Industrial robot pioneer HGZN pivots to NEV, lithium mining to halt free fall

But the rise of NEV has disrupted the competitive landscape, leaving fuel-powered automakers and their suppliers like HGZN struggling to play catch-up.

Hagong Intelligent Robot Co., Ltd. (哈工智能, 000584.SZ), one of the oldest industrial robot manufacturers in China, said in a recent exchange filing that its shares will trade under a ST label.

In China’s securities market, a ST marking — or a ST marking preceded by an asterisk — often suggests that a stock could contain excessive risks and thus discretion is advised for investors. ST stands for special treatment.

Hagong Intelligent Robot Co.,Ltd, often referred to as HGZN for short, went public on Shenzhen Stock Exchange as early as 1998 and is one of the country’s earliest companies to dedicate itself to making high-end manufacturing equipment and industrial robotics.

According to its FY 2022 financial report, HGZN recorded revenue of 1.82 billion yuan (US$258 million) in 2022, up 5.80% year on year. Nonetheless, its net loss attributable to shareholders stood at 740 million yuan during the same period, an increase of almost 26% from 588 million yuan in 2021.

In addition to widening losses, the company’s gross margin plummeted 10.54% from the same period the previous year.

HGZN ascribed the anemic performance to a number of factors, such as a slowing economy, a downward business cycle, the Russia-Ukraine war, and global supply chain tensions.

These led to a delay in the settlement of the company’s income both at home and abroad, especially that for its high-end manufacturing equipment.

Upon closer inspection, HGZN has been going downhill financially since 2017. It booked a net profit attributable to shareholders of 90 million yuan, 120 million yuan, 41 million and 6 million yuan, from 2017 to 2020, on revenue of 1.572 billion yuan, 2.383 bilion yuan, 1.737 billion yuan and 1.618 billion yuan, respectively.

In 2021, it even slipped into the red.

Betting on NEV, lithium mining

HGZN’s financial woes stem partly from its over-concentration in the traditional combustion-engine vehicle business, counting among clients car makers like Baoneng and Qoros.

But the rise of NEV has disrupted the competitive landscape, leaving fuel-powered automakers and their suppliers like HGZN struggling to play catch-up.

As part of its shift to serving NEV producers, HGZN has closed deals with NIO, BYD, Geely, Yutong, and Hozon Auto to provide them with industrial robots and automation solutions.

Over the past few years, HGZN has also tried to expand its business lines to diversify the risks from a fixation on automaking.

For instance, in February this year, HGZN announced that it planned to buy a 70% stake in Jiangxi Dingxing Mining Company and a 49% stake in Anhui Xingli Technology in a part-cash, part-stock transaction.

These two target companies specialize in mining lithium ores for the production of anode and cathode materials used in lithium-ion EV batteries. The amount involved in the equity purchase was not disclosed.

HGZN justified the move in an earlier exchange filing, saying this is aligned with the company’s strategy to complement its main business with new growth drivers.

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Ni Tao

Ni Tao is the founder and editor-in-chief of cnrobopedia. Prior to cnrobopedia, he had a full decade of experience with a major state-run English-language newspaper as a tech reporter and opinion writer. He is also a communications specialist, having provided consultancy services to established firms like Siemens, Philips, ABinBev, Diageo, Group (Nasdaq: TCOM, HK: 9961), Jianpu Technology (NYSE: JT) and a handful of domestic startups. A graduate of Fudan University, he writes widely about China's business and tech scenes and other topics for global publications including South China Morning Post, SupChina, The Diplomat, CGTN, Banking Technology, among others, and tries to impart his experience to students at Fudan University Journalism School, where he is a part-time lecturer. When he's not writing about robotics, you can expect him to be on his beloved Yanagisawa saxophones, trying to play some jazz riffs, often in vain and occasionally against the protests of an angry neighbor. Get in touch with him by dropping a line at

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