This issue continues to look at the construction of its marketing network, the outbreak of industrial robot business, and some hidden dangers we have seen.
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First, upgrade products and establish a sound marketing network.
Eston's industrial robot products are constantly upgraded and advanced: intelligent and information technologies such as two-dimensional and three-dimensional vision, force control, remote service and maintenance are applied to its robot products, making the new generation of Eston robots more dexterous, safe and easy to operate and maintain.
At the same time, the mass production capacity of Eston industrial robots is not a big problem. Although the current annual production capacity is still small, the new production line has been put into production and the production capacity will continue to expand. The fundraising project "Industrial Robot and Complete Equipment Industrialization Project" mentioned in the last issue of 15 Company's listing has been basically completed, with an annual production capacity of 2,000 sets. There is also a new factory under construction, which is expected to run in 19. The first-phase target is 5,000 units, and the long-term production capacity is10.5 million units.
Its robot product performance and mass production capacity are guaranteed, but to achieve market growth, a more perfect marketing network is needed. In recent years, Eston has spent a lot of money on this, and the sales expenses have been rising continuously, reaching more than 56 million yuan in 16, and the first three quarters of 17 approached last year, reaching 54.9 million yuan.
This kind of sales investment enables Eston to have a marketing network, which can make its products and services flock to the vast market, and it is an international marketing network. As of the first half of 20 17, its marketing network is as follows: there are 26 offices and 38 joint defense points in China, and there are more than 40 motion control agents and industrial robot system integrators; There are 6 overseas molecular companies in Britain, America, Italy, Turkey, India and Eastern Europe, and more than 50 agents in Europe, Asia, America and Oceania. The international market network system has been initially established, and this marketing network has laid a solid foundation for its future products to enter the international market on a large scale and improve the brand's international influence in sales channels.
Second, the outbreak of the robot business has helped the company's performance soar.
Products with certain competitiveness, perfect marketing network, improvement of the overall economic environment, and strong demand for automation and intelligent upgrading of domestic manufacturing industry-time, place and people-are all in harmony, so it is not surprising that the following performance broke out. Eston's business has developed rapidly in 16 and 17.
Specifically, due to the rapid growth of downstream industries such as 3C electronics and new energy lithium batteries, the revenue of Eston 16 increased by 40.40%, and the non-net profit increased by 120.06%. 17 revenue in the first three quarters increased by 49.84% year-on-year, and non-net profit increased by 34. 1 1% year-on-year. It's all a bunch of thriving numbers, right? Although Eston's current revenue and profit scale are still very small, with revenue less than 654.38 billion RMB and profit less than 50 million RMB after deducting non-profit, its performance growth rate is ahead of the overall level of the industry and the main domestic competitors Huichuan Technology and Xinshida. In the first three quarters of 16 and 17, the total revenue growth rate of China's robot industry was 40% and 38% respectively, and the net profit of the industry in the first three quarters of 17 increased by 22.44% year-on-year.
Let's take a look at the independent growth rate of its robot-related sub-business: motion control and AC servo system, which increased by 43% in 16, and increased by more than 50% in the first half and third quarter of 17; The business income of industrial robots and intelligent manufacturing systems increased by 17 in the first half and the third quarter respectively 167%, 27.4% and 130%! The business of industrial robots and intelligent manufacturing systems has grown significantly. From last year to this year, the growth rate has more than doubled!
With the rapid growth of industrial robots and intelligent manufacturing systems, the proportion of this business in Eston's overall business increased from 7.76% and 65,438+06.32% in 65,438+04 and 65,438+05 to 365,438+in 65,438+06 and 65,438+07 respectively. In two years, the business related to industrial robots has grown from a small business in Eston to a real core business that supports nearly half of Eston's revenue and profits. Therefore, the growth potential of industrial robot business can be seen.
Eston's growth in the past two years is not only the rapid growth of performance. Behind the high growth of performance, with the optimization and upgrading of product service mode, application field and customer level, as well as the international expansion of the market, the specific performance is as follows:
1, from simply selling industrial robots and complete sets of equipment to your entire production line and smart factory, which greatly broadens the company's market development space.
Think about it, if Eston can only provide industrial robots, it is impossible to reach the end customers. For example, if you give some industrial robots to a mobile phone factory, people still can't produce them. What end users in all walks of life need is system integration and intelligent manufacturing system services, which can make their production lines complete. Therefore, if we can only provide industrial robots, Eston's customers will be limited to the middlemen who provide system integration services, and the market and profit scale will be bound to be restricted by it, which will also lack the opportunity to know the actual needs on the front line and then feed them back to the inside. The customized intelligent manufacturing system, which can directly provide more complete services for downstream terminal application customers, will give Eston more room to display. At present, Eston has accumulated rich project experience in several major industries. These applications include intelligent manufacturing systems for home appliances and 3C products, intelligent assembly systems in automobile related fields, intelligent brewing systems for liquor and intelligent manufacturing systems for new energy-saving building materials. It also provides German enterprises with relevant intelligent manufacturing systems and services of international first-line brand automobile suppliers.
2, the products of individual industries began to form brand awareness.
In the market dominated by established international giants, it is difficult for a new company to have a brand effect trusted by customers, and this brand effect is based on excellent core technologies. Although Eston's overall strength and brand awareness are far behind the four international families, it is a very good progress that its products can start to establish brand image in individual industries:
On the one hand, its complete motion control solution based on ESmotion has been widely recognized by users in manipulator, 3C electronic manufacturing equipment and other industries (we mentioned in the last issue that its complete motion control solution made a breakthrough in these industries on 20 15), and has now formed a certain industry influence; On the other hand, its industrial robots have gradually formed a brand effect in some sub-fields, and the bending robot and its working unit have reached the international leading level.
3. The customer level has been significantly improved.
Eston's industrial robot products have been applied in batches to well-known domestic automobile, household appliances and new energy enterprises, and exported to Southeast Asia and European countries. At present, Eston's customers include Haier, Gree, Hisense, Huawei, Zotye and other well-known enterprises.
4. The market is going international.
Products have been exported to 60 countries and regions, including more than 30 Belt and Road countries. The process of market internationalization is good.
Third, look at three issues that Ashton has to consider in the future.
So far, everything seems optimistic, doesn't it? But we believe that when investing, we must take the initiative to find out what hidden dangers are. Only by knowing both good and bad aspects can we make an informed decision. Therefore, we believe that at least three issues must be considered when looking forward to Ashton's future.
3. 1 human resources issues
The future of a technology-driven company depends largely on the strength of its R&D team. Is Ashton's team further optimized and expanded on the basis of the team originally established by Dr. Gao? A company should not always rely on a technical genius to maintain its long-term innovation vitality. Fortunately, we can see that in the annual report of 14, the shortage of high-level talents was regarded as one of the possible risks of the company, but in the reports of the first half of 16 and 17, it was no longer regarded as a risk, but its talent team advantage was regarded as one of the core competitiveness of the company:
Its R&D team forms two core teams around the company's two core businesses: the robot R&D team led by Dr. Gao; And the research and development team of intelligent core function control components headed by Dr. Qian Wei. Among them, 16, Dr. Gao was elected as the only China enterprise member of the new IFR (the International Federation of Robotics) Executive Committee, which once again verified how awesome this person is. In addition, there are support teams of robotics and intelligent manufacturing technology experts from Britain, Italy, the United States and Japan.
A strong R&D team is the backbone of human resources for continuous technological innovation in Eston.
3.2 Financial situation
At the beginning, we mentioned that Eston's key financial data were very bad. We were talking about two indicators: operating cash flow and ROE. Do you remember? Now let's start with these two indicators:
Look at its operating cash flow first. Through the previous introduction, we know that from 1 1 to 15, due to the depression of the metal forming machine tool industry, the investment in new business robots did not bring considerable returns, and the operating income, profits and operating cash flow in those years were not ideal:
Then, in 16 and 17, due to the outbreak of robot business and the recovery of metal forming machine tool industry, the company's income and profits have reversed and increased substantially:
But contrary to this scene, its operating cash flow has been in a very bad situation and has been negative:
I know what you may think, and you may say that this should be because Eston's robot business is still in the initial stage of development and needs a lot of capital investment. It is normal for cash flow to be negative at this stage. Yes, actually I agree with this view, but let's look at the details:
The cash spent on the construction of industrial robot production line is not reflected in operating cash activities, but in investment cash flow (cash flow is divided into three categories: operation, investment and financing), so it does not affect operating cash flow. Operating cash flow is simply the cash receipts and payments of Eston's main business, and the vernacular is the cash receipts and payments of its business. Even if the cash earned from operating activities is used for investment projects, this part of cash outflow is not included in the operating cash outflow, but is included in another accounting subject, called investment cash outflow. Can you understand here? Operating cash flow simply reflects the cash income ability of the company's main business.
You may continue to ask, what about research and development, and what about the marketing expenditure mentioned above? A large amount of uncapitalized R&D investment and marketing network construction expenditure are reflected in management expenses and sales expenses respectively, which will indeed lead to operating cash outflow. Let's take a look at the impact of Eston's R&D expenditure and marketing expenditure on its operating cash in recent two years:
20 16 cash expenditure of related expenses:
20 17 cash expenditure of related expenses in the first half of the year:
We can see that 16 and 17, the total cash expenditure of Eston's sales expenses and management expenses is about 60 million, and the net operating cash flow in the same period is-65.28 million and-59.32 million respectively. Therefore, even if these cash expenditures are added back, Eston's operating cash flow is only slightly higher than positive, not negative. If we count two government subsidy income with a reporting period of more than 20 million to more than 30 million, Eston's operating cash flow is still negative, at least 20 million to 30 million.
To sum up, what do you mean? It means that even if the influence of Eston's current investment expansion, R&D investment and marketing network construction on cash flow is excluded, its core business's current ability to create cash flow is still negative!
For this problem, Ashton's own explanation is that in order to occupy the market and relax the requirements for customer payment, many business income is not cash but bank acceptance bills, resulting in less operating cash inflows. We do see that the company's notes receivable have increased significantly in the past two years:
Especially in the first half of 17, the company's operating income was 4190,000 yuan, and notes receivable186 million yuan, accounting for a really large proportion of notes receivable. Considering that the credit risk of bank acceptance bills is not high, the cash payment of future bills should not be a big problem, but you should also see that it also has a large number of accounts receivable. But we are still worried, after all, whether the operating cash flow is strong or not reflects the quality of a company's profits. Without cash, the profit quality is not high. The small cash part of the profit can also be extended to other problems, indicating that the company's main business repayment is small, the right to speak in the upstream and downstream supply chain is small, and the product competitiveness is still weak. Therefore, under Eston's current competitive strength and business strategy, its main business's ability to create cash flow is still negative. How long will this last? When can it be improved? Cash flow is called the blood of an enterprise. It is undoubtedly unfavorable for Eston's long-term healthy development that his hematopoietic function is weak for too long. One detail that needs attention is that although its data in the third quarter of this year is still negative, it has increased by about 50% compared with the same period of last year, and the latest issue shows signs of improvement. Will it continue to improve next?
Look at its return on equity:
ROE has basically been declining. What does this mean? It shows that although Eston's profit has increased substantially in recent two years, it is far less than the expansion of net assets. In other words, with the continuous expansion of Eston's scale, its business income has not been matched with the asset scale, and the investment in these two years is far from really effective.
Therefore, combining these two financial indicators, although it seems that Eston's performance has increased greatly in the past two years, in fact, its profitability is declining and its cash flow has not improved significantly.
At the same time, its PE is as high as 100 times:
Low ROE+ high PE, okay, just a bad combination.
At this time, we just want to see how the market expects Eston. The following table is the profit forecast of Eston by major brokers on 20 17-20 19:
The red arrow and the green arrow indicate the expected upward adjustment and the expected downward adjustment respectively, and the red arrow and the green arrow basically account for half, which is not optimistic.
Financial hidden trouble, high PE and weak market expectation, will the sum of these problems be the reason why its top ten tradable shareholders have been lackluster?
Among the top ten tradable shareholders, there is no major shareholder who pays attention to long-term value investment, such as social security fund, QFII and Gangbei Capital. Interested students can look at the composition of the top ten tradable shareholders of Shanghai Conway and make a comparison.
In fact, the solution of all these problems points to one direction, that is, the future prospect of the industrial robot industry and Ashton's position in the industry competition pattern. If the industrial robot industry has a bright development prospect, Eston's position in the industry will be greatly improved, the number and loyalty of customers will be greatly improved, profits will be greatly increased, and the cash income from product sales will also be greatly increased, so that the operating cash flow will naturally improve, ROE will naturally come up, and PE will also come down as earnings per share increase, brokers will adjust their forecasts, and large investment institutions will look to it.
So, in a word, as long as we are optimistic about the industry and Eston's position in the industry, the risks we see now may just become a great opportunity to ambush in advance. How will the industrial robot industry develop in the future and what will be Ashton's position in it? This is the third more critical and important issue that we have to consider: the evolution of the industrial structure of industrial robots and Ashton's position in the industry. This is what we will share next time-industrial robots and Ashton's tomorrow.
Before the next sharing, let's make a summary of the two sharing contents:
1. With the participation of Haigui Wang, Eston rose rapidly and became a powerful enterprise with core technologies in China industrial robot industry. Sometimes the fate of a company changes, and the participation of a cow can play a key role.
2.20 1 1, Eston entered the field of industrial robots. At first, related business income accounted for only a small single digit in the total income, but the proportion increased year by year, reaching 40.23% in the first half of 20 17, nearly half of the country. In this process, we have seen the growth process of a company's core business from scratch and from small to large. In the future, if you see that some companies account for a small proportion of business, don't ignore it easily. Perhaps this business may grow into the backbone business of this company in the future, bringing high-speed performance growth to the company.
3. Eston's business has expanded from the initial metal forming machine tool industry to a wider range of industries such as automobiles, household appliances, new energy, 3C, food and beverage, building materials and chemicals. The market area has also developed from domestic to more than 60 foreign countries. We have seen how a small company whose business is limited to a specific segment can grow into a more international enterprise by improving its core competitiveness step by step and extending mergers and acquisitions, which gives us a lot of enlightenment on the formation process of large enterprises. And if we can keep up with a company that will grow into a big enterprise in the future, our return on investment will also snowball. Eston is still only a small-cap company with annual revenue of less than 654.38+0 billion RMB. Whether it will become a large-scale international enterprise in the future is an interesting question that needs in-depth insight into industries and companies.