In the field of domestic industrial control, there is a shining star—Huichuan Technology. Founded in 2003, it has a unique Huawei gene. Looking back to 2001, Huawei sold its electrical division to Emerson, and at that time, the director of the inverter product line, Zhu Xingming, left Huawei to establish Huichuan Technology, thus beginning Huichuan’s remarkable journey in the industrial control sector.
Huichuan Technology initially started with inverters. Inverters, which control motor speed and torque by changing voltage and frequency, are key devices that effectively meet the demand for energy-saving speed regulation. In the industrial sector, motors are significant energy consumers, and achieving precise speed control through inverters can greatly reduce energy consumption and improve energy utilization efficiency. For many enterprises, this is not only a technological upgrade but also a substantial cost-saving measure. Leveraging the technology and market experience accumulated in the inverter field, Huichuan Technology continuously expands its business landscape, venturing into servo systems and PLCs. PLCs, known as the brain of industrial control, are responsible for issuing various commands and coordinating the orderly operation of equipment; while inverters and servo systems act as the muscles of industrial control, providing power and executing actions precisely. Together, these three components construct the core architecture of industrial automation. Additionally, Huichuan Technology has keenly captured the development opportunities in the new energy vehicle industry, providing electric drive and power systems, further enriching its product line and broadening its market scope.
From the perspective of revenue and profit data, Huichuan Technology has been a model of growth stocks over the past decade. From 2014 to 2024, revenue skyrocketed from 2.243 billion to 37.039 billion, a growth of 16.51 times, demonstrating strong market expansion capabilities and business growth potential. In terms of profit, it increased from 666 million in 2014 to 4.285 billion in 2024, a growth of 6.43 times. However, the profit growth rate is far lower than the revenue growth rate, which is a common issue faced by China’s manufacturing industry—low profit margins make it difficult to become a cash cow company. The Q1 2025 report shows a year-on-year revenue growth of 38.28% and a profit growth of 63.08%, indicating a significant improvement in profits. However, a deeper analysis of the financial report reveals that operating costs increased by 44.25% year-on-year in Q1, and the substantial profit growth was largely due to investment income, which is clearly not sustainable, casting a shadow over the high profit growth rate. Further examination of the annual report shows that profits are significantly lower than revenue growth, primarily due to changes in sales structure and intensified market competition, leading to a continuous decline in overall gross profit margin. For example, in 2024, the new energy and rail transit business accounted for 44.93% of main revenue, but the gross profit margin was only 17.12%, indicating that the high revenue growth in this business has not translated into substantial profits. This also reflects the challenges faced by domestic manufacturing during the expansion process: as production expands year after year, fixed capital continues to grow, leading to oversupply and inventory buildup, which in turn affects the company’s gross profit margin.
However, from 2017 to 2023, Huichuan Technology’s market share in the three major products—inverters, servo systems, and PLCs—has been increasing year by year, showcasing its technological strength and product competitiveness. Although in some areas, such as the large PLC market, foreign brands like Siemens and Omron still dominate (in the medium and large PLC market, Siemens alone holds a market share of 54.4%, Omron 12.6%, while domestic products combined hold only 5.9%), this also leaves ample room for development for Huichuan Technology.
