, its intelligent production line project for key subway ventilation equipment components received support from the Nanhai District’s first batch of “Open Competition Mechanism” and key field technology research grants. The Company consistently ranks among the top in China in terms of market share in the nuclear power, subway, and tunnel sectors, highlighting its strong competitiveness in high-end equipment manufacturing.

Closely Monitoring Development Trends and Actively Pursuing Global Expansion
In recent years, driven by the continuous expansion of large state-owned enterprises in overseas construction markets and the establishment of overseas factories by industrial manufacturing firms, domestic mechanical equipment companies have been actively exploring new growth opportunities in international markets through a two-pronged strategy combining “ride-along globalization” and “independent globalization.” As a leader in its field, the Company is closely following this trend and actively expanding its global footprint.
In 2024, senior executives from the Company’s controlling shareholder, Nanhai Holdings, engaged in multiple in-depth discussions and analyses with the Company’s management regarding its globalization strategy. Nanhai Holdings explicitly stated its commitment to leveraging its state-owned background advantages to fully support the Company in establishing cooperative relationships with state-owned construction enterprises and leading industrial firms, enabling it to quickly capitalize on ride-along opportunities. Simultaneously, Nanhai Holdings encouraged all employees to actively seek and develop overseas business partners, aiming for the parallel development of both “ride-along globalization” and “independent globalization.”
Under this strategic guidance, the Company has successfully completed several significant complete set equipment export projects. Notably, the export of HVAC equipment for the Marrakech battery-grade cobalt sulfate project in Morocco marked the Company’s first complete ventilation system export for a new energy materials project. It also represented the Company’s inaugural collaboration with a central government-owned enterprise design institute’s new energy materials division, laying a solid foundation for future in-depth cooperation between the two parties.

Furthermore, the successful acquisition of the IKK Project in Indonesia signifies the Company’s first complete set of factory ventilation equipment export in the paper industry, secured through a new client for a complete system solution. This achievement greatly enhances the Company’s competitiveness for securing ventilation equipment orders for the second production line of this project and facilitated the development of its first overseas business partner in Indonesia—a renowned local fan company with deep roots in the Indonesian market, formerly a supplier for the Jakarta-Bandung High-Speed Railway project. Through this partnership, the Company aims to leverage its local resources in Indonesia to gradually enter a new lane of independent globalization.

Collaborative Synergy Leveraging Group-Wide Advantages
As the largest comprehensive state-owned investment group in Nanhai District in terms of asset size and capital strength, Nanhai Holdings’ business scope encompasses environmental services, energy supply, smart city development, digital economy, park development and operation, urban business services, financial investment, and fund management. Following its acquisition of the Company, Nanhai Holdings has actively promoted the integrated business development among its subsidiaries, aiming for industrial empowerment and the preservation and appreciation of state-owned assets.
With the rise of the globalization trend, a favorable opportunity has emerged for the integrated development of the freight forwarding companies within Nanhai Holdings and the Company’s global business. During the bidding process for the IKK Project in Indonesia, the Company collaborated closely with a shipping agency under Nanhai Holdings to provide clients with a comprehensive one-stop globalization solution. This collaboration enabled the Company to stand out among competitors, offering the most complete and detailed bid proposal, with the most advantageous packaging, transportation recommendations, and service pricing. The successful acquisition of this project fully demonstrates the significant power of collaborative synergy within the group.
Since exploring integrated development in 2023, the Company has also secured business cooperation for two projects within the Nanhai Holdings group: Keji Yunzhi Hui and Nanhai Cultural Center. Looking ahead, Nanhai Holdings plans to further integrate internal resources, constructing a service chain through integrated business development. This will create conditions for its subsidiaries to achieve differentiated competition and enhance their core competitiveness, maximizing the synergies of the group’s diverse businesses and contributing significantly to Nanhai’s high-quality development.
Ren Gang, Director and General Manager of the Company, stated that going forward, the Company will continue to align with the development demands of industries such as nuclear power, subways, and tunnels, maintaining its focus on core businesses. While comprehensively enhancing quality management, lean management, and intelligent digitalization, the Company will also consider expanding its scale through refinancing and mergers and acquisitions at appropriate times. The goal is to continuously improve the Company’s sustainable operational capacity and profitability, striving to achieve its high-quality development objectives.