In addition, the overall revenue of industrial rich Union in recent years has stagnated, which is another major incentive for the depressed stock price. According to public information, from 2017 to 2019, the revenue of Industrial Fulian was 354.5 billion yuan, 415.3 billion yuan and 408.6 billion yuan, respectively, and the total revenue of Industrial Fulian in 2019 did not rise but fell, which is showing this embarrassment.

2711P-B15C4D8 And this embarrassment is also indirectly transmitted to the industrial Fulian stock price, so that investors are not very optimistic about its growth. So far, the market value of industrial Fulian still stays at 271.3 billion, which is in stark contrast to the 383.8 billion market value of its counterpart Lichun Precision.

Invest heavily in intelligent transformation

In order to meet this challenge, Industrial Fulian is carrying out intelligent transformation through years of accumulated manufacturing experience and customer layout.

2711P-B15C4D8 Li Junqi, chairman of Industrial rich Union, said in the previous earnings results meeting that industrial Rich Union needs to achieve intelligent manufacturing “soft and hard integration”, hardware refers to equipment, tools, materials, software is industrial big data, industrial artificial intelligence, industrial software, thus forming its unique industrial Internet ecology.

2711P-B15C4D8

In order to achieve this goal, Industrial Fulian has spared no effort in research and development investment in recent years. According to the 2019 annual report disclosed by Industrial Fulian, the research and development expenses of Industrial Fulian in 2019 increased by 4.76% year-on-year, reaching 9.427 billion yuan, which exceeded half of its annual profit in 2019 (18.6 billion yuan). The number of research and development personnel is more than 23,000, accounting for the proportion of the total number of people in the company increased from 9.2% in 2018 to 11.4%.

2711P-B15C4D8 With huge capital investment, Industrial Rich Union began to achieve a series of achievements in related fields. For example, in terms of 5G and AI technology, IFuilian participated in the formulation of 5G+ Industrial Internet 3GPP international standards, developed 5G small base stations, 5G modules, and launched the cross-industry Foxconn Industrial Cloud Platform (Fii Cloud). And began to export technical solutions to some giant enterprises in the industry. In terms of patents, it has more than 3,736 valid patents, most of which have been in mass production and entered the market.

In addition, the progress of technology has also directly promoted the decline of management expenses during the industrial rich union, reducing direct production costs for it, so that its entire operating efficiency can be improved.

In July, Industrial Fulian also acquired 39.97713 million RMB ordinary shares of Dingjie Software held by DC Software through an agreement transfer, accounting for about 15.19% of the total share capital of the latter, becoming the largest institutional shareholder of the latter. It is understood that the latter has unique advantages in industrial software design, research and development, operation and maintenance. The investment also paves the way for strengthening industrial intelligence cooperation between the two in the later stage.