Weaker economy, flat demand behind China’s industrial robot blues in 2023

A drastically slowing economy is chiefly to blame for the anemic growth of the country's industrial robot space over the past year.

Inovance (汇川技术, 300124.SZ), a Chinese robot and automation titan, bucked against the trend by recording profit growth in 2023, despite across-the-board woes for its domestic competitors.

Inovance, which was founded by a group of former Huawei executives, issued its earnings forecasts recently, showing that it posted a net profit of 4.57 billion yuan to 4.96 billion yuan in 2023, up 6% to 15% year on year.

The Suzhou-headquartered firm, which celebrated its 20th anniversary in December last year, ascribed the growth to a number of factors.

Its automation business expanded rapidly thanks to “branding and product solution advantages” as well as “structural growth opportunities in downstream industries.”

Rising penetration of EVs is another major driving force behind its EV-focused business, said Inovance, which supplies manufacturing equipment, core parts and powertrains to car makers.

Continuing the slide

The brisk growth of Inovance has dwarfed the performances of its rivals in 2023.

Industrial robot makers Efort (埃夫特, 688165.SH), HGZN (哈工智能, 000584.SZ) and Step (新时达, 002527.SZ) largely continued the slide that had started the previous year.

Efort booked a forecast loss of 40 million to 50 million yuan; HGZN, 300 million to 440 million yuan; and Step, 240 million to 330 million yuan.

Nonetheless, their losses narrowed significantly compared to a year earlier, signaling a brighter outlook.

Efort’s expected losses dropped by 71.07% to 76.86%, HGZN’s were down by 40.51% to 59.62%, while Step’s slid 68.15% to 76.90%.

The lackluster results of these industrial giants are explicable by many reasons. Notably, downstream sectors such as pharmaceutical, electronics and metal processing experienced a worse-than-expected recovery.

Image credit: Unsplash

Slower growth

This stands in contrast with certain segments, which remained a bright spot and kept their momentum. The photovoltaic sector, for instance, added an estimated installed capacity of over 200GW in 2023 — an all-time high.

Other big buyers of industrial robotics and automation equipment were less robust. The lithium-ion battery domain continued to grow, albeit at a slower pace.

According to data from EVTank, an EV industry information portal, China’s lithium-ion battery shipments totaled 887.4GWh in 2023, an increase of 34.3% over the previous year.

In 2022, the figure was 660.8GWh, up by a whopping 97.7% over 2021, EVTank says.

A drastically slowing economy is chiefly to blame for the anemic growth of the country’s industrial robot space over the past year.

China’s National Bureau of Statistics revealed that the nation churned out 429,500 industrial robots last year, down 2.2% from 2022.

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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, Trip.com 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 nitao0927@gmail.com.

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