?
In the next three sessions, you'll also gain a more concrete understanding of two common sense investing practices:
1. Financial performance can either mislead us by not reflecting a company's tremendous growth potential, or it can warn us by revealing potential risks beneath the apparent prosperity.
2, to see whether a company has long-term growth potential, that is, whether it has long-term investment value, can not only look at the short-term momentum of its performance, but also from the industry level and the company's own level of longer-term consideration.
A star company and bad financial indicators
Anyone who has considered investment opportunities in the field of industrial robotics must know Exton. It's a star company in the industrial robotics field and is known as the little Fanuc of A-shares. It was founded in 1993 in Nanjing, the ancient capital of the Six Dynasties, and in March 2015 it went public. If you know a little bit about analyzing financial indicators, you will definitely frown when you open your stock software and see the key financial indicators of Exton:
There is no harm in comparison, let's first look at the data of its comparable company, Huechuan Technology, and then look at the same data of Exton, and you'll understand why we say that Exton's financial indicators are bad:
Huechuan:
Exton:
Exton:
A company that has been listed for more than two years now, it's a company that has been in the market for more than two years.
A company has been listed for more than two years, and ROE, the core indicator of the company's profitability, is still declining; operating cash flow per share has been negative for several consecutive reporting periods, so where is the ability to generate cash flow from the main business? On the other hand, Huichuan's ROE is close to four times that of Exton's, and its operating cash flow per share is basically positive.Terminology: ROE = net profit/net worth, reflecting a company's ability to generate net income from its net worth, and measuring the efficiency of a company's use of its own capital.
So what's the attraction of getting attention for a company whose key financials don't stack up?
Second, windfall industries and bulls turn the gears of Exton's new destiny
It starts with Exton's previous history and the addition of a bull. Mr. Wang's industry analysis in each issue of the first quarter of this year will talk about the great impetus played by a bull to the development of the industry, and sometimes the turnaround of a company's fate is also a bull played a key role.
2.1 Operation bottleneck
Exton's previous products were three series of CNC systems, electro-hydraulic servo systems and AC servo systems. After the last sharing about the industry, you should be able to quickly respond that this is exactly two of the three core components of the robot, the control system and servo system technology accumulation. The point to emphasize here is that Exton has always taken the route of technical support, and can achieve results in the field of servo systems dominated by international giants is the embodiment of how many years it has insisted on technological research and development.
Among them, the CNC system was the company's most important source of income at that time, accounting for more than 50% of the revenue. And what is the market pattern of CNC systems? At the time of the listing of Exton, mid-range CNC systems in the field of domestic brands in the domestic market share of only 35%, and even more than 95% of high-grade CNC systems rely on imports. However, Exton in the field of segmentation also did the boss, in the field of domestic metal forming machine tools, Exton CNC products market share of up to nearly 9%, electro-hydraulic servo products market share of more than 3:
But a single segmentation of the overall market size is limited after all, even if Exton to do the field of the boss, it is the 2011-2014 total operating income of only 4,500,000,000 yuan. And the metal forming machine tool industry is greatly affected by the fluctuations of the economic cycle, Exton's main income from the field of the result is that the listing of the first three years of the financial situation is very miserable:
We know that the 2011-2014 years, the domestic economy is down, the global economy is not good, unlike today's global are shortcuts and all kinds of upward adjustment of the expectations, so the whole environment is not good, machine tools and other machinery manufacturing market demand suffered a lot. The market demand for machine tools and other machinery and equipment manufacturing was hit very hard, which directly led to Exton's operating profit being cut in 2012. In addition, there is inventory backlog, customer payback situation and deterioration of operating cash flow situation.
At this bad stage, the government's subsidy income and tax rebates showed their great value in the critical period of the enterprise, and they supported Exton to a large extent in these years. As we can see, this type of income accounted for as much as 70% of Exton's total profit in Jan-Sept '14! From this point we can also see that a country's industrial policy for the development of high-tech enterprises to support the important role of the government's support, if there is no government support, Estun at that time the situation can be imagined, we think this is also Mr. Wang repeatedly emphasized the importance of industrial policy, one of the reasons.
2.2 Bulls
At this point, it's like the last time we wrote about 4D Tuxin seizing the windfall of the self-driving era at a time when its fortunes were bleak. On top of the original CNC system and servo system technology accumulation, a super bull to join the industry is seriously limited by the gorgeous transformation of Exton, directly into the field of industrial robotics this huge prospect.
Who is this person? Dr. Wang Jiegao, known by CCTV as China's "man behind the industrial robots", to understand his curriculum vitae, you will be called too cow:
So, from the mechanical design of the robot, software design, motion control to the entire system design, Dr. Wang Jiegao has a wealth of experience. This kind of bull finally returned to the embrace of his motherland in 2008, and then met the boss of Exton in 2011. At that time, is considering the transformation of Exton has set its sights on the robot, but suffered from the lack of sufficient technology and corresponding experience, and Dr. Wang also saw Exton in the robot core components of the technical reserves, so the marriage was successful. Soon after, in 2011, Exton funded 20 million yuan, and Wang Jiegao jointly established Nanjing Exton Robotics Engineering Company Limited, which is now a subsidiary of Exton listed company. Dr. Wang Jiegao served as general manager and chief engineer, and set up a research and development team.
The main products of Exton before, used for CNC machine tools CNC system and AC servo system, although it is the two core components of industrial robots control system and servo system technology accumulation. However, to make industrial robots or lack of a lot of corresponding technology and experience, especially software control capabilities, it is difficult to rely only on the original technical team to successfully realize the breakthrough of industrial robots. However, the addition of Dr. Wang Jiegao, who has accumulated profound technology and experience in various aspects of industrial robots, has enabled Exton to smoothly launch the development and production of robots. Within three years, we have developed 7 robots with independent intellectual property rights on these two core components, including 6-axis general-purpose robots, 4-axis palletizing robots, SCARA robots, DELTA robots, servo manipulators, etc., which have been put on the market.
Six-axis robot:
Four-axis palletizing robot:
SCARA robot:
The successful development of these seven robots directly fills the domestic robot industry's technological gaps in a number of core components such as servo motors and motion controllers. The result of adopting self-developed core components for Exton's robots is that their selling price is only half or even less than that of their foreign counterparts! This has directly led to a significant drop of more than 30% in the selling price of robots from several major international robotics companies in FY14 and FY15! Let's share in the last mentioned as long as the Chinese enterprises to break the past has been monopolized by foreign technology, its product price can be instantly than foreign counterparts out of a large section of the situation appeared, right? I can't help it, the two core components are produced by myself, I can be so capricious, I want to reduce the price on the price, otherwise how to go with your big brothers to steal the market.
However, at this time, Exton's robots are still in the stage of small batch production and trial production, the scale of revenue is still very limited, and Exton Robotics, which was founded in 2011, has just begun to turn a profit in the second half of 2015. At the same time, the robotics business also required significant investment in research and development and the construction of robot production lines, as well as the establishment of a sales network. According to Exton's project planning at the time, the future funding needs for major capital expenditures exceeded 300 million yuan. Such capital needs for the original business scale of 400-500 million yuan at most for Exton, it is difficult to solve through bank loans, not so large credit line. Fortunately, at this critical moment, the door of the capital market is open to Exton, the success of the listing in March 2015 to raise funds for the progress of the Exton robotics project has played a huge role in thrust:
Listed fund-raising projects:
2.3 Challenges and opportunities to co-exist under the establishment of a new development strategy
The success of the listing does not mean that the next thing is smooth. It's a good thing that the company has been listed. In the listing of 2015, Exton is facing the great challenge of the development of the equipment manufacturing industry and industrial robotics industry to usher in the great development of the industry's great opportunities, challenges and opportunities coexist.
On the one hand, in 15 years, the downward pressure on our domestic economy continued to increase, and market demand in the traditional equipment manufacturing industry remained sluggish. Also accounted for the company's revenue absolute big head of metal forming machine tools CNC system and electro-hydraulic servo system business by very unfavorable impact, 15 years of the first quarter, the second quarter, the third quarter, as well as the annual operating income and deducted non-net profit are losing ground:
At the same time, the domestic robotics industry is developing rapidly. 2015, the world every production of 4 units of robots there is one in China, the domestic Although robotics companies are springing up under the trend of policy subsidies, there are only a handful of companies that can independently develop core components. So, Exton's breakthrough in core components for industrial robots put it in the spotlight, and its visibility surged! So, in the midst of poor business and financial conditions, Exton, with the halo of owning the R&D and production capacity of core components for industrial robots, was sought after by the market. In June 2015 on the eve of the stock market crash, in the overall market frenzy hostage and a certain IPO effect, Exton shares from the March 20 listing opening price of 8.16 yuan rose to a maximum of 129.82 yuan on May 28, just more than two months or more up 16 times!
Putting aside the short-term fluctuation of the stock price, the popularity of the big increase in the development of the company is a real benefit: for example, the government's support will be increased; also by the industry upstream and downstream focus of the enterprise's attention, strategic cooperation, in particular, with the industry's major customers to cooperate with the opportunity to significantly increase. The RV speed reducer used by Exton robots is also purchased from the Japanese monopoly company Nabtesco, which has become the largest customer in China, and bargaining power comes out at this time. 15 years, Exton industrial robots and intelligent manufacturing system solutions into a number of industries, including home appliances and new energy industry benchmark enterprises, such as Gree. The revenue share of this segment, though still far below the company's traditional business, has shown great growth prospects, with the share of total revenue having more than doubled rapidly to 16.32% compared to 7.76% in FY14, and the related revenue growth as high as 98.55%:
On such a backdrop, Exton, in the new stage of its development after landing in the capital market, established what it calls the "
Two core businesses: Intelligent Equipment Core Control Functional Components, Industrial Robots and Intelligent Manufacturing Systems.
Two development paths: endogenous development, epitaxial development
Say a few words about these two core businesses, intelligent equipment core control functional components, refers to the control system, servo system such functional components; industrial robots and intelligent manufacturing system, in which the industrial robot is the robot body, the intelligent manufacturing system can refer to both the production line of a particular functional module of the This intelligent manufacturing system can either refer to a specific functional module in the production line, or refer to the overall system of a complete production plant, that is, the downstream of the industry introduced in the last industry sharing involves specific applications of system integration and intelligent manufacturing. In other words, Exton can provide the core control function components of intelligent equipment alone, and other downstream companies doing robot body and system integration that lack core component production capacity, as well as companies doing other intelligent equipment such as CNC machine tools, can buy these core function components from it; it can also provide industrial robot body that integrates its own core components, and customers in this regard should mainly be system integrators; furthermore, intelligent manufacturing can also refer to the system integration and intelligent manufacturing that involves specific applications in the downstream industry, which was introduced in the last industry sharing. The customer in this regard should mainly be the system integrator; furthermore, the intelligent manufacturing system, it is possible to design and integrate the entire production line directly for the downstream factories of various industries.
Now, can you feel the future development path of Exton clear up? If you do not feel, I will give you a repeat: with independent core technology of domestic industrial robotics industry as the main engine of future development, but the vision is not limited to this, can directly serve the end-use customers, with a broad market space for the next strategic development goals of intelligent manufacturing systems.
And in order to support these strategic objectives, as well as constantly improve the technical level of industrial robots, in the listing of the year, Exton also opened the acquisition of M&A of the road of external expansion.
Three, open the road of expansion and internationalization
Unlike other companies along the way acquisition of mergers and acquisitions, the acquisition of this matter in the history of Exton is still very fresh, although 93 years was established, but after all, 15 years before the listing of the 15 years, 15 years before the layout of the significance of the acquisition of a decent, but also just established the strategy of external development, so look, Exton is not to give a very fresh feeling. At a glance, doesn't Exton give people a feeling that it is still very young? Don't worry, it will soon become an old driver.
In the trend that all industries will be profoundly changed by artificial intelligence, Exton is not only promoting the independent research and development of its robot core components, but also further promoting the intelligence of its robots.
In terms of robot intelligence, machine vision is a key factor in upgrading existing robots from automation equipment to intelligent machines. 2015 Exton announced the acquisition of Euclid Labs SRL of Italy, which is engaged in the research and development and production of 3D vision technology for robots, with the intention of realizing intelligent vision applications for robots, which was formally completed in February 16th. The acquisition was officially completed in February 16, and its self-developed 2D vision system has already been sold in volume in the 3C industry in 15 years. As introduced in a previous sharing about the industry, 3C industry is an important opportunity area for China's industrial robots. In 15 years, Exton has already focused on the electronic machinery industry and 3C industry, and in addition to the vision system, it has made breakthroughs in the application of its complete motion control solutions in the robotics and electronic machinery industries.
In 16 and 17 years, Exton made more acquisitions to enhance the performance of its industrial robots, broaden the application areas, and to realize the strategic goal of providing customers with total intelligent manufacturing systems, as well as refinanced and put into production more new projects in the capital market. Its status as a listed company and its ability to leverage the capital markets to fuel its business development has appeared to be in good hands.
In 2016, it acquired Shanghai Plex and Nanjing Feng Yuan, both of which were mainly for the purpose of expanding downstream product lines and cutting into mainstream automotive OEM customers.
The acquisitions in 2017 particularly demonstrated Exton's momentum and potential for internationalization:
In February 2017, it wholly acquired TRIO in the UK, which has been y engaged in industrial automation and motion control for nearly 30 years, and high-precision motion controllers are its strong point. This acquisition is equivalent to enabling Exton to obtain the upstream technology of its core components, opening up the upstream and downstream industrial chain of the core components of intelligent equipment, and possessing a stronger core robot technology capability than in the past; on the other hand, it can sell its own servo system to TRIO's original customers as a bundle, and you'll understand with a little popularization here that the complex servo system applied to high-end multi-axis robots includes drives, The complex servo system used in high-end multi-axis robots consists of drivers, host computer, motion controllers, servo motors, and TRIO's original customers just buy the motion controllers from TRIO, while Exton acquired TRIO, you can provide these customers with the entire servo system, so as to obtain more customers. This is a cost-effective acquisition that kills two birds with one stone! With TRIO's advanced technology and influence in foreign markets, Exton will formally enter the ranks of international first-class motion control manufacturers, laying the foundation for future attacks on the mainstream motion control market in Europe and the United States.
In April 2017, the acquisition of the Massachusetts high-tech company BARRETT TECHNOLOGY derived from the Massachusetts Institute of Technology (MIT) Artificial Intelligence Laboratory, holding 30% of the latter's shares. BARRETT focuses on micro servo drive (5cm size), human-machine collaboration intelligent robots and medical rehabilitation robotics research and manufacturing. BARRETT This acquisition is of great significance to Exton's advancement: through the acquisition of BARRETT, the company can master the key technology of integrated micro-servo system, which lays the foundation for entering the high-end servo applications monopolized by foreign companies, including providing core components for some service robots; at the same time, the layout of the artificial intelligence, which will help the company to enter the human-machine collaboration robots and intelligent robots; in addition, given that the company has a strong position in rehabilitation robots, BARRETT has a 30% stake in the latter. In addition, given BARRETT's technological advantage in rehabilitation robotics products, it also creates conditions for entering the huge rehabilitation and medical robotics market. It's really three birds with one stone!
Inside this acquisition, we need to focus on BARRETT has a micro-servo system technology, what is a micro-servo system? It is a highly sophisticated technology in the field of motion control. It is applied in general industrial robots on the body of the servo system compared to the higher-order technology, requiring higher motion accuracy, torque is smaller, the size of the component is also smaller. For example, in the surgical robots, some service robots on the application of such robots is obviously not suitable for application in large industrial robots on the servo system; there are some high-end manufacturing areas of high precision requirements of robots also need miniature servo system. The control of the force requires a smaller, more accurate natural difficulty, this technology is only a very few companies in the world to master. If Exton succeeds in mastering this technology through the acquisition and can be better applied, it can not only broaden its high-end application market in the industrial field, but also to the field of service robots and medical robots outside the industrial field. If all goes well, it means that Exton may become a robotics company with more advanced technology, a richer product line and customer base, and thus more strength. In the announcement, Exton said it plans to set up a new joint venture with BARRETT TECHNOLOGY*** in China to develop the domestic application market for micro-servo systems, human-robot collaborative intelligent robots and rehabilitation robots. I think the significance of this acquisition in particular shows the momentum of Exton's evolution to a more complex ecosystem of companies, as for the actual progress of the latter will have to rely on continued attention.
In September 2017, it acquired a 50.01% stake in M.A.i., a German company founded in 1999 that has amassed a top-notch technology and customer base in the field of automated and intelligent manufacturing, for €8,869,900 million. To give you an idea of who M.A.i.'s main customers are, there are Valeo, ZF, Infineon, Brose, Demag, Johnson Controls, Foton, etc., all of which are well-known European automotive suppliers and companies in the fields of semiconductors, machinery, etc., but the company's main market is limited to Europe. This acquisition is Exton's industrial chain around its smart manufacturing system integration business. The purpose of Exton's large acquisition of M.A.i. is to gain quick access to the latest technology in smart manufacturing and Industry 4.0 in Germany. With the help of M.A.i.'s products and technology platform, it will promote the transformation of its robot system integration application from low-end to high-end, and enter the intelligent production line, digital workshop, and digital factory business under the German Industry 4.0 standard. Let the German advanced technology grafted to China's huge market, to promote their own market expansion. In addition, the company can also be used as a base to start the promotion of Exton robots in the European market. It is also a very strategic acquisition.
From Exton's acquisitions in the past two years, on the one hand, we can see the specific significance of these acquisitions for Exton: its domestic acquisitions are mainly to broaden the product line; and its foreign acquisitions are either to thicken the technical strength, or both technology and market. On the other hand, these acquisitions also clearly show Exton's strategic layout: to build the competitiveness of the whole industrial chain from core components and robot bodies to large-scale intelligent manufacturing systems and digital factories. Like its main competitors, the leading robotics companies at home and abroad, this is an inevitable path for robotics companies with a long-term strategic vision against the backdrop of the huge demand for automation and intelligent upgrading of the manufacturing industry.
To summarize:
1, today we see how Exton in the original technology accumulation plus the help of cattlemen break through the limitations of the small industry, with industrial robots two core components of the research and development of production capacity of the strength of the posture into the industrial robotics industry has a broader future of the big industry. Its industrial robotics-related business has a low percentage but high growth rate of the image shows its great prospects.
2, in addition, we also see that Exton in the listing year of both challenges and opportunities, the establishment of two core businesses, two development paths constitute the "dual-core double-wheel drive" strategy, this strategy guides the future of Exton.
3, finally, we are more to see Exton skillfully use the identity of the listed company to leverage the capital market for large-scale mergers and acquisitions integration. These acquisitions not only bring Exton more high-end technology and upstream and downstream technology, but also make Exton directly or indirectly access to more market opportunities. From this we can see: Exton from the core components, robot body to large-scale intelligent manufacturing system and digital factory of the whole industry chain, and even cross the industrial application field layout, which reflects Exton's long-term strategic vision and ambition.
Next time, I'll continue to introduce you to Exton's marketing network, the explosion of its industrial robotics business, and some of the pitfalls that accompanied the boom, and I hope you'll continue to explore with me!