Inovance (汇川技术, 300124.SZ), a leading global supplier of industrial automation components and solutions, said on an earnings call today that it expects its overseas revenue to account for 20% of the total.
The Shenzhen-headquartered giant, which was founded by a group of Huawei alumni, disclosed the financials for the first half of this year.
It reported income of 12.45 billion yuan (US$1.71 billion), 19.76% higher than in the previous year.
A breakdown indicates that the company derives its income from three operations, general automation products, smart elevator service and NEV and rail transportation.
Its general automation products generated revenue of 6.85 billion yuan, up 15.52% year on year.
The smart elevator service gained 7.33% from the same period last year to 2.37 billion yuan, while the NEV and rail transportation segment reaped 3.17 billion yuan, an increase of 44.81% over the previous year.
Inovance manufactures industrial controllers and robotic operational systems, among other products.
Soaring overseas revenue
The company said on the call that its domestic and overseas businesses contributed 11.64 billion yuan and 811 million yuan, respectively.
Although currently overseas business is only a fraction of the firm’s entire revenue, it rocketed 136.77% in 23H1.
This has emboldened Inovance to announce the goal to grow this proportion to 20% in the future.
Internationalization is one of the firm’s three long-term strategies, and it will double down on the sale of its industrial automation products abroad, Inovance said.
Of all the business categories, the elevator business constituted the bulk of Inovance’s overseas business, accounting for 40%-50%, in 23H1.
The NEV sector made up 30%, with the remainder coming from industrial control and automation.
Inovance said despite a bleak global economic outlook, its general automation business grew rapidly in the past three years and advanced 15% to 16% year on year.
Although weaker demand from lithium battery and 3C, two biggest buyers of industrial control equipment, dented Inovance’s revenue, orders placed by clients in air compressor, machine tool, injection molding and logistics industries have witnessed a robust rebound.
Inovance stated that its downstream sectors have bottomed out, but an inflection point across the board is still uncertain.