"Huasheng Times" Secures Tens of Millions of Yuan in Series A Financing to Facilitate Technological Breakthroughs for Domestic Pneumatic Component Manufacturers | HardcoreTech First Report

Author | Wu Ruoyu

Editor | Yuan Silai

HardcoreTech has learned that Huasheng Times (Ningbo) Automation Technology Co., Ltd. (hereinafter referred to as "Huasheng Times") has recently completed a tens of millions of yuan Series A financing round, led by Jinrun Bona, with Shunrong Capital and related resource parties following the investment.

Pneumatic components are key components in industrial automation. They have been applied in the industry since the middle of the last century and have developed rapidly under the influence of industrial automation. After years of precipitation, looking solely at market demand, the electric drive accounts for 15%, while the pneumatic drive accounts for 85%, presenting an overall "two-eight" distribution. According to data from the China Commerce Industry Research Institute, the domestic pneumatic component market size has reached 26.7 billion yuan in 2021. And it is still growing continuously to this day.

In the Chinese market, the main producers of pneumatic components are Festo, SMC, and AirTAC. Compared to international manufacturers such as Festo and SMC, which focus on product stability and high performance and dominate the high-end market, the domestic manufacturer AirTAC is cost-effective-oriented and mainly meets the needs of the mid-to-low-end market. Therefore, domestic enterprises lack control over pneumatic products with high technical thresholds and are easily affected by external changes.

"Huasheng Times" was founded in August 2022, focusing on the research and development, production, and sales of pneumatic components and electric drive products. Currently, its downstream market has entered the semiconductor, photovoltaic, and lithium battery fields.

Huasheng Times product - Valve Island, courtesy of the enterprise

"Huasheng Times" mainly researches and produces control products, such as Valve Islands and Proportional Valves. Its Valve Island products incorporate ordinary pneumatic valves, control of electronic circuits, and communication technologies. Valve Island products not only value design and craftsmanship but also require the ability to design electronic circuits and communication protocols. The greater challenge is the reliability of the product after several single valves are combined to form a Valve Island, which is also a pain point for domestic manufacturers in catching up with the technology. Simply put, if the reliability of a single valve is 95%, the reliability of a Valve Island, which is usually composed of 4 to 24 valves, will drop sharply. When the product is applied in a highly integrated automated production line with an accelerated output frequency, the requirement for product reliability is even higher. Currently, the Valve Island products that "Huasheng Times" has developed have reached the international first-class level.

The research and development in the fields of pneumatic and electric drive is a combination of mechanical, electrical, software, and algorithms. Currently, the R & D personnel of "Huasheng Times" account for half of the total number, including experts and engineers in various product categories. Among them, 50% of the R & D personnel have a master's or doctoral degree.

It is worth noting that, unlike the reverse development idea of disassembling advanced products on the market, "Huasheng Times" starts from the mechanism, material characteristics, and mathematical models of the product, especially considering the future market trends of lightweight, energy-saving, and high efficiency. It mainly adopts a forward development approach to improve product performance. Xie Zugang, the R & D director of "Huasheng Times," gives an example: "On the market, the electrical proportional valves are generally considered with a control accuracy of 1%, but the dynamic performance of most products cannot reach 1%. However, this type of product of Huasheng Times can be stabilized at 0.5%."

Exploring the differences of enterprises from the perspective of technology research and development avoids the product from getting caught in the price involution to a certain extent.

Huasheng Times factory, courtesy of the enterprise

The "Huasheng Times" factory is mainly located in the eastern China region, close to the supply chain, for the convenience of timely responding to product research and development and customer needs. Up to now, the company has established seven production lines, including two fully automated production lines, with a full production output value of 200 million yuan. At the same time, it assesses suppliers with the IATF16949 system and uses the SPC system to control quality.

In terms of the team, the core team of "Huasheng Times" has an average of 20 years of industry experience. Among them, Chen Hong is responsible for the overall planning. He has worked in Siemens, Philips, Procter & Gamble, and Sandvik, and later served as the person in charge of production, operation, and sales at Festo, promoting Festo to complete the China strategy; Xie Zugang focuses on R & D and served as the person in charge of the R & D technical team in Festo's China strategy; the factory director Song Zhaofeng is in charge of the supply chain and has 9 years of IATF16949 system management experience.

Facing the rapid development of the industry, the founder Chen Hong told HardcoreTech that energy saving, intelligence, and digitization are the established directions of the automation industry, and informatization and intelligence are the core demands of the industry in the future. In the future, "Huasheng Times" will continue to expand the capabilities of input and output technology and product edge computing.

Investor's Perspective:

Mao Mengtao, Vice President of Investment at Shunrong Capital: Pneumatic components are a typical long-term and promising track. They have been applied in the industrial field since the middle of the 20th century. With the rapid development of industrial automation, in the 21st century, the application scenarios of pneumatic components are continuously increasing and updated, and the demand for pneumatic components has also expanded from the demand for quantity to the demand for high performance. The iterative upgrade of pneumatic products with the core demands of high efficiency, reliability, energy saving, and digitization can be predictably become a huge potential growth point in the pneumatic component market.

Pneumatic components are a global market with a scale of hundreds of billions of yuan, of which the demand in the Chinese market exceeds 30 billion yuan. With the booming development of the global automation industry in the past few decades, China has given birth to world-class giant enterprises in the automation field. However, as the foundation and indispensable key category in the automation field, pneumatic components have been monopolized by foreign enterprises such as SMC and FESTO. China has never had a truly globally influential pneumatic component enterprise.

And the Huasheng team set the development vision at the beginning of the entrepreneurship, committed to creating an influential Chinese pneumatic component enterprise. Centered around Huasheng's strategic goals, the team makes a firm investment in product research and development. Different from the "me too" product research and development strategy of domestic pneumatic peers, the team truly focuses on the underlying technological innovation in the pneumatic industry, paying attention to the product structure, materials, processes, and control logic. The company adheres to the "first principles" of product development to provide valuable and more cost-effective products for industry customers.

It is believed that under the leadership of Mr. Chen and with unwavering strategic determination, Huasheng Times has the opportunity to grow into a truly world-class enterprise in the pneumatic industry.