Event: on December 28, 2021, the Ministry of industry and information technology and other eight departments jointly issued the intelligent manufacturing development plan for the 14th five year plan, proposing to unswervingly take intelligent manufacturing as the main direction, promote industrial technology reform, optimization and upgrading, and promote China’s manufacturing industry to move towards the middle and high end of the global value chain. The 14th five year plan for the development of intelligent manufacturing has once again defined the future development direction of intelligent manufacturing, made clear plans for multiple intelligent manufacturing related industries, and the future development space of intelligent manufacturing is broad.
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The policy further defines the development goal of Intelligent Manufacturing in 2025, with strong long-term growth certainty
Over the past decade, China’s intelligent manufacturing has made great progress in supply capacity, standard setting and enterprise matching, of which the market satisfaction rate of intelligent manufacturing equipment has exceeded 50%, 285 national standards have been issued, 28 international standards have been led, and nearly 80 industrial Internet platforms with industrial and regional influence have been cultivated. However, compared with the requirements of high-quality development, there are still some problems in the development of intelligent manufacturing, such as low supply adaptability, weak innovation ability, insufficient application depth and breadth, lack of professionals and so on. The industry needs to be upgraded and reformed urgently.
In the “14th five year plan” for intelligent manufacturing development, the Ministry of industry and information technology proposed to take transformation and upgrading, supply capacity and basic support as important development objectives. It is further clarified that by 2025, China will basically realize the digitization and networking of 70% of manufacturing enterprises above Designated Size, and build more than 500 intelligent manufacturing demonstration plants leading the development of the industry; The market satisfaction rate of intelligent manufacturing equipment and industrial software exceeds 70% and 50% respectively, and more than 150 professional intelligent manufacturing system solution suppliers are cultivated; Build a standard system and network infrastructure suitable for the development of intelligent manufacturing, complete the formulation and revision of more than 200 national and industrial standards, and build more than 120 industrial Internet platforms with industrial and regional influence. The objectives in the 14th five year plan for intelligent manufacturing development further strengthen the guidance of policies on the development direction of intelligent manufacturing. Intelligent manufacturing is a major industrial direction that we are firmly optimistic about. The future development path is clear and uncertain.
Intelligent manufacturing gives birth to a new scene of intelligent factory and benefits new technologies such as digital twins
Compared with traditional manufacturing factories, intelligent factories carry out intelligent upgrading around the whole manufacturing process of design, production, management and service, build a batch of intelligent workshops with current production data connection, flexible manufacturing and intelligent management capabilities, promote data sharing and in-depth mining across business activities, and realize accurate prediction, management optimization and independent decision-making of core businesses. With the further improvement of smart factory penetration, new technologies such as digital twin, artificial intelligence, 5g, big data, blockchain and VR / AR have a wide range of applications and large development space. We believe that manufacturers with the above core new technologies are more likely to receive smart factory construction orders in the future, and their performance is expected to usher in rapid growth.
The downstream market space of process intelligent manufacturing is large, and enterprises with full ecological layout are optimistic
Under the “double carbon” policy, the process intelligent manufacturing industry has strong performance certainty and broad market space. As the key pillar industries of the country, process industries such as metallurgy, petrochemical and chemical industry have a large scale. At the same time, process industries have the characteristics of many process links and long process flow, involving a large number of hardware equipment. From the perspective of scale, process intelligent manufacturing has a broad demand space. On the other hand, metallurgy, petrochemical and chemical industries belong to “high carbon emission” industries. At present, the average process level and equipment of the industry are backward, the degree of automation is low, and the energy consumption is still in the stage of extensive management. Under the “double carbon” background, optimization and upgrading need to be carried out as soon as possible to meet China’s “double carbon” goal.
The core technology continues to break through, and the domestic replacement rhythm of process intelligent manufacturing may exceed expectations. We are more optimistic about enterprises with PLC / DCS and other core industrial control products to realize the overall layout from hardware to software. Domestic intelligent manufacturing enterprises have actively invested in R & D and continued to make breakthroughs in core technologies and products. At present, they have a series of core industrial control products and industrial software products, and the product technology / performance has reached the world-class level. China’s intelligent manufacturing enterprises have many advantages, such as good product performance, high cost performance and localized services. With the rise of domestic intelligent manufacturing enterprises, the domestic alternative rhythm of process intelligent manufacturing may exceed expectations. We believe that process intelligent manufacturing is expected to maintain a high industry prosperity in the next 3-5 years at least. Relevant industries will fully enjoy the industry dividends brought by demand expansion and accelerated domestic substitution, give full play to their own advantages and drive the long-term development of the company’s performance.
Intelligent manufacturing solutions for discrete industries are promising, focusing on binding key customers and developing enterprises in depth
Compared with the process industry, the demand for intelligent manufacturing in discrete industries presents the characteristics of “small and scattered”, which requires a deep understanding of downstream industries. At present, the digital transformation of discrete industry customers is still in the early stage of development. With the maturity of automation and intelligent technology, the role of Intelligent Manufacturing in improving quality and efficiency in the process industry is gradually emerging, and the demand for discrete intelligent manufacturing is gradually strong. In the discrete manufacturing industry, in-depth development is more conducive to intelligent manufacturing enterprises to reduce marginal costs and improve their profitability. We are more optimistic about discrete intelligent manufacturing solution providers binding large customers. In the future, with the further market demand of digital transformation of manufacturing customers, intelligent manufacturing in discrete industries is expected to usher in high-speed development.
Intelligent manufacturing opens up growth space for industrial software, and industrial software is expected to usher in breakthrough growth
At present, the scale of China’s industrial software market is small, and the localization rate of high-end industrial software is low. With the rapid development of intelligent manufacturing and clear policy guidance, the scale of China’s industrial software market is expected to expand rapidly. With the progress of China National Software And Service Company Limited(600536) technology and industrial capacity, the localization rate of high-end industrial software is expected to be further improved. Under the general trend of intelligent manufacturing, we are optimistic about the following four types of industrial software enterprises: 1) production control industrial software such as PLC / DCS: production control industrial software such as PLC / DCS belongs to the core industrial control software, and the Chinese market is still dominated by foreign brands. At present, Chinese enterprises continue to make breakthroughs in large PLC / DCS products, and the technology is ranked at the world-class level, The localization rate is expected to increase rapidly in the future; 2) CAD / EDA and other design industrial software: at present, CAD / EDA and other design software already have some core technologies and have great potential development space; 3) MES / APC / APS and other manufacturing industrial software: deeply benefit from the intelligent upgrading of the manufacturing industry, can significantly improve product yield and production efficiency, further realize flexible production, and the potential market space is considerable; 4) ERP / SCM and other business management Industrial Software: intelligent manufacturing is expected to further promote the intellectualization of industrial chain and management, and the prosperity of business management industrial software industry is expected to remain high.
Investment suggestions and risk tips
Key recommendations: intelligent manufacturing leaders [ Shanghai Baosight Software Co.Ltd(600845) ] and [ Zhejiang Supcon Technology Co.Ltd(688777) ] in the whole ecological layout of the process industry; Discrete intelligent manufacturing solutions high-quality enterprises [ Guangzhou Sie Consulting Co.Ltd(300687) ], [ Nancal Technology Co.Ltd(603859) ], etc.
It is suggested to pay attention to: CAD / CAE / EDA and other basic industrial software [Kelun electronics], [Huada Jiutian] (to be listed), [guangliwei] (to be listed), [silxin] (to be listed), etc.
Risk tip: industry competition intensifies; Industry price war intensifies; Deterioration of supply-demand structure; Covid-19 epidemic spread and impact
