The following is the full text of the report:
China's economy is a vast ocean with ample potential and wide room for manoeuvre; It is also like a vast land that breeds infinite vitality. Growing here, it can always find a strong and resilient force to withstand wind and rain.
Today, we are launching the seventh installment of a series of reports on "Resilient Growth" - Guangdong's Road to Breakthrough for 'High Resilient Enterprises', which tells about Risong Technology's efforts to overcome difficulties and find a way to break the trend of growth in recent years.
With the rapid growth of the new energy vehicle industry chain business and business expansion in the general industrial intelligent manufacturing field, Risong Technology achieved a significant increase in net profit in the first half of this year, representing the best performance since its listing.
In the past two years, Sun Zhiqiang, Chairman of Risong Technology, has summarized the development of the company in three words: innovation, struggle, and starting again. Innovation: Risong Technology expands new industrial fields and finds new growth points; Struggle, the pursuit of innovative technology cannot be separated from the spirit of struggle and firm will; Starting again, every success is phased and temporary. We must always be on the road and constantly pursue higher goals.
Sun Zhiqiang said that a resilient enterprise, no matter what difficulties and shocks it faces, can still bounce back quickly, maintain normal operations, and continue to grow. "In the uncertain environment, enterprises should emphasize their own differentiation, keep pace with the times, find their own positioning, adhere to their own strategy and direction, do not forget their original intentions, and persist in going forward."
Sun Zhiqiang, Chairman of Risong Technology. The interviewee provided a picture.
Adjustment of the automotive industry, pressure transmitted upstream
In February 2020, Risong Technology successfully landed on the science and technology innovation board, becoming the fourth Guangzhou enterprise to land since the opening of the science and technology innovation board. At that time, it was known as the "first unit of resumption of work" in Guangzhou after the outbreak of COVID-19. The listing has also become an important milestone in the development history of Risong Technology.
As a company specializing in industrial robots and intelligent manufacturing equipment, Risong Technology's customers are mainly concentrated in the automotive industry, and it is the largest R&D manufacturer of automotive equipment technology in China. However, since 2018, the global automotive industry has entered a period of adjustment, and its prosperity has declined, indirectly affecting the market demand of the robot and intelligent manufacturing industry where Risong Technology is located.
At the same time, the sudden arrival of the epidemic has disrupted many of the company's development plans and arrangements. Sun Zhiqiang frankly stated that the company has been undergoing tests since its listing. "Our field of intelligent manufacturing equipment mainly relies on products to serve the manufacturing industry. In the past two years, the traditional manufacturing industry has been greatly affected, and we have also had anxiety about the impact on industries using robots and intelligent manufacturing equipment. Especially at that time, the automotive manufacturing industry was also facing a state of sluggish development."
During the epidemic, Risong Technology faced many challenges, such as the import of key components and chips, and poor logistics affecting order delivery. Many key components in Risong Technology's products are imported, and cannot be obtained in a timely manner after the international supply chain is affected. The second is the production and manufacturing of industrial robots themselves, as well as the cost issue. The epidemic has highlighted the demands of the manufacturing industry for improving efficiency and product quality. The rapid growth in demand for industrial robots has further intensified supply chain competition, driving up production costs.
"Of course, looking back now, the country's epidemic prevention efforts are very strong, and people's livelihood and industrial development have been prioritized. A series of stimulus policies have been introduced, which has gradually restored our confidence," Sun Zhiqiang said.
With the gradual recovery of the supply chain, the automotive manufacturing industry is also recovering synchronously. The rise of new energy vehicles and intelligent connected vehicles has pushed the development of the entire automobile industry into a new growth stage. The fixed assets investment of vehicle manufacturers has gradually returned to normal, and the production line of fuel vehicles has entered an intensive renovation cycle, driving the development of upstream and downstream industries, including high-end equipment manufacturing.
In the first half of this year, orders for the new energy vehicle industry chain business of Risong Technology grew rapidly, accounting for about 51.67% of operating revenue. In the first half of 2022, Risong Technology achieved an operating income of 585 million yuan, a year-on-year increase of 26.83%. More importantly, its net profit increased by 70.53%, reversing the situation of increasing income without increasing profit in the past two years.
Flexible production line for intelligent manufacturing of automobiles. The interviewee provided a picture.
Actively expand business and enter new tracks
In Sun Zhiqiang's view, when facing an unstable environment, enterprises need to adjust their development models, take a dialectical view of the current environment, find their own positioning, and plan for the future.
In order to balance the impact of fluctuations in the automotive industry and make the company's business development structure more reasonable, in the past two years, Risong Technology has actively developed general industrial businesses while maintaining stable growth in the automotive industry, with a rapid growth rate. "The automotive industry is the most widely and leading industry in the application of robotics and intelligent technology. Having mastered the advanced technology of automotive intelligent manufacturing, there is absolutely no technical problem in expanding into fields such as general industrial intelligent manufacturing." Sun Zhiqiang said.
In view of its previous accumulation in intelligent welding, intelligent assembly, intelligent testing, and intelligent logistics, Risong Technology has further expanded its business in the fields of mechanical heavy industry, rail transit, 3C electronics, and particularly in the field of mechanical heavy industry. It has established business cooperation with some leading enterprises such as Sany Heavy Industry, Zoomlion Heavy Technology, and Shanhe Intelligent. Currently, in the revenue plate of Risong Technology, the revenue ratio of the automotive industry and the general industry is basically the same.
At the same time, Risong Technology decided to enter the domestic industrial software circuit. Last August, Risong Technology established a wholly-owned subsidiary, Guangzhou Feishu Industrial Software Co., Ltd., which focuses on the development, sales, service, and industrial ecological construction of industrial software and platforms for research and development, design, and manufacturing, and is applied to the domestic high-end equipment and intelligent manufacturing fields.
To this end, Risong Technology has invested the original research and development teams related to digital information technology and software, as well as some intelligent manufacturing research and development designers, into Feida Industrial Software, accelerating the introduction of industrial software research and development and sales personnel, and expanding the scale of the industrial software team.
"Our research and development of industrial software is based on our understanding of the manufacturing industry over the past decade." Sun Zhiqiang said that Risong Technology has also used a large number of internationally renowned industrial software, and is fully aware of the advantages and pain points of existing software, hoping to further meet the demand through research and development. The product can not only be used by oneself, but also be sold externally, becoming a new business growth point.
In addition, Risong Technology has further developed the machine vision business segment, laying the foundation for providing integrated intelligent manufacturing solutions through hardware, software, and services in the future.
In 2021, Risong Technology was selected as a national specialized new "Little Giant" enterprise. Currently, the R&D investment of Risong Technology accounts for about 5% of the total revenue. Next, as the investment in business sectors such as industrial software, machine vision, and new materials and processes increases, Risong Technology will continue to increase the investment in talent and technology research and development.
