HCFA (禾川科技, 688320.SH), an industrial automation upstart in China, said it had sold 5% of its shares for 276 million yuan (US$37.9 million) to German titan Bosch Group.
According to an exchange filing published by the firm, HCFA signed the equity transfer agreement with Bosch China on November 2, under which it would sell 75.5 million shares (about 5% of the company’s stock) at 36.55 yuan apiece to the conglomerate.
Over the next 12 months, the Chinese branch of the German powerhouse will become a shareholder of HFCA, owing a stake of more than 5%, the stock exchange filing said.
At the same time, HCFA, which listed on Shanghai Stock Exchange last year, also plans to set up a joint venture with Bosch to manufacture automation as well as electrical engineering products and services tailored to the Chinese market.
The new venture has a registered capital of 120 million yuan and is 40% owned by Robert Bosch and 10% owned by Bosch China. Both are affiliates of Robert Bosche GmbH.
Meanwhile, HCFA will comprise 50% of the new firm’s stake.
Headquartered in Quzhou, a city in western Zhejiang Province, HCFA explained that the tie-up with Bosch is aimed at unleashing the “enormous potential” of China’s automation market, especially in fast-growing emerging industries.
The new joint venture seeks to build a complete automation product portfolio and flexible conveyor systems, while meeting the demand of Chinese clients for fast response and high performance-price ratio.
HCFA’s products and solutions are now deployed to a wide range of areas, including 3C electronics, photovoltaic, lithium-ion battery, packaging, textile, logistics, robotics, woodworking, laser industries.
It posted revenue of 885 million yuan in the first three quarters of this year, up 26.14% year on year, financial data shows.
Net profit attributable to shareholders stood at 63 million yuan, down 29.72% from the same period of last year.
In the third quarter, HCFA’s revenue leaped 20.68% over a year earlier to 283 million yuan but slid 13.13% quarter on quarter.
Net profit attributable to shareholders slumped 60.50% year on year and 53.99% quarter on quarter to 13 million yuan.
Market analysts said the contrast between the firm’s growing revenue and dwindling profit points to the need for new momentum to fuel the business, hence the partnership with Bosch.
At the close of the morning trading session today, HCFA ended at 42.86 yuan per share, inching up 0.61% over the opening price, with a market cap of around 6.43 billion yuan.