Following Shanghai Laisai (002252.SZ), Haier intends to acquire another A-share company. Unlike before, this time Haier is focusing on the industrial robot sector. On February 17, Haier, through its subsidiary Qingdao Haier Kaos Industrial Intelligence Co., Ltd. (hereinafter referred to as "Kaos Industrial Intelligence"), signed a "Share Transfer Agreement" and a "Voting Rights Entrustment Agreement" with the original actual controllers of Xinshi Da (002527.SZ), Ji Defa, Liu Liping, and Ji Yi, to take control of Xinshi Da, with a transaction amount of 1.3 billion yuan. At the same time, Kaos Industrial Intelligence will also subscribe for 153 million shares issued by Xinshi Da at a price of 1.222 billion yuan. In total, the cash transaction amounts to 2.522 billion yuan. After the transaction is completed, Xinshi Da will become Haier's seventh listed company. Although Xinshi Da's financial performance has been average, it has deeply laid out the upstream and downstream industrial chain of industrial robots and independently developed core component controllers—the brain of industrial robots. After acquiring Xinshi Da, Haier will have the support of core technology for its future development in the industrial robot sector, and the overall research and development of robots is expected to accelerate. Layout "Pivot" According to the plan, the original actual controllers of Xinshi Da, Ji Defa, Liu Liping, and Ji Yi, will transfer 10% of their shares in Xinshi Da to Kaos Industrial Intelligence at a price of 19.61 yuan per share, totaling 1.3 billion yuan. This represents a premium of over 90% compared to Xinshi Da's closing price on February 7 when it was suspended from trading. At the same time, the three will also entrust the voting rights corresponding to the remaining 19.24% of their shares in Xinshi Da to the latter and promise not to seek control. Thus, Kaos Industrial Intelligence will control a total of 29.24% of the voting rights in Xinshi Da, becoming the controlling shareholder, and Haier Group will become the new actual controller of Xinshi Da. Xinshi Da has been in a state of loss for nearly three years. In 2022 and 2023, the net losses reached 1.06 billion yuan and 379 million yuan, respectively, with an expected loss of 185 million to 367 million yuan in 2024. The debt pressure continues to increase. As of the end of the third quarter of 2024, Xinshi Da's asset-liability ratio was 66.99%, an increase of 8.72 percentage points year-on-year, while cash and cash equivalents amounted to 406 million yuan during the same period. Despite the poor financial performance, what Haier values may be Xinshi Da's accumulation in the industrial robot supply chain. Currently, the two main businesses supporting Xinshi Da's revenue are robots and control drives. In the first half of 2024, these two businesses generated revenues of 805 million yuan and 304 million yuan, accounting for 53.1% and 20.07%, respectively. Xinshi Da's industrial robot shipment volume is quite impressive, with its SCARA robots ranking second domestically and fourth globally from 2020 to 2023. In terms of technology, Xinshi Da is the first company in China to complete the research and development of integrated drive and control products for robot control, and its control system has now been iterated to the fourth generation, accumulating a wealth of algorithms. From a structural perspective, reducers, servo systems, and controllers are core components, and companies with relevant core technologies are scarce in the Chinese market For example, as one of the few Sci-Tech Innovation Board IPO projects accepted by the Shanghai Stock Exchange in 2024, Zhejiang Huandong Robot Joint Technology Co., Ltd.'s main product is the RV reducer. The controller is equivalent to the brain of the robot, responsible for interpreting and transmitting action commands. Although the four major foreign industrial robot families (ABB, Fanuc, KUKA, and Yaskawa) purchase reducers and servo systems externally, they have always insisted on independently developing controllers, which highlights the importance of this technology. Because of this, gaining control of Xinshida also means that Haier Group's industrial robot layout has a fulcrum, allowing for further expansion. However, challenges also exist. In fact, Xinshida still has gaps compared to its peers. In 2023, Estun (002747.SZ) shipped over 24,000 industrial robots, ranking first among domestic manufacturers. Estun recognizes the importance of self-produced core components and also possesses fully independent robot controllers, operating systems, and servo systems, with a self-sufficiency rate of over 90% for core robot components; Huichuan Technology (300124.SZ) controllers have long been used in various industries, with a market share of 15.3% for small programmable controllers in China, ranking second, only behind Siemens. Whether in industrial robots or market performance of core components, Xinshida still lags behind leading companies. Integration Expectations Historically, due to overall revenue contraction, Xinshida's investment in R&D has not been generous. In the first half of 2024, Xinshida's R&D expenses were 101 million yuan, accounting for 6.67% of its revenue; during the same period, Estun, Huichuan Technology, and Reeco Intelligent (002979.SZ) had R&D expense ratios of 9.54%, 9.1%, and 11.72%, respectively, all higher than Xinshida. Haier's support for Xinshida also brings resource backing. On one hand, Haier will share global supply chain, digital marketing, and other capabilities with Xinshida; On the other hand, Xinshida plans to issue 153 million shares to Kaos Industrial Intelligence at a price of 7.99 yuan per share, raising a total of 1.222 billion yuan, mainly for liquidity support. "This is beneficial for the company to continuously enhance its R&D technical capabilities around robot products and system businesses, control and drive products and system businesses, and elevator control products and system businesses, providing customers with high-quality comprehensive solutions for intelligent manufacturing, promoting digitalization and intelligence strategies, and providing financial support for the growth and strategic layout of core industrial control automation businesses," Xinshida pointed out. Without considering voting rights, after the issuance is completed, Kaos Industrial Intelligence will directly hold 26.83% of Xinshida, which can further consolidate control. With real financial investment and resource support, Xinshida's future development is highly anticipated. However, as the acquirer in this transaction, Kaos Industrial Intelligence, established on February 6, 2025, has a short establishment time, and whether Haier will continue to integrate Xinshida with other companies under the Kaos brand is also a matter of concern. In fact, Haier's previous acquisition of Shanghai Laishi was also completed through the newly established company Qingdao Haiying Holdings Co., Ltd., and it was not until the end of 2024 that it planned to absorb and merge Shanghai Laishi through its subsidiary Haier Bio (688139.SH) to promote coordinated business development However, due to the complex transaction structure, Haier Biomedical's absorption and merger with Shanghai Laisai has temporarily come to a halt and has not yet been realized. Whether Haier's acquisition of New Times will also follow the previous integration path remains to be observed. TradeWind (ID: TradeWind01) noted that in September 2024, Haier's industrial internet platform, Caos IoT Technology Co., Ltd. (hereinafter referred to as "Caos"), has been guided and filed with the Shandong Securities Regulatory Bureau, officially starting its IPO process. According to Haier's explanation, the capabilities of the Caos industrial internet platform in big data, large connectivity, and large models will integrate with New Times' rich products and technologies in the field of industrial automation. Against the backdrop of technological integration, there is anticipation regarding whether Haier will take the lead in further integrating Caos and New Times. "Currently, the pace of domestic IPOs has slowed down, and the number of accepted projects is limited, making it difficult to go public. If Caos and New Times have more cooperation in the future, related transactions may also increase. From this perspective, further integration actions cannot be ruled out," pointed out an investment banker in Beijing. "For example, is there a possibility of using New Times as a listing platform to integrate related entities under Haier's layout?" However, a person close to Haier Group told TradeWind (ID: TradeWind01): "Caos is currently in the IPO guidance stage, and the company is conducting standardized management and operations for IPO enterprises according to independence requirements such as personnel independence, business independence, financial independence, and management independence." The Vision of Robotics in Home Appliances Haier is not the first home appliance company to layout industrial robots. As early as 2017, Midea acquired KUKA Group for 29.2 billion yuan, deeply laying out industrial robots, which is one of the largest overseas mergers and acquisitions in Midea Group's history. Gree Electric Appliances (000651.SZ) promotes its self-research, claiming to have achieved a full range of robot product loads from 1kg to 600kg, applicable to various industrial scenarios such as machinery manufacturing and automotive parts processing. In early February this year, Gree Electric Appliances' chairman Dong Mingzhu stated in an interview: "Gree has been working on robots for many years. Through over a decade of independent research and development by the team, Gree has conquered core component technologies such as industrial robot drivers and reducers." Overall, Midea and Haier's strategies are becoming increasingly aligned, accelerating their development in the robotics industry through acquisitions. In addition to improving production efficiency, there may also be anxiety among these home appliance companies about robots replacing home appliance products. In fact, Haier has already set its sights on household robots. In March 2024, Haier and Leju Robotics jointly launched the general-purpose humanoid robot KUAVO (Chinese name "Kua Fu"), capable of performing hand operations such as watering flowers and arranging flowers. With the core controller technology from New Times, Haier's household robots may be on the verge of an upgrade. The capabilities of both can also be transferred. For example, although ABB is deeply engaged in industrial robots, it has gradually ventured into the home sector in product design—ABB's smart home solutions include dimming lights, opening blinds, and automatic temperature control in bathrooms After Midea acquired KUKA, the former is also expected to leverage KUKA's technological accumulation in industrial robots to extend its business into household robots. "Midea does not engage in any robot or automation business, so KUKA is Midea's automation business," said former KUKA CEO Till Reuter. "They are closely connected to the consumer market, so we will jointly develop consumer robots." In 2022, Midea launched the household service robot brand "WISHUG" and its first-generation household service robot products, but so far, they have not made much of a splash in the market. "Compared to household robots, industrial robots may have higher precision. However, for a general-purpose household robot to become popular in the market, it must offer good quality at a reasonable price," pointed out a consumer industry insider in Beijing. From the current domestic and international situation, the prices of general-purpose household robots remain high. In 2024, Google DeepMind and Stanford jointly launched Mobile ALOHA, which can perform tasks such as meal preparation, stir-frying, serving, laundry, playing with cats, and watering plants, but the cost is still around 200,000 yuan. "The cost of Stanford's Mobile ALOHA robot is 220,000 yuan. Although the technology is advanced, it is still a significant expense for ordinary consumers. Currently, most household robots on the market are positioned in the high-end market with high prices, and in the future, we may need to think about how to reduce costs," said a consumer industry investor from the south