$105 billion, another billionaire being "taken in for investigation"

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The Billion-Yuan Tycoon Was Detained—How Does the Hydraulic Leader Move Forward

This article is 3,798 Chinese characters, about 5.6 minutes

By Lü Jingzhi | Edited by Wu Ren

Source: #Rongzhong Finance

(ID: thecapital)

The top tycoon of Changzhou has been detained.

Recently, Hengli Hydraulic released an announcement stating that the company’s actual controller and chairman, Wang Liping, was detained by the Jiangsu Provincial Supervisory Commission and placed under investigation. The announcement did not disclose the specific reasons for the detention. At the same time, Hengli Hydraulic said that the company has made proper arrangements for the relevant work; day-to-day operations and management are handled by the management team, and the other directors and senior executives are all performing their duties normally, with production and operating conditions remaining normal.

As for when the Wang Liping family was discussed previously, it was because he had sat on the seat of the billionaire #1.

This month, the Hurun Global Rich List was released. Wang Liping’s family ranked 194th with wealth of 105 billion yuan, re-securing the title of Richest Person in Changzhou, Jiangsu. This figure increased by about one time compared with the previous year—an increase so large that it stood out on the list. Behind the surge in wealth was Hengli Hydraulic’s strong performance on the 2025 capital market: from around 68 yuan per share at the end of 2024, it rose all the way to 125 yuan per share, with the market value nearly doubling.

And right after Hengli Hydraulic’s share price surged to a high level, Wang Liping also completed a round of share reductions.

According to the announcement disclosed by Hengli Hydraulic last year, the company’s second-largest shareholder, Shenno Technology (Hong Kong) Co., Ltd., from September 1, 2025 to the date of the announcement, had cumulatively reduced its holdings of about 2.39% of the company’s shares. The reduction price range was 84 yuan to 104.82 yuan per share, with a total amount of about 105B yuan. This Shenno Technology (Hong Kong) Co., Ltd. is jointly controlled by Wang Liping, his wife, Qian Peixin, and their son, Wang Qi, together. In other words, the scale of the Wang family’s cashing-out near 3 billion yuan at a high level attracted widespread market attention at the time.

After the announcement that the chairman was detained was issued, the secondary market responded quickly as well. The share price fell from around 100 yuan per share at around the 20th day to around 91 yuan per share on the morning of the 24th day, with the decline almost reaching 10%.

From a financial perspective, in the first three quarters of 2025, Hengli Hydraulic recorded revenue of 7.79 billion yuan and attributable net profit of 2.93B yuan, representing year-over-year growth of 12.31% and 16.49%, respectively—an outcome that is already fairly satisfactory.

However, beneath this set of financial results, there are still hidden concerns. In the first three quarters last year, the net cash flow from operating activities decreased by nearly 20% year over year. Accounts receivable and inventory both grew by more than 20% compared with the end of the previous year, which indirectly indicates that signals of payment collection timing and inventory pressure already existed.

In response, expanding the business is one of the company’s solutions. The product lineup has expanded from a single hydraulic cylinder to a dual-wheel-drive model of pumps and valves; the company continues to step up investment in linear drive and electrification. In the first half of 2025, it cumulatively developed more than 50 new products and completed mass-production conversion. It also added nearly 300 newly filed customers. But whether this new business can truly deliver the expected results remains a challenge.

Competition in the linear drive and electrification tracks in itself is not easy. There are many entrants, and the customer validation cycle is long. From “filed customers” to forming stable revenue, there is still quite a long way to go. More importantly, this kind of new business has very high requirements for both the speed of technological iteration and the ability to deliver at scale. Against the backdrop of pressure on main business cash flow, advancing multiple new business lines at the same time is itself a test of resource allocation.

From a Billion-Yuan Tycoon to “Hydraulic Maotai”

Looking back at Wang Liping’s entrepreneurial story, it is a typical example of China’s manufacturing industry rising from scratch.

He was born in rural Wuxi, Jiangsu. In his early years, he went to work as a technician at a township pneumatic factory. This grassroots experience gave him a close understanding of the production logic of pneumatic and hydraulic components, and also made him see how weak domestic supply was in this industry. In the early 1990s, carrying savings of 50k yuan, Wang Liping founded a small plant with only a few employees—Hengli Pneumatics—mainly producing pneumatic component products such as pneumatic cylinders and pneumatic control valves. At that time, this was just one unremarkable factory among countless township small plants.

The real turning point happened in the mid-to-late 1990s.

Around 1996, China’s excavator market entered a phase of rapid expansion. Demand surged dramatically, but the supply of supporting hydraulic cylinders could not keep up. Domestic hydraulic cylinders had unstable quality, and main engine companies relied heavily on imports, with procurement costs staying high. Wang Liping saw this gap and decided to shift the business direction from pneumatics into hydraulics, focusing specifically on hydraulic cylinders for excavators—a niche segment that, at the time, was almost monopolized by foreign capital.

This decision was not an easy bet at the time. Hydraulic components require extremely high precision. At that time in China, the country both lacked mature process accumulation and lacked technical pathways that could be referenced. Wang Liping led the team to conduct repeated experiments and go through a fairly long period of technical R&D breakthroughs. By the late 1990s, Hengli Hydraulic successfully developed the first generation of hydraulic cylinders specialized for excavators, breaking the long-standing technical monopoly held by overseas companies in this area. After the product launch, driven by meeting performance requirements and offering a price far lower than imported products, it quickly opened up the market. Hengli Hydraulic’s reputation began to spread within the industry.

Entering the new century, Wang Liping did not stop at cylinders as a single category.

In 2005, Hengli Hydraulic successfully developed high-pressure pumps and motors for excavators, again filling a domestic gap. This product achieved performance at an international advanced level, but its price was only about half that of similar products overseas. This price advantage allowed Hengli Hydraulic to quickly build scale in the domestic market and begin expanding overseas. The two rounds of technological breakthroughs established Hengli Hydraulic’s leading position in domestic hydraulic products and also helped Wang Liping build a reputation that is difficult to replicate in the industry.

In 2011, Hengli Hydraulic listed on the Shanghai Stock Exchange. With the support of the capital market, the company’s expansion speed clearly accelerated. At the time of listing, the revenue share from cylinders was as high as 99%, and the product structure was highly concentrated. Over the following more than ten years, Hengli Hydraulic continuously increased R&D investment and gradually extended the product lineup into higher technical-threshold areas such as hydraulic pumps, hydraulic valves, and hydraulic systems. By 2024, the revenue share from pumps and valves had reached 38%, while cylinders fell to 51%—and the product structure has become far more diversified than before.

Overseas expansion was also advancing in parallel. Hengli Hydraulic acquired companies such as German Inile, and went on to set up companies in Chicago and Tokyo—extending its reach to mature industrial markets in Europe, the U.S., and Japan. For a hydraulic company that started from Wuxi’s town-and-township level, this step was not easy: the customer validation cycle in overseas markets is long, localization operating costs are high, and technical standards differ from those in China. Yet it is precisely these overseas layouts that have gradually transformed Hengli Hydraulic from a domestic substitution enterprise into a hydraulic system supplier with a certain degree of international competitiveness.

From financial data, the results of this growth journey are quite clear. Between 2016 and 2024 (excluding 2022), Hengli Hydraulic’s revenue grew from 1.37 billion yuan to 9.39 billion yuan. Attributable net profit increased from 70 million yuan to 2.09B yuan—nearly thirtyfold. The market label “Hydraulic Maotai” did not come out of thin air; behind it was decades of incremental technological accumulation and market share built up over time.

That is also why the news that Wang Liping was detained caused shock throughout the industry—not only at the level of the capital market. For practitioners and observers of the hydraulic industry, Hengli Hydraulic, to a considerable extent, represents proof that the path of China’s high-end manufacturing domestic substitution is workable. And how this company will maintain its operating cadence and push new business into implementation in the absence of its actual controller is a real test facing the management team.

Traditional Components at the Doorstep of a New Track

For traditional components companies, the core proposition of the past three decades has been only one thing: domestic substitution. By offering lower prices and sufficiently stable quality, pushing overseas brands out of the domestic market. Hengli Hydraulic has done quite successfully along this route. But today, this proposition itself has quietly changed.

A new demand side is taking shape. The rapid advancement of humanoid robots has suddenly put precise transmission component segments—which had previously been relatively niche—into the spotlight. Every joint of a humanoid robot requires high-precision actuators to drive it, and the core of the actuator is precisely transmission components such as ball screws, gear reducers, and motors. The requirements these components face for precision, durability, and stability are far more stringent than those of traditional engineering machinery supporting parts. More importantly, this kind of demand is still highly dependent on imports, and the overall penetration rate of domestic products is low. Even today, the market for core components such as planetary roller screws is still firmly controlled by European companies. This means the battlefield for the next round of domestic substitution has already shifted quietly.

Opportunities for traditional components companies are precisely hidden in this shift. What they have is years of accumulated precision machining capability, supply chain management experience, and trust relationships deeply forged through close collaboration with downstream OEMs. These capabilities are not outdated on the new track—they are even the core chips for entering the field. Hengli Hydraulic is also doing this—its layout in linear drive and electrification directions, in essence, uses its old capabilities to meet new demand. Similar moves are not rare in the industry. Many companies originally from the auto components sector have also been gradually moving into precision ball screw and actuator fields, trying to transfer the precision manufacturing capability honed in the automotive industrial chain to this new track of robotics. Some companies even directly changed the direction of projects planned for募集资金 (fund-raising investment), shifting capital that was originally intended for expansion in traditional businesses to R&D and production of core components for humanoid robots. The logic behind this is straightforward: the incremental space in the old track is already limited; the door of the new track is not yet closed. If you don’t secure a position now, it will become harder to enter later.

But transformation is never as simple as just transferring capabilities.

The requirements humanoid robots place on components are not on the same level as engineering machinery. Engineering machinery pursues durability under harsh operating conditions, while robot joints need high-precision, high-response motion control to be achieved within extremely small spaces. The differences between the two in terms of material selection, machining processes, and inspection standards cannot be quickly closed by just “throwing money” at it. For precision ball screw machining, the requirements for machine tool accuracy, heat treatment processes, and inspection capabilities are extremely high. Even slight deviations can cause products to rapidly wear out and fail under high-frequency motion. These process barriers are built through years of accumulation and cannot be simply replicated through short-term investment.

A more practical issue is that humanoid robots are still in the early stage of ramping up to mass production. OEMs’ hardware configurations are still being iterated, and the technical routes for components have not converged. For suppliers, this means that samples shipped today may not make it to the day when bulk purchasing begins. With long customer validation cycles, uncertain technical routes, and large upfront R&D investments—these three pressures stacked together test companies’ financial staying power and strategic determination. If the main business cash flow is already under pressure, and you also need to bet on a new direction with a long payback cycle, it is not easy to strike the right balance.

Of course, difficult as it is, there is no question about the big direction. These industrial main lines being advanced at the same time—new energy vehicles, humanoid robots, and the low-altitude economy—share a common underlying demand: localization of high-end precision components. This is not a question of whether to do it; it is a necessary path for upgrading the entire manufacturing industry. Support at the policy level is also being continuously strengthened. From the national level to local governments, industrial plans focused on localization of key components have been rolled out one after another, which to some extent reduces the trial-and-error cost of corporate transformation.

From a more macro perspective, this round of upgrade and transformation in traditional manufacturing is essentially a transfer of capabilities—from “good enough” to “precision.” In the past, domestic substitution was fought on the basis of cost performance. What comes next is competition over whether you can stand firm at even higher technical thresholds. This places higher demands on companies’ R&D investment, talent structure, and the speed of organizational response.

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