① The net profit of the first listed annual report fell 18.44% year on year. One of the “prescriptions” prescribed by Xia Xia Precision was to increase overseas production capacity; ② In 2023, the export business of Xia Xia Precision was not as good as expected. Last year, the company's export revenue fell 26.48% year on year.
Financial Services Association, May 13 (Reporter Wang Bin) The net profit of the first listed annual report fell 18.44% year on year. One of the “prescriptions” prescribed by Xia Xia Precision (001306.SZ) was to choose to increase overseas production capacity.
This evening, Xia Xia Precision announced that it plans to invest in the construction of a project with an annual output of 1 million precision transmission structure products in Vietnam. It plans to invest no more than 15 million US dollars (equivalent to about RMB 109 million at the exchange rate on the day of the announcement), including but not limited to matters related to establishing relevant wholly-owned subsidiaries, purchasing or leasing land, and purchasing fixed assets.
Specifically, the above project plans to rent a plant in the TT plot of Fuxin Industrial Park in Tulongmu City and Phu Fang Binh Duong Industrial Service City Joint Zone in Vietnam's Binh Duong Province for production, storage, and office; the total construction period of the project is expected to be 7 months, that is, from August this year to February next year.
Xiaxia Precision stated in the announcement that this investment will help the company develop overseas markets, increase the overseas supply capacity of products, and better meet the order needs of international customers. It will also help the company to respond more flexibly to macroeconomic environmental fluctuations, industrial policy adjustments, and reduce the potential adverse effects that changes in the international trade pattern may have on the company.
In recent years, more and more enterprises are choosing to “go global” and seek a wider space for development. According to the announcement, Ruiming Technology (002970.SZ) recently stated in an investigation by institutional investors, “Our main purpose of establishing overseas factories is not simply to improve the efficiency of the supply chain, but to ensure a more stable and secure supply chain for overseas customers due to strategic considerations.”
“As far as benefits are concerned, frankly speaking, overseas factories are probably not as efficient as expected. However, when we comprehensively consider factors such as strategic objectives and the impact of tariffs, we can conclude that this layout is cost-effective. Apart from being able to avoid tariffs (for example, products entering and leaving the US can be exempted from tariffs after Vietnamese localization obtains a certificate of origin), more importantly, this layout makes our customers feel more secure. In the current global economic environment, the stability and security of the supply chain is critical for customers.” Sharp Technology says so.
In the 2023 annual report, when discussing this year's business plan, Xia Xia Precision stated that in the future, the company will seize the “Belt and Road” development opportunities, take the opportunity to find suitable regions to build overseas factories, further reduce the company's product costs, and increase the share of the company's products in overseas markets.
In fact, the export business of Xiaxia Precision in 2023 was not as good as expected. According to financial data, the company's export revenue last year was 789.77,800 yuan, a year-on-year decrease of 26.48%, accounting for only 14.96% of revenue. However, although the gross margin of the company's export business decreased by 6.58 percentage points to 38.77% year on year in 2023, it was still 11.04 percentage points higher than the gross margin of the domestic sales business.