Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) 2022 annual financial budget report I. Development Strategy of the company
According to the development plan of the third five-year strategic development period (20182022), the company will adhere to the strategic development idea of “1 + n”, take the strategy of “large number of talents” and “cultural guidance” as the solid support, promote the five strategies of “industrial agglomeration”, “extension”, “globalization”, “digitization” and “synergy”, base on China and look at the world, Achieve the goal of “becoming an industrial group with high influence in its field, customer trust, shareholder trust and employee respect”.
2、 Main business plan for 2022
1. Core business: continuously improve industrial synergy and release growth potential
In 2021, with the rapid growth of the company’s business performance in China, the contradiction between the existing production capacity and the growing sales orders has gradually become prominent.
For most of 2021, the subsidiary fosber Asia is in the state of full production and full sales. For many years, fosber Asia has rented the plant and office space of its parent company Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) and the existing site capacity can no longer meet the business development needs in the next few years. Fosber Asia’s capacity expansion is imperative in 2022. The company has started relevant internal work, actively contacted with the competent authorities, and strive to strive for new industrial land for fosber Asia in Guangdong Province, promote new production capacity, and make it the cornerstone to support the development of fosber Asia in the coming years.
In 2021, the subsidiary Yum power had full orders and prosperous production and sales, and encountered capacity bottlenecks to a certain extent. At the same time, yum’s production structure will be further optimized and its production efficiency will be further improved in 2022. At the same time, yum’s production structure will be further improved to meet the needs of Yum’s production base, and Yum’s production efficiency will be further improved.
The company’s core business is corrugated packaging equipment business, which covers all the main key links of the corrugated packaging production and processing value chain. The layout of the industrial chain is perfect. There are many similarities and commonalities in the products, technology, sales network and supply chain of various business entities, and there are many things that can be borrowed and supplemented by each other, It is beneficial for the company to promote the integration among business entities within the group and realize industrial synergy.
In 2022, the company will continue to promote the high-end corrugated board production line business of fosber group and qcorr, interact with fosber Asia’s corrugated board production line business facing China and the Asia Pacific market in terms of products and technology, support fosber Asia to introduce European leading product design schemes and technologies, build business entities facing China and industry (Europe), share the supply chain In terms of resource channels in production and processing, realize complementary advantages and resource sharing, reduce order delivery costs, improve production and operation efficiency, realize “big brand quality, grounding gas price” and improve comprehensive competitiveness; Support the integration of corrugated board production line of fosber group and qcorr, Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) (China) corrugated box printing and packaging line business and industrial digital jet printing technology, explore new models, new technologies and new products, and inject new vitality into corrugated paper packaging equipment business.
2. Enter the field of digital packaging
(1) Plate printing technology vs digital jet printing technology
The company’s corrugated box printing equipment products adopt sector printing technology. The printing principle is to first make the text and image to be printed into a printing sector, and then transfer the text or image from the printing sector to paper or other substrates through professional printing equipment and ink. Plate printing technology is the most widely used, mature and stable technical route in the field of corrugated packaging. In recent years, the rapid development of digital jet printing technology and its application and promotion speed in the field of packaging can not be ignored.
At the technical level, digital jet printing does not need a printing sector. The graphic information can be transmitted to the printing equipment through the network and imaged directly on the paper package. Compared with sector printing technology, digital jet printing technology has the characteristics of no sector printing, on-demand printing, variable data / arbitrary pattern printing, high precision, low carbon and environmental protection.
At present, the application of digital jet printing technology in the field of packaging is still immature, especially in the corrugated packaging industry. The equipment using digital jet printing technology is still difficult to compete with the equipment using traditional sector printing in key indicators such as printing quality and production efficiency. In terms of sales and market share, the production line equipment using digital jet printing technology is still far from that using traditional sector printing.
However, digital spray printing is the trend of Technological Development in the field of corrugated packaging printing, which has become the consensus of the industry. In the future, after the industrial digital jet printing technology is mature and the shortcomings in printing quality and production efficiency are solved, its own characteristics such as more flexible production, more agile response speed and more abundant and diverse printing texts and pictures are expected to get sufficient space for display, Meet the unique packaging printing demand of “small batch + multi variety + personalization + customization” in China’s corrugated packaging industry.
(2) Development status of digital jet printing technology
The promotion and application of digital inkjet printing technology in the world is in the stage of rapid development. Manufacturers in the United States, Europe and Japan started early, have mature technology and stable market, and occupy a leading position in many application fields. Among them, in the corrugated packaging digital inkjet printing equipment industry, American HP, American EFI and other companies have strong strength. The paper packaging field has a fast promotion speed and a good development trend, and there are Hangzhou Honghua Digital Technology Stock Company Ltd(688789) , Hanhong group, Shenzhen Wande and other well-known enterprises.
With the improvement of digital jet printing technology (single pass technology is becoming more and more mature) and the decline of nozzle ink cost, the advantages of digital jet printing equipment are becoming more and more obvious not only in short version orders, but also in medium-sized orders, the cost difference between digital jet printing and traditional printing is shrinking rapidly. There are no more than 10 companies worldwide that can provide single pass digital inkjet printing equipment. EFI, HP, Shenzhen Wande and other companies took the lead in applying high-speed inkjet printing technology to the field of corrugated packaging, which has been widely recognized by customers.
In addition to the field of corrugated paper packaging, digital jet printing technology has a wide range of application scenarios, including printing products (advertising, labels, posters), textile printing, ready-made clothing and daily necessities printing, home decoration, ceramics, glass, electronics, automobile and even 3D printing.
(3) 2022 Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) in the field of digital jet printing
The company recognized the huge development prospect of digital jet printing technology in the corrugated packaging industry earlier. In 2017, the company established a joint venture with friends to jointly explore and promote the application and development of digital jet printing technology in the corrugated packaging industry. At the beginning of 2022, the company joined hands with Shenzhen Wande, which was the first to promote digital jet printing technology in corrugated packaging and printing equipment industry in China, and concluded cooperation in the form of capital increase and M & A.
Shenzhen Wande has a complete digital jet printing matrix. Its equipment products are exported to Europe and the United States, the Middle East, Latin America, Southeast Asia and other places. There is a market stock of more than 1300 equipment in more than 80 countries around the world.
Together with Shenzhen Wande, the company is a key step into the field of industrial digital printing. This cooperation is not only conducive to further enrich the product matrix of the company’s corrugated packaging and printing equipment, provide customers with more comprehensive “one-stop” products and services, but also work with Shenzhen Wande to seize the technical and market highland of corrugated packaging digital spray printing. In the follow-up cooperation process, the company will give full play to its comparative advantages of perfect industrial chain layout, realize resource sharing and complementary advantages within the group, provide important support for the healthy and sustainable development of the company and add more guarantee to the overall performance growth.
According to Smithers Pira’s the future of inkjet printing to 2023, in the field of global printing and packaging, the market scale of inkjet printing is expected to reach 109 billion US dollars in 2023, and the annual compound growth rate from 2013 to 2023 is close to 10%; In the field of packaging products, the overall growth momentum of inkjet printing should be more rapid: it is expected that the market scale of packaging inkjet printing will reach US $11.13 billion in 2023, with an annual compound growth rate of more than 12% from 2013 to 2023, which gives Shenzhen Wande and other enterprises focusing on industrial digital inkjet printing broad growth space; The current market scale of industrial digital inkjet printing in China’s packaging industry is small and the base is low, which means that once the volume is large, it will usher in a high growth rate Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) investing in Shenzhen Wande is expected to create the second growth curve of the company’s corrugated packaging equipment business. In the future, its industrial digital inkjet printing line equipment business will become an important engine driving the development of the company.
3. Promote the implementation of digital and intelligent strategies
Based on years of experience in the field of corrugated packaging equipment, deep understanding of the production process of downstream customers and mature practice in the industry production management system, the company will promote the digital upgrading of corrugated packaging equipment, organically combine the production process, the Beijing Vastdata Technology Co.Ltd(603138) and algorithm analysis and processing of production equipment, and integrate hard and soft output, Meet the capacity upgrading needs of customers in the downstream corrugated packaging industry and help the concentration of the corrugated packaging industry continue to improve.
At the same time, the company will continue to unswervingly invest resources and actively promote the R & D and application of “industry smart factory solution” products.
4. Spin off and listing of the subsidiary Yum power
The spin off and listing of the subsidiary Yum power will not only help the company enrich its capital strength and enhance its risk prevention ability, but also help to further open the development and innovation potential of Yum power and realize the full release of its internal value. After the listing of Yum power, it ushered in the rapid growth of its main business and operating performance, which will be synchronously reflected in the overall performance of Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) , so as to improve the profitability and robustness of the company; After the listing of Yum power, the equity value of Yum power held by the company is expected to be further improved and the liquidity will be significantly improved.
The spin off of Yum power will have a positive impact on the interests of Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) shareholders (especially minority shareholders), creditors and other stakeholders.
5. Extension business: make a difference, seek industrial cooperation and expand new development space
In 2021, the company put forward the “1 + n” strategic development mode of common development and mutual promotion of “endogenous + extension” business. “1” is the company’s core and main business, corrugated packaging equipment business. As the cornerstone of the company’s development, the company focuses on focusing, strengthening and expanding, and strives to obtain a higher market share in the development trend of high-end, digital and intelligent times; “N” is the incubation and cultivation of subsidiaries and joint-stock companies.
In 2022, the subsidiary Yineng investment will rely on the advantages of Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) main business related industries, pay attention to high-quality companies in the global and Chinese industrial chain, carry out M & A around the industrial chain according to the business development needs and the actual situation of the company, strengthen the horizontal and vertical integration of the industrial chain, and seek to achieve industrial synergy; Provide management output and resource support to the target companies of industrial M & A to help them become bigger, stronger and better.
At the same time of industrial mergers and acquisitions, Yineng investment will fully participate in the industries encouraged by China’s 14th five year plan. Equity investment will focus on emerging hard science and technology strategic industries such as high-end equipment manufacturing, artificial intelligence, biomedicine and large consumption. Enterprises with broad investment space and good industrial advantages will obtain good investment income at the same time, Expand new industrial space for the group.
3、 Possible risks and Countermeasures in the future
1. Price fluctuation risk of raw materials
The raw materials required by the company’s corrugated packaging equipment products mainly include all kinds of steel sectors, steel parts, electrical parts, etc. In 2021, the prices of iron ore and base metals in bulk commodities fluctuated greatly, resulting in certain fluctuations in the cost of the company’s main business. Looking forward to 2022, the commodity market is subject to the comprehensive influence of macroeconomic and industry cycle, monetary policy, international trade and even geopolitics, covid-19 epidemic and other factors, and the price trend is uncertain.
Countermeasures:
The company will continue to pay attention to the market price of important raw materials such as steel and continue to carry out dynamic analysis and judgment; In terms of procurement, strengthen active management, communication and cooperation, and take countermeasures such as appropriately adjusting the payment settlement method and timely signing long-term purchase agreements for important raw materials to control the fluctuation of raw material purchase prices; Give full play to the resource allocation ability within the group brought about by the global layout of the company’s business assets, and realize the allocation benefits and reduce the overall cost through reasonable planning and management of intra group transactions and sharing high-quality supply chain resources. 2. Integration risk brought by extension business
The extension business includes industrial mergers and acquisitions, equity investment and other forms. The company carries out layout in the field of high-end equipment manufacturing through equity participation, holding and other forms, and looks forward to gradually cultivating new performance growth points in the future.
In the future, the company will continue to expand internationally to the upstream and downstream of the industrial chain where the core main business is located, At the same time, in the national “14th five year plan” “The plan focuses on supporting industries, such as high-end equipment manufacturing, artificial intelligence, biomedicine and large consumption. Among its members, there are not only old European enterprises with nearly a century of history and profound accumulation, but also international enterprises with transnational distribution of business assets and customers all over the world, as well as Chinese enterprises rooted in the Chinese market and striving to become leaders in subdivided industries for many years National enterprises.
In the process of integration, new member enterprises are different from Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) in cultural background, language differences, business practices, corporate culture, laws and regulations, fiscal and tax policies, internal management mechanism and other aspects, which brings certain challenges to post investment management and business integration.
Countermeasures:
• promote the implementation of “globalization” strategy and introduce excellent talents with international business ability;
• promote the implementation of the strategy of “talents in large numbers”, continue to improve the comprehensive ability of the management team and key business backbone team, and build a backbone team that highly recognizes the company’s purpose and culture, is capable and courageous, has a broad vision and can win wars;
• promote the implementation of “synergy” strategy and seek common ground while reserving differences with an open mind on the basis of “mutual respect and trust”;
• implement the post investment management mechanism of “combination of strategic management and control + authorization management”, and form a Guangdong Dongfang Precision Science & Technology Co.Ltd(002611) unique and effective post investment integrated management and control mode in the running in, so as to achieve better Industrial Synergy and benign development of various business entities.
3. Potential risks of financial investment business
Based on the actual situation and development needs of the company, in recent years, the company has moderately carried out financial investment businesses such as securities investment and entrusted financial management with some idle self owned funds.
Based on its own attributes, there are risks in carrying out the above businesses due to financial market fluctuations and income uncertainty
