12 years, revenue increased more than 74 times, net profit increased 40 times.

12 years, from the inverter started, gradually grew into today’s industrial control giant, the application of process technology across the industrial automation, elevator, new energy vehicles, rail transit and other fields, is the world’s share of the first elevator integrated controller supplier, the domestic share of the first servo system and high voltage inverter supplier, the global new energy passenger car motor controller leader……

How does Huichuan technology break through step by step and achieve rapid growth?

In the face of this problem, Song Junen, vice president of technology and secretary of the Board of directors of Huichuan, believes that the reasons include: “deep cultivation of the industry, seize the opportunities brought by the rapid development of each industry segment”, “the advantages of” guarantee delivery “and” product comprehensive solutions “and” continuous organizational change, management optimization, and actively respond to changes in the external environment with a process and efficient organizational form.” Ensure stable profitability of core products.”

In addition, in Song Junen’s view, the capital market is crucial to the development of the company, which not only makes the level of corporate governance continue to improve, but also brings a series of development opportunities to the company, including brand building to expand the market, increase financial strength to attract international talents, and provide help for the company’s long-term development.

Huichuan Technology was listed on the GEM of Shenzhen Stock Exchange on September 28, 2010. In the year of listing, the operating income reached 304 million yuan and the net profit returned to the mother was 103 million yuan. After more than ten years of development, in the latest year’s financial report data (2022), the aforementioned indicators reached 23 billion yuan and 43.19 billion yuan respectively.

Among them, from 2010 to 2021, the compound growth rate of the company’s operating income reached 34.75%, and the compound growth rate of net profit attributable to the mother reached 28.83%. If according to the issue price of 71.88 yuan/share at the time of listing, 108 million shares after the issue, the total market value of the company was about 7.763 billion yuan, but as of June 14, 2023, the total market value of Huichuan Technology has increased to 157.141 billion yuan, an increase of nearly 20 times.

While leveraging the capital market to achieve better development, Huichuan Technology also attaches importance to rewarding investors. Since the listing, Huichuan Technology has accumulated 13 cash dividends, with a total amount of 5.636 billion yuan.

“Three financing” and “six equity incentives” help strategic transformation

According to Song Junen, at the beginning of listing, the company formulated a transformation and development strategy, which mainly includes five dimensions:

First, it extends from a single inverter product supplier to a comprehensive industrial automation control product and overall solution supplier; The second is to extend from the traditional equipment manufacturing industry to the emerging equipment manufacturing industry, heavy equipment manufacturing industry and new energy field; Third, it extends from technology marketing to brand marketing. Fourth, from internal development to external merger extension; Fifth, by focusing on the domestic market to extend to overseas markets.

“With the capital and brand advantages brought to the company by the capital market after listing, the company successfully completed some strategic transformation goals and achieved rapid development.” Song Junen said.

Public information shows that since the listing, Huichuan Technology has implemented 3 financing and 6 equity incentives.

In the three financing, the net capital raised by the IPO was about 1.858 billion yuan, which was mainly used for capacity expansion, investment in technology center and marketing network center, investment in mergers and acquisitions and construction of office space, among which a number of acquisitions laid the foundation for the development of Huichuan technology servo business.

In April 2011, Huichuan Technology used the raised funds to invest 30 million yuan to acquire the overall assets of Changchun Huitong Electronics Co., LTD., and obtain the encoder technology that must be used in the servo system. On this basis, the company has overcome the higher digit encoder technology and improved the performance of the servo system; In March 2012, the company invested 16.5 million yuan to establish a joint venture company Jiangsu Huicheng Motor Co., LTD. Through this investment behavior, it plays a key role in improving the quality and supply ability of servo motors.

In September 2013, Huichuan Technology also used the raised funds of 11 million yuan to acquire 40% of Ningbo Yishitong Technology Co., LTD., so as to master the control technology of injection molding machine, further consolidate the company’s leading position in the injection molding machine industry, and make technical reserves for the arrival of the era of all-electric injection molding machine.

According to Song Junen recalled, through the investment and acquisition and continuous research and development investment after listing, the company’s product line has been extended, and the sales of servo systems, control systems, permanent magnet synchronous motors and other products have been growing rapidly.

The annual report shows that in 2022, the proportion of inverter sales revenue of Huichuan Technology has dropped to 19% of total revenue. The company has not only mastered the core technology, narrowed the gap with the international mainstream brands, but also can provide customers with servo system, control system, encoder, permanent magnet synchronous motor, human-machine interface and other products, and its market position has been rapidly improved.