Although the stock price has fallen 17% this year, underperforming the broader market, Huichuan Technology is still one of the most institutional companies in the A-share market. As of June 6, this year, Huichuan Technology received A total of 902 (times) institutional research, ranking fourth in A shares.

In fact, since its listing in 2010, Huichuan technology has been closely watched by institutions. “The leading enterprise in the domestic industrial control industry”, “the leader in import substitution in the field of industrial control”… This is the brokerage in the Huichuan technology IPO of its statement. Just 3 days after listing, Hui Tianfu, Invesco Great Wall’s funds and a number of private equity products rushed to enter, and 9 of the top 10 circulating shareholders were institutions.

Huichuan technology has lived up to the expectations of the institutions and has long become the absolute leader in the field of industrial automation in China. Its total assets increased from 290 million yuan in 2009 to 39.212 billion yuan by the end of 2022, an increase of 134 times! Zhu Xingming, the founder, real controller and chairman of the board, undoubtedly deserves great credit.

Seize the opportunity, do not be martyrs

In the middle of last year, Ren Zhengfei once again put forward the “cold winter theory”, claiming to pass on the “cold to everyone”. The birth of Huichuan technology is inseparable from the first “winter” in Huawei’s history at the beginning of this century, and in this “winter”, the cold was passed to Zhu Xingming.

At the end of 2001, Huawei transferred its Anson Electric unit to Emerson of the United States for $750 million, and Zhu Xingming added work experience in foreign companies to his resume. In 2003, Zhu Xingming left to found Huichuan Technology, because most of the senior management team and core backbone are former Huawei employees, so Huichuan Technology has been called “small Huawei”.

From the initial main elevator field inverter, to later involved in general inverter, servo system, PLC (programmable controller) as the representative of general automation, and then into new energy vehicles, rail transit and robots, energy storage inverter, machine vision and other businesses. Over the past 20 years, Huichuan Technology has been expanding its circle of capabilities.

In the field of industrial automation, according to Rui Industry statistics, in 2022, the domestic market share of general servo system of Huichuan Technology is about 21.5%, ranking first, which is more than twice that of the second place Siemens; Low-voltage inverter products (including elevator special inverter) domestic market share of about 14.9%, ranking third, the first domestic brand; Small PLC products in the Chinese market share of about 11.9%, ranking second, domestic brands first.

In the field of new energy vehicles, according to NE era statistics, in 2022, Huichuan Technology’s domestic market share of new energy passenger car motor controller products is second only to BYD and Tesla, ranking third, and is the largest third-party supplier in China. The domestic market share of its new energy passenger car electric drive assembly and motor products is about 3%, entering the top ten.

In addition, the shipment of industrial robots of Huichuan Technology also exceeded 10,000 units for two consecutive years, and the domestic market share was 5.2% in 2022, ranking seventh and second in domestic investment. Among them, SCARA robot accounted for 17% of the domestic market, ranking second and first in domestic investment.

Behind the beautiful results, in addition to a long-term stable R & D investment ratio of around 10%, the more critical thing is to take a step ahead in strategy.

In a speech in 2021, Zhu Xingming proposed: To be two steps ahead of the enterprise is a martyr, and one step ahead is an opportunity. Looking at the development of Huichuan technology, this strategy runs through it.

Take the example of cutting into industrial automation. In 2003, the newly established Huichuan technology from low-voltage inverter cut into industrial automation, in 2007 set up a servo system R & D team, in 2008 launched PLC and servo products to expand the layout of industrial automation.

The layout is timely. In 2008, the total output value of China’s machinery industry exceeded 9 trillion yuan, achieving a growth rate of more than 20% for six consecutive years. At the same time, from 2005 to 2007, China’s servo industry has maintained an annual growth rate of more than 20%, but in 2008, China’s servo market size is only 2.45 billion yuan. As a comparison, the size of China’s general servo market in 2022 is nearly 23.3 billion yuan, nearly 10 times that of 2008.

This is also reflected in the layout of new energy vehicles and industrial robots. In 2016, Huichuan Technology announced its entry into the field of new energy vehicles and robots. In 2020, the outbreak of new energy vehicles began, driven by new energy and new energy vehicles, domestic industrial robots have also ushered in a period of rapid development.