Topstar recently released its 2017 annual performance forecast, projecting a net profit of between 130 million and 145 million yuan, representing a significant increase of 67.58% to 86.92%. This growth follows a strong track record, with the company achieving a compound annual growth rate (CAGR) of 47.13% in operating income and 32.58% in net profit from 2012 to 2016. The company has been steadily expanding its influence in the industrial automation sector, positioning itself as a key player in smart manufacturing.
During an interview with China Securities Journal, Wu Shili, Chairman of Topstar, emphasized the importance of stability over rapid expansion, stating, “Stability is better than good,†and “stepping on the brakes.†He outlined a vision for Topstar to become a comprehensive service provider in the industrial robot industry, integrating three key stages: system integration, ontology manufacturing, and software development. By building a healthy ecosystem, Topstar aims to create mutual benefits for both upstream and downstream partners, fostering long-term collaboration within the industry.
Wu’s strategy revolves around opening up the entire industrial chain to promote sustainable development. He recognized that direct competition with global giants would be challenging, and instead, Topstar focuses on creating value through integration and innovation. This approach allows the company to avoid the pitfalls of fragmented domestic competition while supporting the broader industry's growth.
To achieve this, Topstar leverages its extensive network of more than 30 offices nationwide, 200 marketing staff, and a customer base of 4,600 companies, including major names like Midea, Haier, BYD, and Great Wall Motor. The company’s business model is likened to a restaurant that integrates all aspects of production, from raw materials to final products, ensuring tailored solutions for clients.
From 2013 to 2016, Topstar maintained over 90% direct sales, strengthening its position as a key integrator. Its strong channel network gives it significant bargaining power with suppliers, allowing it to negotiate favorable terms while offering customized automation solutions to downstream manufacturers. This has contributed to a high gross margin of 49% in the first half of 2017, placing it among industry leaders.
In addition to its integration efforts, Topstar invests heavily in R&D, maintaining a high R&D expenditure ratio. In the first half of 2017 alone, R&D costs surged by 143.6% year-on-year. The company has made breakthroughs in core technologies such as control systems and servo mechanisms, making it one of the few integrators with deep technical expertise.
Looking back at its 11-year journey, Topstar’s growth mirrors the rapid expansion of China’s industrial robot market. With the demographic dividend fading, the demand for automation has surged, leading to a CAGR of 46.5% between 2009 and 2016. In 2017, cumulative output reached 118,200 units, showing a 68.8% year-on-year increase.
Despite this momentum, Wu Fengli advocates for a more measured approach, emphasizing the need to “step on the brakes†rather than rush. His philosophy, rooted in the lessons learned during the 2008 financial crisis, prioritizes long-term stability over short-term gains. He believes that rapid growth must be balanced with careful planning and team development.
Topstar also places great emphasis on corporate culture, viewing the company as an entrepreneurial platform rather than just a workplace. Equity incentives have been a key part of its strategy, helping retain top talent and aligning employees with the company’s long-term vision. Wu often writes articles in the internal journal, reinforcing values such as trust, unity, and shared success.
Ultimately, Wu’s leadership has shaped Topstar into a resilient and innovative force in the automation industry. By focusing on stability, integration, and long-term growth, the company continues to navigate the challenges of a dynamic market while striving for sustained success.
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