Reinvention is secret of Sanhua's success

"As the market penetration rate of air conditioners is not high in Europe and China, I believe our valve business will continue to have opportunities in these regions," said Zhang.

"The electronic expansion valve business can grow fast, because the air conditioner market is going through a phase of technological upgrading for energy conservation and emission reduction."

Electronic expansion valves are a key component in variable frequency refrigeration units, which feature higher efficiency, longer lives and lower noise levels. These parts have technology and scale barriers. Globally, only a few companies such as Sanhua, Japan's Fujikoki Corp and China's DunAn Group have the capacity to design and make such machinery.

Zhang Licong, a home appliance industry analyst at Huatai Securities Co Ltd, said that the European economy is still weak and the home appliance business in the region will not grow very much.

The US market has better potential, but the growth rate is unlikely to be very high there either, he added.

"But it's important and wise for Sanhua to have plans for the US and Europe," he said, adding that the slowdown of China's property market will be a negative factor for the air conditioner and air conditioner valve businesses in China.

According to Zhang Yabo, before the 2008 financial crisis, the company's overseas revenue exceeded that in China. Between 2008 and 2014, stimulus policies helped domestic revenue outstrip that of export markets.

This year, the situation has reversed again, with overseas revenue in the lead.

"We're setting up more factories and sales networks abroad. And domestic demand growth will not always be high. We believe our overseas revenue proportion will be more than 50 percent in the coming years," he said.

And what is his "China dream"?

That when they go abroad, he said, the innovation and technology of China's companies will win the respect of the world.

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