Hailiang Holdings' "second generation" rises before IPO, Feng Luming promotes a group of Tsinghua PhDs

Written by: Li Shanshan | Produced by: Rui Cai Jing

Feng Hailiang and his son Feng Luming are the key drivers behind Hailiang Co., Ltd. (002203.SZ)’s two major market entries.

In 2008, under Feng Hailiang’s leadership, Hailiang successfully listed on the Shenzhen Stock Exchange. The company’s current market value is about 33 billion yuan. Just two years after going public in A-shares, Feng Hailiang stepped down from his chairman position, passing it to his sister, Feng Yali.

Subsequently, after leadership changes, former General Managers Cao Jianguo and Zhu Zhangquan took turns serving as chairman.

It wasn’t until July last year that Hailiang welcomed a “second-generation” successor, Feng Luming. Under his leadership, Hailiang submitted a prospectus to the Hong Kong Stock Exchange, planning to achieve dual listing in both Hong Kong and China.

As a copper processing company, Hailiang’s scale is impressive. In 2024, annual revenue exceeded 87.5 billion yuan, and in the first nine months of 2025, total revenue surpassed 65 billion yuan.

Behind this large revenue, Hailiang’s gross profit margin remains below 4%. Regarding cash flow, as of the end of November 2025, the company faces a short-term debt gap of nearly 13.2 billion yuan.

01

Raised over 203 billion yuan since A-share listing

Distributed 900 million yuan in dividends over two and a half years

Hailiang’s predecessor was Zhejiang Hailiang Group Zhujian Pipe Co., Ltd. (“Zhujian Pipe”), founded in August 2000. The company completed a shareholding reform in its second year, with a registered capital of 1.06 billion yuan.

After the reform, Hailiang Group held about 57.74% of shares, Shaoxing Zhongyu Metal Material Co., Ltd. held 2.17%, and 34 individual shareholders held 40.09%.

Following a series of equity changes and capital increases, the company’s share capital increased to 345 million shares, with Hailiang Group holding about 48.53%, Z&P ENTERPRISES LLC (“Z&P”) holding 34.86%, Shaoxing Zhongyu 1.14%, and ten other individual shareholders (including current directors, supervisors, and key employees) holding 15.47%.

In January 2008, Hailiang listed on the Shenzhen Stock Exchange, issuing 55 million shares at 11.17 yuan per share, raising 6.14 billion yuan.

According to Wind data, since its A-share listing, Hailiang has raised a total of 203.04 billion yuan, including direct financing (initial public offering, rights issues, private placements, convertible bonds) of 7.274 billion yuan, and indirect financing (cash inflows from fundraising) of 1957.66 billion yuan.

In September 2018 and November 2019, Hailiang raised funds through private placements and bond issuance, totaling 2.078 billion yuan and 3.15 billion yuan respectively. As of October 15, 2025, the company’s convertible bonds have been delisted from the Shenzhen Stock Exchange.

Alongside high financing, Hailiang has implemented substantial dividends. Since listing, the company has paid out a total of 2.486 billion yuan in cash dividends, with 900 million yuan distributed in 2023-2024 and the first half of 2025, accounting for 36.87% of the company’s net profit during those periods.

Before submitting the application, founder Feng Hailiang directly and indirectly (through Hailiang Group and Zhejiang Zhengmao) held a total of 29.85% of the company’s shares and controlled 30.93% of voting rights.

02

Major board changes before IPO

Son of the founder promoted as Tsinghua PhD

Now 66, Feng Hailiang no longer holds a position at Hailiang. Just two years after the A-share listing in 2010, he handed over the chairman role to his sister, Feng Yali. Since then, through leadership changes, former General Managers Cao Jianguo and Zhu Zhangquan served as chairmen in turn.

It wasn’t until July 2025 that Feng Luming succeeded Cao Jianguo as the “helmsman” of Hailiang. Currently, he serves as Chairman, Executive Director, and President. He is the son of Feng Hailiang, aged 39.

Feng Luming earned a Bachelor’s degree in Entrepreneurship and Innovation from San Francisco State University in May 2013, and a Master’s in Global Entrepreneurship and Management in August 2014.

Starting high, after graduation, he became Vice President of Hailiang Group. By March 2016, he joined the board, and in February 2023, he rejoined the group as Director and President.

Besides Hailiang Co., Ltd., Feng Luming has gained experience in various family businesses, serving as director of Zhejiang Hailiang Health Food Group, Zhejiang Hailiang E-commerce Co., Ltd., Hangzhou Puying Trading Co., Ltd., Swo International (2336.HK), and Hangzhou Hailiang Preschool Education Group.

To better manage family enterprises, he obtained an MBA from Columbia University, London Business School, and the University of Hong Kong in June 2021.

The 2024 annual report shows Feng Luming owns only 0.94% of Hailiang shares.

Under his leadership, the board of Hailiang also underwent changes.

In July 2025, Wu Changming, Su Hao, He Wentian, and Luo Chong were elected as Executive Directors through board elections, forming the new leadership team. The previous team members Wang Shuguang, Chen Dong, Jiang Limin, and Shao Guoyong stepped down.

Wu Changming is a “veteran” of Hailiang, having joined in August 2000, and currently serves as Vice President.

The other three new directors are relatively new to Hailiang. Su Hao and He Wentian joined in June 2022 and August 2023, respectively.

All three hold PhDs from Tsinghua University, are around 33-35 years old, and share similar backgrounds. Su Hao and Luo Chong focus on technology, with PhDs in Mechanical Engineering, responsible for overseas operations and new energy management. He Wentian specializes in corporate management, with an MBA, overseeing new business operations.

Former director Wang Shuguang was appointed Non-Executive Director. He has been a core member since September 2020, and from January 2026, will serve as President of Hailiang Group.

Before joining Hailiang, he accumulated over 20 years of experience in financial and risk management. Starting in July 2011, he rose from Treasury Section Chief at Urumqi High-tech Zone Finance Bureau to Director of Finance Office (Financial Office, Listing Office). Prior to Hailiang, he was Chairman of Xinjiang High-tech Zhaoyin Fund Co., Ltd.

As President, Wang Shuguang’s salary is nearly a million yuan higher than Feng Luming’s. In 2023 and 2024, Feng Luming’s annual salary was 2.462 million and 2.644 million yuan, respectively; Wang Shuguang’s salary in 2024 was 1.421 million yuan.

03

Over 35% of revenue from overseas

Profit growth in first three quarters of last year, revenue did not increase

As a leading global supplier of copper-based material solutions, Hailiang’s business scope is extensive.

Its core products include HVAC and industrial copper processing products, lithium battery and PCB copper foil, AI application copper-based materials, and aluminum-based products, used in air conditioners, appliances, equipment, ships, power, new energy vehicles, energy storage, photovoltaics, wind power, semiconductors, and more.

According to Frost & Sullivan data, based on 2024 shipment volumes, Hailiang ranks first globally in HVAC and industrial copper processing, with a market share of 20.3%. Its copper pipe exports have ranked first in China for 17 consecutive years, and it has been the top global exporter for six years. In lithium battery copper foil, it ranks sixth worldwide in shipment volume in 2024 and is China’s first large-scale copper foil producer to build and operate overseas.

Hailiang’s core competitiveness lies in “global capacity and technological R&D.”

As of September 2025, the company has established 23 production bases across Asia, Europe, North America, and Africa, including 12 overseas, forming a broad global manufacturing network. Its total global copper-based product capacity reaches 1.421 million tons, ranking first among Chinese suppliers based on 2024 overseas capacity.

From revenue structure, during 2023-2024 and the first nine months of 2025 (“reporting periods”), overseas revenue reached 28.058 billion, 32.358 billion, and 23.311 billion yuan, accounting for 37.1%, 37%, and 35.9%, respectively, demonstrating effective global capacity deployment.

In terms of technological R&D, the company is strong. By September 2025, it held over 900 patents and 100 software copyrights worldwide, including 150 invention patents, ranking first domestically among copper processing companies.

However, despite its market position, Hailiang faces performance pressure.

In the first nine months of 2025, total revenue declined 4.55% year-over-year to 65.018 billion yuan, while net profit increased 18.56% to 931 million yuan.

In 2024, Hailiang’s revenue increased by 15.59% to 87.542 billion yuan, but net profit plummeted 46.65% to 624 million yuan compared to the previous year.

Most of its revenue comes from product sales, with the three main business segments continuing to grow.

During the period, HVAC and industrial copper processing accounted for over 60% of revenue, reaching 70.4% in the first nine months of 2025.

The company has also made progress in new energy and AI fields. In the first nine months of 2025, revenue from lithium battery and PCB copper foil products, and AI copper-based solutions, reached 3.48 billion and 373 million yuan, respectively, exceeding full-year 2024 revenues for those segments.

Besides product sales, Hailiang engages in copper trading, with revenues of 26.465 billion, 25.122 billion, and 15.001 billion yuan in each period, accounting for 35%, 28.8%, and 23.1% of total revenue, making it the second-largest revenue source.

In the first nine months of 2025, copper trading revenue fell 32.01% year-over-year, mainly driving the overall revenue decline.

04

Raw material costs account for over 95%

Gross profit margin below 4%

Analyzing the profit growth in the first three quarters of 2025, it’s clear that this isn’t solely due to core business growth, but also benefits from reduced R&D spending and contributions from other income.

In the first nine months, R&D expenses totaled 83.641 million yuan, down 43.38% year-over-year; in 2024, R&D expenses decreased 23.59% to 140 million yuan.

During this period, other income such as government grants and interest income totaled 824 million yuan.

R&D expenses are the lowest among operating expenses. During the reporting periods, sales and marketing expenses were 210 million, 241 million, and 210 million yuan; general and administrative expenses were 946 million, 1.209 billion, and 949 million yuan, with employee compensation accounting for over half, at 498 million, 634 million, and 510 million yuan.

Notably, despite hundreds of billions in revenue, Hailiang’s gross profit margin remains low, at only 3.9%, 3.2%, and 3.7% during the periods.

Breaking down further, HVAC and industrial copper processing gross margins were 5.9%, 4.7%, and 4.8%; lithium battery and PCB copper foil segments turned profitable in the first nine months of 2025, but with a gross margin of only 0.4%, after experiencing gross losses of 24.2% and 6.5% in 2023 and 2024.

AI copper-based solutions have relatively high and steadily increasing gross margins, at 10.6%, 11.1%, and 14.4%. However, this segment accounts for less than 1% of total revenue, so its impact on overall performance is limited.

The low gross profit margin is largely due to rising raw material prices. Copper, as Hailiang’s main raw material, accounts for over 95% of its operating costs.

From 2020 to 2025, the London Metal Exchange (LME) average price of electrolytic copper rose from $6,167 to $9,939 per ton. The Shanghai Futures Exchange (SHFE) average price increased from 48,238 yuan to 79,859 yuan per ton. Continuous high copper prices have directly driven up procurement costs.

05

Operating cash flow turned positive before IPO

Short-term debt gap exceeds 13.2 billion yuan

During the reporting period, despite consistent profitability, Hailiang’s operating cash flow has been negative for two consecutive years. In 2023 and 2024, net cash flow from operating activities was -855.4 million and -2.354 billion yuan. In the first nine months of 2025, it turned positive at 66.78 million yuan.

The outflow was mainly due to increased inventory purchases and trade receivables.

Inventory levels continued to grow, reaching 7.087 billion, 8.755 billion, and 9.73 billion yuan, representing 29.01%, 31.54%, and 30.23% of current assets.

Trade receivables and notes receivable were 5.67 billion and 8.244 billion yuan in 2023 and 2024, accounting for 7.49% and 9.42% of revenue. By the first nine months of 2025, they decreased to 7.593 billion yuan, and operating cash flow turned positive.

Cash flows from investing activities remained negative, with net outflows of 2.378 billion, 1.04 billion, and 228 million yuan, mainly due to purchases of fixed assets, intangible assets, and other non-current assets, totaling 2.222 billion, 1.274 billion, and 604 million yuan, respectively. Payments for derivatives (foreign exchange forwards) also contributed, totaling 337 million, 64 million, and 604 million yuan.

Large cash outflows increased financial pressure, forcing reliance on external financing to sustain operations.

During the period, net cash inflows from financing activities were 5.742 billion, 2.398 billion, and 346 million yuan.

Most financing came from borrowings, totaling 27.007 billion, 26.139 billion, and 22.905 billion yuan, with repayments of 22.462 billion, 22.357 billion, and 19.699 billion yuan.

Interest expenses from borrowings were high, at 688 million, 693 million, and 523 million yuan.

As of September 2025, cash and cash equivalents stood at 4.168 billion yuan; by the end of November, it decreased further to 3.455 billion yuan, a reduction of 713 million yuan in two months.

Short-term borrowings as of November 2025 totaled 16.632 billion yuan, with short-term lease liabilities of 33.5 million yuan, totaling 16.665 billion yuan in short-term debt, with a short-term debt gap of 13.211 billion yuan—more than 1.6 times the 2023 year-end short-term debt gap of 5.033 billion yuan.

Appendix: List of intermediaries involved in Hailiang’s IPO

Joint Sponsors: China International Capital Hong Kong Securities Limited, GF Securities (Hong Kong) Limited

Legal Advisors: Gao Wei Shen Law Firm, Guo Hao Law Firm (Hangzhou)

Auditors and Reporting Accountants: Tianjian International Certified Public Accountants