00:00Thank you so much for joining us. I know you just came from the exchange.
00:03Yes.
00:03Are you surprised by this sort of turnout here?
00:05Yes. For me, it is a great surprise. I didn't expect that it can go this much.
00:11But I know people, you know, we have gained oversubscription.
00:17So I think it's also beyond my wildest expectations.
00:22Tell us a little bit more about the business model. Where do things stand right now?
00:26I mean, in terms of the real world use of your robots,
00:28can you tell us a bit more about what the industrial automation world looks like for you now?
00:32Yes. I think the China, you know, 14 years ago, when I just started my company,
00:39the China robotic players only account for 3% of the market share domestically.
00:45So at that trend, you know, our robot companies highly depended on the performance of our downstream customers.
00:53If they have a high demand and we can go better.
00:56So at that time, the automation lines for car industries dominated the market.
01:02So at that time, we have the big four houses, that is ABB, Fanuc, Yaskawa, and KUKA.
01:10And they are specialized in the car industries.
01:13But nowadays, especially consumer electronics dominate the market.
01:17So this gives us a chance to come up with competitors and because the requirement for the different industries is
01:25quite different.
01:26So we build more smarter, more faster, more lighter, and with more with higher precision robots to use for the
01:33consumer electronics.
01:35So that's why we can come up with, you know, with the foreign competitors and gain a market share.
01:42On the note on foreign competitors, what's the international strategy, especially given some of these geopolitical concerns in the backdrop?
01:52Yeah, I mean, you know, basically we have two main strategies to go into the international market.
01:59The first one is to follow our big customers, because we have some already existed customers in China, like the
02:06Lens, Gore-Tag, or Foxconn, this kind of customers.
02:09And they also have factories overseas.
02:12And normally when they, you know, expand their foreign factories, they will recruit their existing suppliers to help them to
02:22build the automatic lines.
02:24And the second one is to, you know, hire some distributors in different countries.
02:30We already have seven existing distributors all across Southeast Asia, Europe, North America, Australia, et cetera.
02:38So, and we will, you know, use our 10% of our net proceeds to expand our network overseas.
02:46So, which will help us to, you know, sell more robots into our foreign customers.
02:55One of our guests earlier highlighted Malaysia, Thailand, when they look at Southeast Asia as markets.
03:03I wonder, what is your sense of which pockets in these markets have most potential for your business to grow?
03:14Yes, we have already have many, you know, customers in Vietnam, Thailand, Singapore, Malaysia, this kind of, and also Indonesia,
03:27this kind of Southeast countries.
03:29And normally we, our robots is helping the consumer electronics lines, and also the food and beverage lines, and also
03:38some daily chemicals lines.
03:40And we have just launched an automatic warehouse in Malaysia, which works very good.
03:45And I think since the Southeast Asia is also, the market of Southeast Asia is also booming, and which gave
03:52us a better chance to help them, you know, directly get into the automatic line.
04:00And it escaped the, you know, human labors.
04:02Yeah.
04:03Tell us a little more about the supply chain.
04:05I mean, how dependent do you think is China's robotics industry to U.S. technology components, for example, when it
04:11comes to, like, sensors, software tools, and the like?
04:13You know, I, you know, I always think, you know, the U.S. talents have some gift to, you know,
04:20invent some, you know, brand new things.
04:23For example, start from this, you know, big data and VRA, and they started in Silicon Valley.
04:29But, you know, our Chinese people also have the talents to, you know, to scale it up, right?
04:37So we can follow the trend and make our own techniques.
04:43How much of your supply chain is now domestically based?
04:47We can do 100 domestically based.
04:50You can?
04:50Yes.
04:51Wow.
04:52In terms of just overall the competitive landscape, right?
04:55There's so many robotics companies coming through here.
04:58Yeah.
04:59I mean, there's obviously the humanoid space as well, but everyone's talking about hundreds of these sort of companies that
05:03are emerging in China.
05:05Do you think it's a bit too crowded?
05:07I think it's a normal, you know, normal pattern.
05:10You know, and you can see in other industries, this happens a lot, right?
05:14But time after time, there will be some dominant players, and there will be some merge and acquires.
05:22And also, and I think, you know, maybe in five or ten years' time, there will be some big players,
05:28like the, you know, past four big houses existing in China.
05:32And we are, you know, we are a company focused on in the light industry, and we are all-inclusive
05:39robot body and solutions suppliers.
05:41And I think we are on the right track and on the right path.
05:44Maybe we hope we can become one of the big players in here.
05:50What about the path to profitability?
05:52What does that look like for your business?
05:56Yes.
05:56And, you know, we have some very crystal clear paths to the profitability.
06:02The first one is to increase the sales ratio of our robot bodies, because we have many kinds of robot
06:10bodies.
06:11And the gross profit margin for the robot bodies is better than the solutions.
06:16And since we can sell more amount of our robot bodies, and we can benefit from the economy of skills,
06:24and also can improve our, and we can also build our automatic lines, which is use our robots to build
06:32our robots.
06:33And the second one is to increase the high-tech products.
06:39For example, our semiconductor products is very, is one of the examples.
06:44For example, we have launched a whole series of our wafer handling robots, and all have the TUV certificate of
06:55S2 certificate, and they have a better profit margin.
06:59And the third one is to, you know, go deeper into the foreign market, and to help the overseas countries
07:07to improve their automatic level, and which can, which can give us a brand new market.
07:16You talked earlier about how your supply chain can almost be 100% domestic.
07:23I wonder how much are you expecting your export numbers to account for the business, say, two, three years for
07:30now?
07:31What's the ratio going to be like?
07:36You know, last year, 10% of our revenues is acquired from the foreign customers, and we will increase the
07:45number this year.
07:47Maybe, let me guess, maybe increase by 1 or 2%, maybe to our 12% of our revenues this year
07:56will be coming from our overseas customers.
08:00Would you look into humanoid robots?
08:02Yes, of course.
08:03You're interested?
08:04Yes, we have launched our humanoid robots last year, and we give it a name called Whole Gene.
08:11Yeah, it's a whole, you know, whole new gene, right?
08:15Whole new gene, I love that.
08:15Yes, a whole gene.
08:17And our humanoid robots can work side by side with our traditional industrial robots.
08:23Because our industrial robots can do the fast and precise and rigid things, but we also need some, you know,
08:31versatile and flexibilities, and for this part, humanoid can add a better value for this part because they can learn,
08:39right?
08:40They can only maybe listen to our oral instructions or maybe just mimic the performance of the human beings and
08:46can do it by it all.
08:47All right, using robots to build robots.
08:49I love it.
08:50Zhang Tsai, thank you so much for joining us here.
08:52Zhang Tsai, they're chairman of Robot Phoenix Intelligent Technology here, just listening today in Hong Kong.
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