Merger help Zhongding realizing dream

Anhui Zhongding Sealing Parts is a leading company in the non-tire rubber product sector and ranked the 29th among global counterparts in 2015.

The company’s products are widely used in automobile, machinery, aviation, high speed rail and military industrial sectors with a domestic market share of 10% and an international market share of about 2-3%.

Zhongding initiated the internationalization strategy in 2008 and maintained rapid revenue growth in overseas market, from which the amount had surpassed its revenue gained in domestic market.

The company purchased quality rubber parts producers across the world and diversified into emerging automotive sectors, such as assist driving.

Main Business Keeps Rapid Growth

Good management capacity ensures Zhongding accumulating high-tech sealing technologies to improve its product structure and to attract global consumers.

The company kept a compound growth rate of 26% from 2008, its growth in overseas market even reached 34%, and the overseas revenue had so far exceeded domestic revenue.

Good management, R&D and advanced technology shaped Zhongding’s technical advantages.

Lower costs and recovery in demand are expected to help the company expanding its market share.

High-end Overseas M&A

Targets of Zhongding’s merger and acquisition strategy in overseas markets are high-end sealing parts companies.

Zhongding purchased U.S.-based COOPER, U.S.-based ACUSHNET and Precix2, Germany’s leading sealing company KACO, and Germany’s WEGU, respectively, in 2011, 2012, 2014, and 2015.

Through the acquisitions, Zhongding entered high-tech sealing parts R&D and manufacturing sector.

New energy and assist driving are emerging sectors it interested in.

By purchasing Germany-based AMK, Zhongding diversified into ADAS advanced driver assistant sector.

AMK is a supplier for electrical machinery battery controlling system, assist driving and chassis electrical controlling system; and its businesses divide into automobile and driving control.

Zhongding also deployed in new energy sector by exploiting the charging pile market, and set foot in the advanced engine and auto aftermarket sectors.

Broad Space for Further Growth

Pingan Securities predicted that the company still has large space for further development.

On the one hand, the market share of its main business may increase further and it is likely to be one of the top 15 non-tire rubber product producers.

On the other hand, the company has diversified into assist driving and new energy sectors, and it is likely to create a new kingdom.

Net profits of Zhongding in 2016-2018 are predicted to reach 905 million, 1,131 million and 1,325 million yuan, respectively.