Source Code Capital portfolio company "Zoneneng United" announces completion of Series C with cumulative fundraising of RMB 3 billion; existing shareholder Source Code Capital continues to increase its stake

On March 9, Zhongneng Lianhe, a domestic one-stop engineering equipment rental platform, announced the completion of its C2 and C3 funding rounds. The C2 round was led by Source Code Capital, with BHUO Venture Capital participating; the C3 round was led by Five Star Holdings, with follow-on investments from Shanghai Shibei Gaoxin Big Data Fund, Yimei Capital, BHUO Venture Capital, Source Code Capital, Ruixiang Capital (a subsidiary of COSCO Shipping Financial Holdings), and Yibo Financial. The total C-round financing, combining equity and debt, has now exceeded RMB 3 billion. Source Code Capital, which led Zhongneng's Series B, also continued to increase its stake in the C1 round.

Founded in 2016, Zhongneng Lianhe is an industrial internet company specializing in engineering equipment rental. After more than four years of development, its operations now cover 25 provinces (and autonomous regions), 4 municipalities directly under the central government, and over 300 prefecture-level cities. The company has established more than 100 warehousing, logistics, and service centers, providing customers with one-stop solutions spanning multiple categories of engineering equipment — including aerial work platforms, cranes, and forklifts — as well as logistics services.

Since its founding, Zhongneng Lianhe has embraced its mission of contributing to national development, actively integrating into major national strategies such as the Yangtze River Delta integration, the Guangdong-Hong Kong-Macao Greater Bay Area, the Beijing-Tianjin-Hebei integration, and the Belt and Road Initiative. The company has participated in landmark national projects including the Hong Kong-Zhuhai-Macao Bridge, Beijing Daxing International Airport, the National Speed Skating Oval, and the Xiong'an High-Speed Railway Station, serving more than 50,000 cumulative customers.

The "Zhongneng Model" — Driving Intelligent Transformation in Construction Machinery

On January 23, 2020, the 29th day of the twelfth lunar month, upon learning that Wuhan would be building Leishenshan Hospital, Zhongneng Lianhe proactively assumed social responsibility. It rapidly formed an anti-epidemic support team and immediately mobilized for pandemic-related construction, donating more than 50 aerial work platform units free of charge to Wuhan Leishenshan Hospital, Beijing Xiaotangshan Hospital, and Zhengzhou Xiaotangshan Hospital. For its significant contribution to the national fight against COVID-19, the company was listed by the National Development and Reform Commission as a key enterprise for pandemic prevention and control.

Through years of accumulated experience, Zhongneng Lianhe has built up extensive industry data and developed a full-chain online transaction closed-loop system covering logistics, services, spare parts, and centralized procurement. By breaking down industry barriers, it provides digital support and empowerment to upstream and downstream industry chains, creating an entirely new industry ecosystem. At the same time, Zhongneng Lianhe is developing its second growth curve according to the company's established strategy.

From the perspective of China's engineering equipment industry, the sector currently encompasses 20 major categories, 109 groups, 450 types of machinery, and tens of thousands of models, with a fleet exceeding 9 million units and total asset value surpassing RMB 3 trillion — growing at an annual rate of 10%–15%. China is one of the countries with the most comprehensive range of engineering equipment categories and varieties globally. Meanwhile, the engineering equipment rental market remains highly fragmented, with total market size exceeding RMB 1 trillion, continued fleet growth, and steadily increasing rental market penetration.

According to relevant statistics, in 2020 China became the world's largest engineering equipment rental market with scale exceeding RMB 720 billion. The service market exceeded RMB 70 billion, new and used equipment sales surpassed RMB 300 billion, and finance and insurance markets exceeded RMB 400 billion — indicating boundless potential and room for growth.

Yang Tianli, co-founder and CEO of Zhongneng Lianhe, stated that the construction machinery industry is undergoing three major trend-driven transformations: from "Made in China" to "Intelligently Made in China," from supply-driven to demand-driven, and from domestic supply to global supply. Under the influence of these three structural shifts, a historic industry opportunity is emerging.

Zhongneng Lianhe has ten years of industry heritage. In September 2014, it began experimenting with new business models and internet technologies to empower the industry. After two years of testing and validating four different business models, in August 2016 it decided to enter through self-operated aerial platform rental, using internet technology to standardize, digitize, and data-enable operations while connecting the entire industry chain. After four years of effort, in early 2020 it launched its platform strategy, dedicated to building a one-stop engineering equipment rental platform, establishing industry transaction standards and digital empowerment, and connecting industry supply and demand to reduce costs and improve efficiency. Throughout this process, our customer-first, open and altruistic, innovative and iterative mindset has taken root throughout the organization, forming Zhongneng's unique cultural DNA — which will remain our greatest source of sustained momentum.

Prior to the C2 and C3 rounds, Zhongneng Lianhe completed its C1 round with SPIC Industrial Fund, representing state capital's confidence in the massive blue-ocean market of China's engineering equipment industrial internet, as well as full recognition of Zhongneng Lianhe's industry position. In the C2 and C3 rounds, all existing institutional shareholders continued to increase their substantial stakes, having witnessed Zhongneng Lianhe's strategic planning and execution since 2018 — a testament to their trust and confidence. We also thank our new shareholders for their trust and support.

Following this financing, Zhongneng will continue to increase investment in digital technology R&D, strengthen platform construction and supply chain capabilities, and continue using digital means to drive industry transformation, contributing "Zhongneng power" to the healthy and sustainable development of the industry while creating new value for customers, partners, and the industry at large.

Yi Cao, founding partner of Source Code Capital, commented: "Zhongneng Lianhe is a frontrunner in the industrial internet sector and a representative enterprise in the intelligent transformation of construction machinery. Through continuous innovation and iteration, the company has reconstructed a new ecosystem for the rental industry. In terms of business model, Zhongneng has successfully completed its transformation from self-operated business to a platform model, covering more categories of construction machinery, multiple service types including dry and wet rental, and various customer segments ranging from large to medium and small. This has become known in the industry as the 'Zhongneng Model.' In operational terms, Zhongneng has connected the full lifecycle of the construction machinery industry — circulation, rental services, maintenance, and recycling/remanufacturing — improving turnover efficiency and utilization rates, and providing customers with comprehensive solutions. In terms of team and organization, the company has continuously evolved its organizational structure, attracting large numbers of outstanding talent from within and outside the industry, achieving industry-leading operational efficiency. Yang Tianli, CEO of Zhongneng Lianhe, is a resilient and daring entrepreneur with a spirit of innovation. Since Source Code Capital first engaged with Zhongneng Lianhe in 2018, we have been firmly optimistic about the company's long-term development and have continued to increase our investment. Going forward, we will continue to support Zhongneng Lianhe in becoming the most influential brand enterprise."

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