Chengdu Leejun Industrial Co., Ltd. (002651.SZ): BCG Matrix [Dec-2025 Updated]

Chengdu Leejun's portfolio balances high-growth stars in aerospace components and high-pressure grinding rolls-driving rapid revenue and justifying heavy CAPEX-with reliable cash cows in cement roller presses and aftermarket services funding diversification; meanwhile two high-potential question marks (lithium battery anode equipment and international aerospace expansion) demand continued R&D and selective investment, and two marginal dogs (legacy small crushers and non-core metal fabrication) signal clear divestment candidates-a mix that makes capital-allocation choices over the next 18-36 months pivotal to sustaining growth and unlocking shareholder value.

Chengdu Leejun Industrial Co., Ltd. (002651.SZ) - BCG Matrix Analysis: Stars

Stars

ADVANCED AEROSPACE COMPONENT MANUFACTURING OPERATIONS - The Dele subsidiary's aerospace business is positioned as a clear 'Star' with exceptional growth and strong relative market presence in the specialized domestic military aircraft tooling and structural component sector. Revenue growth for the aerospace segment reached 28% year-over-year as of late 2025, with the division commanding a 15% share of the niche domestic market. Gross margins have been sustained at approximately 42% despite inflationary input pressures. Ongoing capital expenditures are elevated at 18% of segment revenue to scale production lines supporting the C919 and C929 programs. Investment in automated machining centers has produced a measured return on investment (ROI) of 22% driven by high utilization and throughput improvements.

Key quantitative metrics for the aerospace segment:

• Revenue growth (2025 YTD): 28%
• Market share (domestic military aircraft tooling & structures): 15%
• Gross margin: 42%
• CapEx-to-segment revenue: 18%
• ROI on new automated machining centers: 22%
• Primary programs supported: COMAC C919, COMAC C929

HIGH PRESSURE GRINDING ROLLS FOR MINING - The high-pressure grinding rolls (HPGR) division has emerged as a Star within Leejun's portfolio. In fiscal 2025 the mining machinery segment posted an 18% growth rate, capturing a 22% domestic market share as mining operators transition to energy-efficient comminution technologies. This business now contributes 32% of consolidated revenue, a marked uplift from prior cycles. Operating margins have stabilized at 26%, reflecting the technical complexity and value-added nature of the equipment. The Chinese total addressable market (TAM) for HPGR systems is estimated at RMB 4.0 billion, offering substantial runway for continued expansion and further share gains.

Key quantitative metrics for the HPGR mining segment:

• Revenue growth (2025 fiscal year): 18%
• Domestic market share (HPGR): 22%
• Contribution to total corporate revenue: 32%
• Operating margin: 26%
• Chinese TAM (HPGR systems): RMB 4.0 billion
• Commercial dynamics: mine energy-efficiency adoption, retrofit and greenfield demand

Comparative star diagnostics - The two star units display complementary strengths: aerospace delivers superior gross margins (42%) with high CapEx intensity and rapid ROI on automation investments (22%), while HPGR provides larger immediate revenue contribution (32% of corporate revenue) with robust operating margins (26%) and a clear TAM of RMB 4.0 billion. Both segments exhibit high relative market share in their respective niches (15% aerospace; 22% HPGR) coupled with double-digit growth rates (28% and 18%), qualifying them for sustained investment priority under a BCG framework.

Chengdu Leejun Industrial Co., Ltd. (002651.SZ) - BCG Matrix Analysis: Cash Cows

DOMESTIC CEMENT INDUSTRY ROLLER PRESS SYSTEMS remains the primary cash generator for Leejun. This mature product line holds a 38% share of the Chinese roller press market and delivers 45% of group annual revenue. Market growth for this segment has slowed to approximately 3% annually, reflecting industry maturation and capacity stabilization. Capital intensity is low: segment CAPEX averages under 5% of segment sales, enabling substantial free cash flow. Operational efficiency and scale deliver a steady net profit margin of 19% and a return on assets (ROA) exceeding 25%, which has underpinned corporate investment into aerospace and new energy initiatives.

Key financials and operational metrics for the roller press systems division (using group annual revenue = RMB 2,000 million as a working base):

Primary operational strengths enabling the roller press division's cash generation:

• Economies of scale in procurement and production reducing unit costs by estimated 8-12% versus smaller competitors.
• Optimized supply chain and logistics lowering inventory days to industry-low levels (target 45-60 days).
• After-sales integration with spare parts and service contracts that improve lifecycle margins.

EQUIPMENT MAINTENANCE AND SPARE PARTS SERVICES constitutes a highly profitable aftermarket business with recurring revenue characteristics. This division grows at roughly 6% annually and now contributes 24% of group turnover. Proprietary spare parts penetration within Leejun's installed base is estimated at 70%, producing high customer stickiness and low churn. Gross margins exceed 55%, making this the company's most profitable segment. Operational risk is low, retention rates are high, and segment ROI is approximately 30%.

Key financials and operational metrics for the aftermarket service & spare parts division (using group annual revenue = RMB 2,000 million):

Operational levers and risk mitigants for the aftermarket segment:

• High spare parts penetration (70%) creates predictable replacement cycles and warranty tail revenue.
• Service contracts convert cyclical new-equipment exposure into recurring margins, smoothing cash flows.
• Low incremental CAPEX needs maintain elevated ROI even as headcount and field-service footprints expand moderately.

Chengdu Leejun Industrial Co., Ltd. (002651.SZ) - BCG Matrix Analysis: Question Marks

Chapter: Dogs - Question Marks

The following section examines two business lines that currently occupy low-relative-market-share positions in markets with varying growth profiles. Both units require heavy ongoing investment and present asymmetric risk/return profiles: LITHIUM BATTERY ANODE MATERIAL GRINDING EQUIPMENT and INTERNATIONAL AEROSPACE SUPPLY CHAIN EXPANSION.

LITHIUM BATTERY ANODE MATERIAL GRINDING EQUIPMENT (Question Mark)

Leejun has recently entered the lithium battery material processing market, specifically supplying grinding equipment for anode materials. The target market is expanding rapidly at an estimated 35% compound annual growth rate (CAGR). Leejun's current market share in this nascent segment is below 4%, positioning it as a small entrant versus established specialty chemical equipment providers.

Key financial and operational metrics for this unit are as follows:

Strategic considerations and near-term priorities:

• Scale manufacturing to reduce unit costs and improve gross margin.
• Target niche OEMs and material processors where technical fit is strongest.
• Continue R&D (12% spend) but reallocate toward process yield improvements and certification acceleration.
• Monitor customer concentration risk and secure multi-year pilot agreements to convert negative margin to positive by achieving >10% market share in served niches.

Risks specific to this unit include prolonged certification timelines, slower-than-expected customer adoption, price competition from established suppliers, and the potential need for additional capex beyond current forecasts.

INTERNATIONAL AEROSPACE SUPPLY CHAIN EXPANSION (Question Mark)

Leejun is pursuing international civil aviation OEM contracts. The global civil aviation equipment market is growing at approximately 12% annually. Despite this, Leejun's international sales represent less than 3% of its aerospace segment revenue, indicating minimal global market penetration and a low relative market share on the international stage.

Operational and commercial actions under consideration:

• Prioritize AS9100 and targeted OEM qualification paths to reduce audit cycles from initial average of 18-24 months to an optimized 12-18 months.
• Negotiate cost-sharing pilot programs or refundable tooling agreements to lower initial cash outlay.
• Increase local partnership and tier-1 distributor engagement to accelerate entry and reduce time-to-contract.
• Monitor marketing spend effectiveness given a 40% YoY increase; implement KPIs tying BD investment to pipeline conversion rates and contract win probability.

Material risks include prolonged lead times for contract awards, capital tied up in qualification efforts, potential margin compression from meeting OEM pricing demands, and geopolitical/FTA impacts on cross-border supply chains.

Chengdu Leejun Industrial Co., Ltd. (002651.SZ) - BCG Matrix Analysis: Dogs

LEGACY SMALL SCALE CRUSHING EQUIPMENT: The production line for traditional small-scale crushing equipment recorded a revenue decline of 12% year-on-year, reducing revenues from ¥150 million in 2024 to ¥132 million in 2025. Market share in the domestic crushing equipment market is now under 2% (estimated 1.6%). The relevant market is stagnant to shrinking (-3% annual growth). Gross margin has compressed to 8% (down from 14% two years prior), producing gross profit of approximately ¥10.6 million in 2025. Fixed costs attributable to dedicated production lines remain roughly ¥8-9 million annually, leaving very slim coverage of fixed overheads. Capital expenditure for this segment has been reduced to ¥0 for 2025, with management signaling phase-out plans. Contribution to consolidated operating profit is below 1% (≈¥3-5 million), and segment EBITDA margin is under 5%.

GENERAL METAL FABRICATION FOR NON CORE SECTORS: Non-core metal fabrication services are operating in a low-growth environment (≈2% market growth). Leejun's share of this fragmented market is under 1% (≈0.8%). Revenue contribution to the group for 2025 is estimated at 2% of total corporate revenue (total corporate revenue estimated ¥6.6 billion; segment revenue ≈ ¥132 million). Operating margin for this segment is approximately 4% (≈¥5.3 million operating profit), substantially below the corporate average operating margin of 21% (corporate operating profit baseline ≈ ¥1.386 billion). Asset base includes older press brakes and CNC units with an internal ROI of ~3% and depreciated book value of ¥40 million. Competitive pressure is primarily price-based, driving margin compression and low utilization (plant utilization ~48%).

Operational and strategic implications for both 'Dogs' segments:

• Divestment candidates: legacy crushing equipment and non-core fabrication due to negligible market share and subpar margins.
• CAPEX reallocation: maintain CAPEX at zero for legacy crushing; avoid further investment in non-core fabrication until clear turnaround economics exist.
• Cost rationalization: consolidate production footprints, retire underused assets to reduce fixed costs by estimated ¥6-10 million annually.
• Working capital: wind-down plans to free up estimated ¥20-40 million in tied-up inventory and receivables within 12-18 months.
• Potential sale metrics: target buyers to be evaluated at EBITDA multiples of 3-5x given low growth and margins, implying potential disposal proceeds ≈ ¥16-26 million per segment depending on negotiation.