Leaderdrive (绿的谐波, 688017.SH), a leading robotic component maker in Suzhou, recorded a slump of more than 40% in its net profit for the first half of this year, signaling a bleaker business outlook for the firm amid China’s economic slowdown.
The firm posted a net profit attributable to shareholders of 50.64 million yuan (US$6.95 million), down 44.74% year on year, on revenue of 172 million yuan, a decrease of 29.52% from the same period last year.
The company blamed the decline on dwindling income from its main business, which is the manufacturing of harmonic reducers, servo motors and other parts essential to robots.
During the reporting period, the company’s R&D expenditure amounted to 21.34 million yuan, slightly lower than last year, but Leaderdrive didn’t specify.
The percentage of R&D as a share of revenue stood at 12.44%, it explained.
As one of the largest suppliers of precision gear reducers, the firm planned and kicked off the construction of two R&D and production facilities in North America and Europe in the first six months of this year, Leaderdrive said.
This means the company will step up its drive to go global.
A numbers breakdown of the 23H1 financial report indicates that Leaderdrive suffered as demand from 3C and semiconductor clients fell for fixed asset investments like industrial robots.
In turn, Leaderdrive’s revenue and profit dropped since it is a major supplier of harmonic reducers and servo motors to industrial robot manufacturers.
These parts are widely applied across a spectrum of categories, such as industrial and service robots, CNC machine tool, medical equipment, semiconductor, and new energy equipment.