Industrial Fulian breaks the transformation of manufacturing transformation challenges
Guo Taiming, who once hoped to break the business out of the manufacturing downturn by way of spin-off business, may have a complicated mood at the moment.
On October 8, after the fourth month of the A-share in Industrial Fulian (Foxconn Industrial Internet Co., Ltd., 601138.SH), the company's share price fell below the issue price of 13.77 yuan, and the market value fell back to 270.2 billion yuan, the higher point. 519.3 billion yuan has shrunk by more than 47%. Although as the chairman of Hon Hai Group, Guo Taiming once said that he is not concerned about the short-term stock price trend, but the reality in front of shareholders is that the aura of the "unicorn" with the fastest A-share record is disappearing. . As of the date of publication, the industrial value of the Industrial Fulian has evaporated by 249.1 billion yuan.
Liu Gengrui, an analyst at Tuoba Industrial Research Institute, told the First Financial Reporter that although the Industrial Internet of Things has been in a "hot" state in recent years, there will be no explosive growth in the short term because the industrial transformation is relatively difficult, whether it is for Equipment, systems, and services all have stricter requirements. In addition, if the process of introducing new technologies affects the operation of existing production lines, it is likely to have a considerable impact.
From the 2018 semi-annual report released by the Industrial Fulian on August 13, we can see the “reality†of manufacturing transformation. During the reporting period, Industrial Fulian achieved a total operating income of 158.994 billion yuan, a year-on-year increase of 16.29%; the net profit attributable to shareholders of listed companies was 5.444 billion yuan, a year-on-year increase of only 2.24%, and the net profit margin was only 3.42%.
“The transformation in the industrial sector involves a wide range of issues. Companies must continue to invest (and possibly for several years) in a number of costs to upgrade and transform, so companies will definitely examine the value that the Industrial Internet of Things can bring to the enterprise. What is it? This is not something that can be achieved in a moment." Liu Gengrui told reporters.
Stock price hit a new low in the year
As a subsidiary of Hon Hai Precision Group, the world's largest electronics foundry company, the share price of Industrial Fulian hit the issue price after successive declines. This day is just the fourth month of the listing.
As the largest new stock in the past three years, Industrial Fed has received attention from the IPO and created the fastest record of 36 days of A shares. However, after the A-share listing, the Industrial Fed only had three daily limit, and the fourth trading day opened the daily limit. The stock price fluctuated by more than 7% throughout the day.
In the face of the initial downturn in stock price movements, at a group shareholders meeting two weeks after the listing, Guo Taiming said that as the leader of Hon Hai, only the company's long-term development is concerned. "I don't know how much the stock price is now."
Guo Taiming said that the reason why the Industrial Internet (Industrial Fulian's main listing concept) is locked in as the strategy for the next decade is because the real economy plus the digital economy is China's current top strategy. He also estimated that it will take at least three years from the listing to the output, and it is expected that by 2020, the relevant investment of Industrial Fulian will be rewarded.
Similarly, Chen Yongzheng, chairman of Industrial Fulian, also responded to the stock price volatility problem, saying that the stock price has fluctuated due to the impact of the whole market. This is unavoidable. At present, the company’s fundamentals are normal. The company has always followed the prospectus in the main business direction. The proposed progress is normal.
However, from the actual operating situation, the profit problem in the manufacturing industry is still outstanding.
In 2015, 2016 and 2017, the industrial profit margins of Industrial Fulian were 5.26%, 5.27% and 4.48% respectively. The consolidated gross profit margin for the same period was 10.50%, 10.65% and 10.14% respectively. In the first half of this year, the company achieved a net profit of 5.444 billion yuan attributable to shareholders of listed companies, a year-on-year increase of only 2.24%, and a net profit margin of only 3.42%, of which net profit growth in the second quarter was only 0.36%.
Regarding the decline in net profit growth, Industrial FTU did not give an explanation in the annual report. However, some analysts believe that the biggest challenge in transforming the industrial Internet of Things is how to convert massive amounts of data into effective data, which will generate insights and become the basis for supporting decision-making, ultimately bringing value to the company. At present, Industrial Fulian is still a decade away from smart manufacturing service providers.
"In today's era of tight supply chains, traditional industries cannot be unaffected. Therefore, it is imperative that traditional industries integrate new technologies such as the Internet, Internet of Things, and artificial intelligence to seek transformation, but it takes time." Liu Gengrui The reporter said.
The road to transformation is full of challenges
Ma Yun, the founder of Alibaba, once said to Guo Taiming: "Foxconn is an elephant in manufacturing. Ali has to use many ants to overthrow Foxconn." Until the 2016 Yunqi Conference in Ali, Guo Taiming was still ridiculing, and Ma Yun talked about the new Retail, new manufacturing, new finance, new technologies and new energy made him very scared and didn't sleep well all night.
"But after so many years, Ma Yun has done very successfully. He thinks that he is a platform. He wants to gather ants to knock down my elephant, but now I haven't been knocked down, but he does bring a lot of people together. "Guo Taiming tweeted at a meeting, Ma Yun did not make a day of manufacturing, just like a person who has not been married said that the second wedding. The new manufacturing mentioned by Ma Yun represents that the manufacturing industry should be aligned with the platform, and the data generated by the cloud, while the real economy is not the Internet +, must be + Internet, to distinguish what is virtual, what is true. This is the advantage of Foxconn.
Therefore, in the past three years, Guo Taiming has frequently appeared in many IoT and cloud computing key industry conferences, and is his own "Industrial Internet of Things" strategic platform. Industrial Fulian is the "locomotive" that carries the transformation of Foxconn.
At the Industrial Fulian Annual General Meeting of Shareholders on June 29, Zheng Hongmeng, the general manager, said that the smart manufacturing and industrial Internet transformations have been implemented in Foxconn factories. The current actual import ratio is about 15% to 20%, and there is still considerable growth in the follow-up. space. The company will continue to optimize the program, and when it introduces benefits and actual performance in its own smart factory, it will open up solutions and empower SMEs.
The semi-annual report shows that the industrial optimization effect of the BEACON platform built by Industrial Fulian is estimated to be 30%, the yield of the BUCON is increased by 30%, the production cycle is shortened by 18%, and the inventory turnover days are shortened by 26%. The energy consumption is reduced by 20%.
However, analysts from the current semi-annual report data analysis, industrial Fulian's industrial Internet should be said to have just started, far from the extent of the company's revenue or profit growth, whether it can be separated from the lowest end of the industry chain, still need to face many challenges.
Liu Gengrui told reporters that the current market changes are quite fast. Enterprises engaged in production and service must quickly adapt to market changes before they are eliminated. In addition, the Internet has already penetrated into all walks of life, in the era of tight supply chains. The traditional industrial sector cannot be unaffected.
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