The harmonic refinancing plan of the domestic harmonic reducer leader Green has recently been formally submitted for registration, which means that the expansion plan of up to 2 billion yuan will be passed.

Green Harmonic’s investment project focuses on a new generation of harmonic reducer, which can expand its product application scenarios and further meet the expected demand for humanoid robots.

So, what is the expected expansion plan for green Harmonics?

Demand for industrial robots is sluggish

The reducer is the core component of industrial robot. In the cost composition of industrial robots, the reducer, controller and servo motor account for about 70% of the total cost, of which the reducer accounts for 35%, which shows the importance of the reducer in the robot industry.

Green Harmonics is China’s largest harmonic reducer production supplier, products are mainly used in the field of industrial and service robots. According to the company’s 2022 annual report, the revenue of the above two areas totaled 360.9 million yuan, accounting for 81% of the total revenue. Other areas include CNC machine tools, semiconductors, photovoltaics, and medical equipment production.

It should be noted that green harmonic main business revenue is relatively single at the same time, but also encountered weak downstream demand.

In recent years, with the weak performance of 3C, semiconductor and other industries, the demand for downstream industrial robots is also weak. From January to October 2023, the cumulative output of industrial robots decreased by 3.7% year-on-year,

of which the output in October decreased by 17.7% year-on-year, and the industry entered the bottom of the cycle.

The performance of green Harmonic after listing has also been criticized by the market, the company was listed on the science and technology innovation board in August 2020, and after the sharp growth of revenue and profit in 2021, it began to show signs of relative “stagnation” in 2022.

In terms of a single quarter, from the third quarter of 2022 to the third quarter of 2023, the year-on-year revenue growth of Green Harmonic company was divided into -25.39%, -18.25%, -5.68%, -44.48%, -18.42%; In the same period, the increase of net profit attributable to the mother was -37.88%, -42.21%, -32.47%, -52.86% and -39.88% respectively.

“Science and Technology Board Daily” reporter noted that industrial robots belong to the general machinery industry, with a typical cyclical cycle of about 3-4 years. In addition to green harmonics, other similar enterprises such as: China Great Power De, Haozhi Electromechanical, Guomao shares, Zhongji Kemi and other reducer enterprises performance is also declining.

Domestic companies in the same field have expanded production

As early as October 2022, Green Harmonic announced A plan for the non-public offering of A-shares, proposing to issue no more than 50.58 million shares and raise no more than 2.027 billion yuan, which was accepted on March 14 this year.

The reporter of the Science and Technology Board Daily noted that the 2.027 billion yuan raised by Green Harmonic is twice as much as the total 962 million yuan raised by its IPO.

It is worth noting that the Shanghai Stock Exchange and the market have repeatedly paid attention to whether there is duplication of construction before and after the green harmonic fundraising project. The company also said in the audit inquiry response and other public information that the refinancing is the IPO raised investment project “annual output of 500,000 precision harmonic reducer project” upgrade and expansion.

Green Harmonic said that the new increase in the investment project for the company’s new generation of harmonic reducer and mechatronics products, are around its main business precision transmission field, through the process design and technology path to produce a new generation of products, not only can expand its products in the service robot, CNC machine tools, semiconductor production equipment application scenarios, It can also meet the continuous growth of high-end manufacturing industry market demand.

The harmonic reducer can be applied to multiple joint parts of humanoid robots, and the control requirements of each joint will bring broad demand for its harmonic reducer.

In terms of capacity expansion, it is reported that after the raised investment project reached the total capacity of two generations of harmonic reducer 1.59 million units/year, of which the annual output of the new generation of harmonic reducer is 1 million units/year, and the new capacity of mechatronics products is 200,000 units/year.

It is worth mentioning that Green Harmonic believes that comparable domestic companies are expanding their production capacity, and the investment plan is therefore forward-looking in the industry.

Among them, China Great Power Germany added 200,000 units/year and 300,000 units/year of precision reducer capacity in IPO in 2017 and issuance of convertible bonds in 2021 respectively; As of October 2022, the RV reducer capacity is about 100,000 units/year, and it is expected that new capacity will be planned in 2023.

In addition, in the field of servo motors, which are core components of industrial robots, leading enterprises such as Huichuan Technology and Microlight Share have planned capacity expansion since 2022.

The Future of Humanoid robots

Although Green’s harmonic performance and downstream demand are less than expected, but because the company’s harmonic reducer can be widely used in humanoid robots, its share price has risen more than 40% since October 23 this year. A number of domestic research institutions believe that the reducer has a core role in controlling the joint movement of humanoid robots.

Some analysts in the industry told the “Science and Technology Board Daily” reporter that the humanoid robot industry is currently in the 0-1 stage, if the early market entry period into the growth stage, the demand for humanoid robots will be fully erupted. “Like the joints of the robot’s upper body, such as fingers, elbows, shoulders and other parts that require higher volume and flexibility, the harmonic reducer can play a better role.”

Guosheng Securities analyst Liu Gaochang said that if it is expected that the number of harmonic reducer for the main joint of a single humanoid robot is 9-14, the price of harmonic reducer is about 1000-5000 yuan; Assume a single humanoid robot harmonic reducer dosage 10, the unit price is assumed 1500 yuan, the value of a single humanoid robot harmonic reducer 15,000 yuan.

“From the perspective of the market development of humanoid robots, the long-term expectations are optimistic.” The above industry analysts pointed out that from the current point of view, green Harmonic from the new investment project to reach production there is still some time, the company is still dependent on industrial and service robots for a certain period of time. Domestic and foreign humanoid robots are also in the early stage of the market outbreak, from technology maturity to application landing to the overall mass production “all still need time.”

The above industry insiders believe that when humanoid robots enter the mass production stage, the parts industry chain may usher in a fall in cost prices, but at the same time, the output outbreak may have a certain impact on the gross profit margin of relevant companies.