Written by: Poetry and Starry Sky (ID: SingingUnderStars)
On March 2, the Chief Engineer and Spokesperson of the Ministry of Industry and Information Technology, Tian Yulong, stated that China has built the world’s largest mobile Internet of Things (IoT), with a connection count reaching 1.845 billion households, accounting for over 70% of the global total connections, making it the first major economy to achieve “IoT surpassing human capabilities.” The mobile IoT has achieved large-scale applications in digital city construction, smart manufacturing, smart transportation, mobile payments, and other fields. This has profoundly impacted our lives, changing our way of living.
In fact, China is one of the earliest countries to establish an industrial IoT, with the most in-depth development being the ubiquitous power IoT of the State Grid.
The A-share market has nurtured a large number of related listed companies within the State Grid system, ranging from software platforms to sensors to hardware devices…
What is the most critical aspect of the industrial IoT?
The professional term is “perception.”
Perception refers to the use of various sensors to collect data and convert various states into digital signals for transmission over the network.
For example, inspection of power equipment in remote mountains and wilderness areas is now largely replaced by sensors instead of manual labor.
The core business of Weisheng Information primarily targets the IoT for power systems.
01
Types of Products
As a supplier to the power system, the company initially focused on custom manufacturing of power detection equipment.
1. Perception Layer
The multifunctional monitoring instruments of the power system can remotely collect relevant data: voltage, current, power, frequency, electrical energy, switch status, digital input, temperature and humidity, and other analog inputs.
These devices have replaced manual inspections, reducing employee risks and labor costs.
Combined with IoT traffic cards and solar power panels, such devices can achieve unattended operations in remote areas, with data automatically uploaded.
Based on the power system, the company has also collaborated with the water supply system to produce smart devices such as remote water meters.
2. Network Layer
After the perception devices collect data, it is uploaded through network devices produced by the company. This is primarily based on IoT technology and can be applied to 2G, 3G, 4G networks, especially in the 5G era, which has a tremendous impact on IoT, enabling long connections and low latency, leading to many revolutionary improvements.
3. Application Layer
Once the data is uploaded to the data center of the power and water systems, the company’s platform system analyzes this data, generating graphical interfaces that facilitate decision-making. For major faults such as power outages, processing can be done in seconds.
02
Annual Report Data
The company’s 2022 annual report shows that it achieved an operating income of 2.004 billion yuan, a year-on-year increase of 9.75%; a net profit attributable to shareholders of the listed company of 400 million yuan, a year-on-year increase of 17.20%; and a net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses of 387 million yuan, a year-on-year increase of 23.81%.
Data Source: Tonghuashun iFind, Illustration: Poetry and Starry Sky
From the revenue composition, the network layer achieved revenue of 1.245 billion yuan, accounting for 62.46% of the main operating income, with a year-on-year growth of 10.12%; the perception layer achieved revenue of 628 million yuan, accounting for 31.48% of the main operating income, with a year-on-year growth of 8.50%; and the application layer achieved revenue of 121 million yuan, accounting for 6.06% of the main operating income, with a year-on-year growth of 10.41%.
Recently, a video went viral showing a factory entrance packed with job seekers, but the recruiter shouted, “Anyone born in 1986 or earlier, you can leave.”
In fact, this might be the last arrogance of such factories.
With the aging population and the advancement of industrial upgrades, China’s labor force will become increasingly scarce and expensive (despite the current difficulty in finding jobs, with the retirement of the golden generation of the 60s and 70s, the population age structure will quickly reverse). Some low-value-added jobs will gradually become automated and unmanned. Companies that do not invest heavily in production line upgrades will be eliminated in the wave of industrial upgrading.
Even in some unimaginable fields, sensors are starting to emerge.
The IoT perception devices (sensors) and network devices are a thriving industry.
The annual report also mentioned the order situation. As of December 31, 2022, the company had contracts worth 2.516 billion yuan on hand, a year-on-year increase of 42.19%; new contracts signed in 2022 amounted to 3.176 billion yuan, a year-on-year increase of 28.42%, providing strong support for future performance development.
03
Overtaking on the Curve
The industrial IoT is a relatively new track, and Chinese enterprises do not have a technological gap compared to established giants in developed countries. Especially with technologies combining 5G, cloud computing, and other concepts, Chinese companies are basically maintaining a position in the first group. This is largely related to the market, as China has the largest industrial IoT market in the world.
In fields like smart grids and smart cities, those who can establish a foothold in the market are not necessarily the ones with the strongest technological capabilities.
These industries have high barriers to entry; from design to R&D to testing, close collaboration with industry giants is required. Typically, teams with many years of experience in related industries are the ones who can integrate into this sector.
The company’s products and services have gained wide recognition from well-known clients such as the State Grid, Southern Power Grid, China Unicom, and Siemens, gradually establishing its own brand and securing its market position. The company has signed a strategic cooperation agreement with Alibaba Cloud IoT, both committed to building a distinctive IoT industry centered on technological innovation and participating in the infrastructure and commercialization of smart public utilities.
Of the company’s 2 billion yuan in revenue, about 300 million yuan comes from overseas.
As a company heavily reliant on the power grid system, this proportion is not low. At the same time, it indicates that the true international presence is the State Grid, with the company being its supporting supplier.
According to the annual report, the company actively participates in the economic development along the “Belt and Road” and the construction of the energy internet, continuously increasing R&D and sales investments in overseas markets, seizing opportunities for energy infrastructure development in emerging markets such as Latin America, the Middle East, and Africa. The company leverages its comprehensive advantages in products, technology, and system applications, continuously participating deeply in the construction of the power IoT in overseas regions, further increasing market share; using comprehensive energy solutions for electricity, water, gas, and heat as an opportunity to actively expand the overseas urban IoT market.
On December 5, 2022, a Saudi-China capacity cooperation investment promotion meeting and signing ceremony was held at the headquarters of the Royal Commission in Riyadh, where Weisheng Information Technology Co., Ltd. signed a memorandum of cooperation for the production project of smart meters in Saudi Arabia.
Starry Sky checked the information, and Zhang Zhigang, General Manager of the State Grid, attended the 10th Saudi Smart Grid Forum via video in December 2022, delivering a speech titled “Working Together to Promote the Construction of a New Power System.”
During the forum, a contract exchange ceremony for the digital intelligent ring network cabinet project of the Saudi distribution network was held. This project is another key national project undertaken by China Electric Power Technology Equipment Co., Ltd. after the Saudi smart meter project.
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