General automation recovery, domestic substitution ushered in an important window period

Overseas recovery: Since the epidemic in 2020, downstream demand has been strong, which has promoted the revenue and operating profit of automation enterprises in Europe, the United States and Japan represented by Fanuc, Keenshi, SMC, Siemens, etc., to reach a new high. We have counted 15 important overseas automation enterprise performance announcements, and believe that there are three main reasons:
1. During the epidemic period, downstream enterprises were affected and could not work normally. After the resumption of work, labor shortage and rising wage costs led to a sharp rise in employment costs, and enterprises began to seek production equipment with a higher degree of automation.
2. The epidemic highlights the importance of uncontacted, and the awareness and acceptance of automation equipment in the downstream industry has been improved by leaps and bounds, promoting the penetration of automation into more application scenarios and processes.
3. Supply chains and production capacity disrupted or blocked by the epidemic will be compensated after normal resumption of work. Moreover, after the epidemic, the government will introduce corresponding industrial support policies, and the cost performance of “machine replacement” will continue to improve. In particular, in the first quarter of 2022, more than 11,500 robots were sold in North America, with a total value of approximately $646 million, up 28% and 43% year-on-year, respectively.

CC-PAIN01

Tracking domestic: According to the general automation data monitoring system we built, 2022Q1 was affected by the epidemic in Shanghai, and the manufacturing data showed weakness. With the alleviation of the epidemic in Shanghai and the subsequent landing of stable growth policies, General automation will usher in a recovery after the full resumption of work and production. The obvious difference with the previous round is that domestic substitution ushered in an important window period, and the certainty is stronger; The advantages of automatic subdivision are more obvious. The biggest benefits are in three directions:
• Industrial control servo, the epidemic has caused difficulties in foreign investment delivery, and downstream high-growth areas such as lithium and photovoltaic are in a period of strong capacity expansion. When the main foreign investment is difficult to cope with the situation, domestic substitution accelerated penetration;
• Industrial robots, the foreign “four big families” headquarters and important factories with a total market share of more than 40% are all in Shanghai, which is greatly affected by the epidemic. The domestic robot localization supply has been improved, and the domestic robot industry chain has been actively adjusted to fill the demand gap caused by the high-growth downstream expansion of new energy vehicles, lithium batteries, and photovoltaic in a timely manner. As the foreign-funded dominant product is a large-load heavy-duty six-axis robot, the current round of domestic replacement is also dominated by heavy-duty robots, which is expected to bring volume and price increases;
• Cutting tools and automation parts, domestic cutting tools themselves benefit from the increase in the numerical control rate of metal processing machine tools, and the combined epidemic has led to the shortage of overseas cutting tools, accelerating the import substitution of domestic cutting tools. From the downstream metal cutting machine tool sales have rebounded since May. At the same time, the essential parts and auxiliary facilities of automation equipment are also benefiting from the recovery in demand.