Eston incentivizes 10 million shares to change the image of a "profit insulator"

A few days ago, Eston issued 16 consecutive announcements, one of which was the implementation of a new round of equity incentive plan. It plans to grant 10 million stock options to 286 equity incentive targets, with an exercise price of 21.48 yuan per share and exercise conditions of 23/24/25. The net profit for the year will not be less than 300 million, 500 million, and 800 million, respectively.

Eston is a leading domestic industrial robot company and one of the few companies to reach the "international quasi first line level". In the past few years, the company has achieved rapid growth in robot sales. In 2017, the company's robot sales were less than 2000 units, and in 2022, it reached 10000 units. In 2022, it achieved the goal of shipping 17000 units, ranking first among domestic brands with a market share of about 6%. By 2023, it will sprint towards the sales target of 25000 units.

Strategic change shifts towards pursuing profits

Although the sales volume of Eston Industrial Robotics is large, it always gives the impression that there is no profit. Compared to the four major families and domestic enterprises such as Huichuan Technology, Eston's profit margin is also very low. In the past three years, the net profit margin after deduction has only been at the level of 2% -3%.

Previously, Eston specifically explained in the financial report that the company still aims to rapidly expand its scale and increase its shipment volume, striving to seize the development opportunities of downstream emerging industries and key application areas, and increase its market share. When the shipment volume reaches a certain scale, while obtaining more profit space through scale, the company quickly improves its profitability.

The goal of this equity incentive is net profit, which seems to indicate a change in Aston's development strategy. In the future, more energy will be focused on improving net profit. In fact, this is Aston's fifth equity incentive. The previous few mainly focused on operating income as a performance condition, but this sudden use of net profit as a standard indicates the company's determination to improve profits.

Of course, this does not mean that Aston will slow down its expansion and increase its market share. In 2022, Aston implemented its fourth equity incentive, with a revenue of no less than 3.8 billion in 2022, no less than 5.2 billion in 2023, and a revenue of 10 billion in 2025. This growth rate is undoubtedly significant, reflecting Aston's confidence in performance growth.

From the current situation, Eston's net profit standard for the next three years is not high, and the probability is achievable. On the one hand, robot sales have reached a new level, and the scale effect is gradually emerging; On the other hand, in the past, Eston has increased its localization rate through frequent acquisitions. Over the years, it has been promoting integration and internalization, and has achieved results. In the future, it may be possible to optimize management processes, reduce expenses in sales, management, financial expenses, and other aspects, and achieve the goal of increasing net profit.

In 2025, the shipment volume of industrial robots exceeded 600000 units

Undoubtedly, in the next decade or even longer, China will continue to maintain the world's largest demand market for industrial robots, and this is a very good opportunity period for the Chinese robot industry.

On the one hand, as the domestic manufacturing industry is accelerating its transition from labor-intensive low-end industries to high-end manufacturing, the domestic industrial robot industry benefits from the long-term demand growth brought about by the upgrading of the domestic manufacturing industry; On the other hand, with the decline of the domestic demographic dividend and the rapid rise of labor costs, industrial robots are entering more industries for the purpose of cost reduction and efficiency increase.

I don't know whether I realize that the COVID-19 epidemic in the past few years has profoundly changed the global industrial structure and enterprise development awareness. It is only some enterprises with high automation level that can achieve stable production in the epidemic, which has promoted many manufacturing enterprises to carry out the determination of "machine replacement", so that the market demand for industrial robots continues to be strong.
In addition, China has initially established a complete robot industry chain system. Although some core components may not perform as well as foreign giants, they have been able to achieve a certain degree of substitution. Local advantages allow domestic enterprises to ensure supply, and some high-end manufacturing enterprises, including BYD, have begun to use domestic robots.

Previously, due to the issue of poor overseas supply chains, the supply cycle of foreign brand robots was extended, causing many companies to reduce production and stop production, which can be said to have suffered heavy losses. Now, an important part of using domestic robots to replace is to avoid this problem again. This also provides a very good opportunity for the iteration and maturity of domestic robots.

In 2022, the sales volume of industrial robots in China exceeded 300000 units, with a compound annual growth rate of 23% from 2017 to 2022. In the future, while accelerating the application of industrial robots, it is expected to achieve sales volume of over 600000 units of industrial robots and a market size of over 120 billion units by 2025.