Enterprise performance analysis:
• Huichuan Technology has achieved steady growth in the general automation segment, new energy vehicles and international segment, becoming an important engine to promote the overall performance growth.
• In addition to the steady growth of the traditional advantages of the control technology, the development of new application fields has achieved rich results, and overseas orders have also made breakthroughs.
• By increasing R&D investment and continuously optimizing product design scheme and cost structure, Vitron Electric has achieved cost reduction and efficiency increase.
• Inwitten has achieved remarkable results in market expansion, especially in the industrial automation project market.

PXI-7854R Overall, the automation market is still facing challenges, the overall growth of the industrial automation market in 2023 is weak, the emerging areas of lithium and photovoltaic industries have contracted, external demand has weakened, and the time and speed of the automation market recovery is uncertain. Although Chinese automation companies showed positive revenue growth in 2023, this did not fully offset the various challenges and uncertainties within the industry. In the first quarter of 2024, China’s automation market entered the late stage of destocking, but the demand for new orders from suppliers is still weak, and it is still unknown whether listed companies other than the head can usher in an improvement in the next three quarters.

On a global scale, competition in the automation industry and fluctuations in market demand also affect foreign companies. Omron, a Japanese maker of electrical and electronic equipment, for example, has faced similar adversity. At the end of February 2024, Japanese electronic and electrical equipment manufacturer Omron announced that it would lay off 2,000 employees in 2024, including 1,000 in Japan and 1,000 overseas. According to the Nikkei, this is only the second major layoff in Omron’s 90-year history, surpassing the 1,460 layoffs in 2002 after the dot-com bubble burst.

In its latest fiscal 2023 forecast (April 2023 to March 2024), Omron cut its consolidated net profit forecast by 98% year-on-year to $9.976 million. The lowered forecast reflects a number of issues that need to be improved, and Omron’s obvious solution to this problem includes reducing personnel expenses.

PXI-7854R

Despite its deep industry background and technology accumulation, Omron had to announce a massive layoff plan in early 2024. This phenomenon reflects the fact that even market leaders need to adjust under the pressure of the global economy to cope with the ongoing market contraction and cost pressures.

05

2024 Full Year Forecast

PXI-7854R What are the main aspects of warming?

At present, the outbreak of the global economy has intensified, and the problem of insufficient external demand facing China has become increasingly prominent. In order to address this challenge and consolidate the economic foundation, China has adopted a series of internal stimulus measures, and the recent large-scale equipment upgrading and consumer goods for new action plans will be gradually implemented. As of April 25, 2024, many places and departments have issued policies to support “renewal and renewal”; Among them, the Ministry of Natural Resources recently issued the “Guidance on Strengthening the construction of a new round of mining breakthrough strategic action equipment”, the document proposed to form a batch of mining equipment replacement list, guide exploration units to gradually replace equipment; At the same time, Beijing, Tianjin, Shandong, Inner Mongolia, Fujian and other places have introduced local implementation plans or promoted the implementation of relevant work.

In addition, the policy also covers various aspects such as enhancing the security of national strategic resources and improving the quality of life of the whole people.

In 2024, science and technology security, national defense security, energy security, food security, energy saving and carbon reduction, equipment replacement, environmental protection, basic security, the Belt and Road will become the main driver of economic growth. The development of these key areas will not only help solve the current external pressure, but also lay a solid foundation for the long-term development of the Chinese economy. Whether the overall automation market can pick up in the three quarters after 2024 depends on the following key areas.