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Since the beginning of this year, as global trade has shown a recovery, my country's import and export of goods has delivered a good "report card". Public data shows that in the first half of the year, the total value of my country's import and export of goods was 21.17 trillion yuan, a year-on-year increase of 6.1%.

The scale of trade has reached a new high, and the overseas performance of a number of listed companies is also quite impressive.

According to data from 10Jinhuashun, in the first quarter of this year, there were 218 listed companies in the A-share cross-border e-commerce concept sector, covering different industries such as transportation, commerce and retail, media, automobiles, home appliances, and light manufacturing.

Among them, in the machinery and equipment industry, Giant Star Technology's performance is "far ahead", with a net profit of 428 million yuan in the first quarter, 2.29 times that of the second-ranked Greebo; it ranks 13th in the entire cross-border e-commerce concept sector, demonstrating strong "cash ability".

From a small workshop to a leading hand tool company

Public information shows that Giant Star Technology was founded in 1993. At first, it was just an inconspicuous small workshop that focused on producing simple tools such as watch screwdrivers.

As time went by, Giant Star Technology gradually emerged in the tool industry. From 2005 to 2009, the company gradually established its leading position in the domestic tool ODM industry by providing ODM services to overseas giants.

Since then, the company has gradually transformed into OBM through continuous acquisitions and integrations, and has achieved a diversified layout, entering into multiple fields such as laser intelligent tools and storage cabinets, step by step realizing the leap from a local enterprise to a global enterprise.

In 2023, the total number of SKUs of Giant Technology will exceed 30,000, with non-hand tool categories accounting for nearly 40%. It will become the world's top two manufacturer of laser measuring instruments and tool storage boxes and cabinets, with revenue outside of China accounting for more than 90%.

Compared with its peers, Giant Star Technology has three obvious advantages:

First, we are committed to the acquisition of international leading brands and the development of our own brands. In 2023, the company signed a contract to acquire the Swiss TESA and British SCRUFFS brands, and will continue to use them to develop high-precision measuring instruments and personal workwear products in the future. At the same time, the company continues to enhance the influence of its own brands. The sales revenue of brands such as WORKPRO, DURATECH, EverBrite, and Prexiso has increased rapidly year-on-year, and the overall sales revenue of its own brands is close to 50%.

The second is the channel advantage. Currently, there are more than 20,000 large hardware, building materials, auto parts and other chain supermarkets around the world that sell the company's various products at the same time. The company also increases the proportion of DTC (Direct To Customer) business through direct cross-border e-commerce, acquisition of European and American distribution channels and establishment of Asia-Pacific distribution channels, directly reaching terminal retail customers, obtaining first-hand feedback, and feeding back to R&D innovation.

The third is the global supply chain management system. Relying on the perfect warehousing, logistics and distribution system in China, the United States and Europe and 21 production and manufacturing bases around the world, the company can achieve global procurement, global manufacturing and global distribution. At the same time, the company's own perfect distributed manufacturing and processing system can greatly reduce the comprehensive manufacturing and procurement costs and enhance the terminal market competitiveness of the company's products.

Steady growth in performance

Since its listing in 2010, Giant Star Technology has maintained a solid financial position.

The company's gross profit margin has remained stable at around 30% for many years, which is much higher than the industry average, indicating that the company's products have high added value and market competitiveness; the net profit margin has remained at around 15% for many years, which shows that the company has performed well in cost control and profitability.

Under the influence of DIY culture, North America and Europe have become the most important and highest-proportion markets in the global tool industry. In 2023, due to the high interest rate environment in Europe and the United States, the terminal consumption of the tool industry continued to decline in the second half of 2022. Coupled with the large-scale active destocking by channel retailers, the industry's growth rate in the past 18 months has been the worst year-on-year in the past 30 years.

Giant Star Technology was not immune. In 2023, the company's operating income decreased by 13.32% year-on-year, but its net profit attributable to shareholders still increased by 19.14% year-on-year.

Since the beginning of this year, as the inventory of channel retailers has dropped to a historically low level, the tool industry has ushered in a new round of demand recovery and replenishment orders. The performance forecast released by Giant Star Technology shows that it is expected to achieve a net profit of 1.091 billion yuan to 1.178 billion yuan in the first half of 2024, a year-on-year increase of 25% to 35%.

The performance growth was mainly due to the new products launched by the company in the first half of the year, such as power tools and special cabinets, which increased market share, as well as the recovery of tool demand brought about by the easing of inflation in Europe and the United States, and the recovery of downstream customer orders. In addition, the growth of the company's revenue scale and the commissioning of the Southeast Asian manufacturing base also significantly improved profitability.

Buy globally, sell globally

The reason why Giant Star Technology has been able to achieve such results is inseparable from the pull of external mergers and acquisitions. In addition to the personal protective equipment business, the growth of Giant Star Technology's original business and the expansion of new business mainly rely on external mergers and acquisitions.

As early as 2010, Giant Star Technology acquired the hand tool-related assets of four companies, including Goldblatt Tool, Crescent Tool, Sioux Tools, and Powers Fasteners, swallowing up 11 well-known hand tool brands. Later, it entered the niche industries of door and window hardware, nail guns and consumables, storage cabinets, etc., and acquired leading brands such as Arrow, Lista, and BeA.

As of the end of 2023, Giant Star Technology had nearly 2.5 billion yuan in goodwill on its books.

On July 1, Giant Star Technology issued an announcement that in order to integrate the laser measurement business, it plans to increase capital in its controlling subsidiary Huada Kejie by 334 million yuan and acquire 96% of the equity of Olay Laser.

Public data shows that Giant Star Technology started to engage in this business in 2014 and spent 199 million yuan to acquire 65% of Huada Kejie's shares in 2015. Huada Kejie's main products are laser line projectors and laser levelers, which are positioned in the mid-to-high-end market and are basically sold to the European and American markets.

Giant Star Technology stated that this package of related transactions aims to optimize the management structure of the laser measurement business, reduce overall management and operating costs, ensure the further development of the laser measurement business, and is expected to have a positive impact on the company's future financial condition and operating results.

It is worth noting that the actual controllers of Giant Star Technology are Qiu Jianping and Wang Lingling. In addition to Giant Star Technology, the two also hold controlling stakes in two listed companies, Hangcha Group and Xinchai Co., Ltd. The former is one of the largest forklift R&D and manufacturing groups in China and ranks eighth in the world; the latter is a leading domestic non-road diesel engine manufacturer and ranks first in the market share of construction machinery diesel engines in the non-road diesel engine field.