Photos by Sim Kih and El Lee.
WORLD PRECISION MACHINERY (WPM), which is listed on the Singapore Exchange, is a leading PRC producer of world-class metal stamping machines that mass-produce parts for a wide range of industries.
I was among a group of analysts, writers, and investors who visited its plant in Danyang, Jiangsu province recenlty. On this page are photos of the A-Z of its manufacturing process.
It's the first photo essay of its operations published by anyone in Singapore -- and complements the coverage NextInsight has given in the past to its business model, financial performance and prospects.
It was an eye-opener for us Singaporeans as we walked thorugh the entire range of World Precision Machinery's workshops -- there are 10, housing equipment for smelting, casting, welding, furnaces, blasting, cutting and grinding metal, etc..
The factory is sited on 1,000 hectares of land, an area so extensive it appeared we could walk on for hours.
The workshops operate 24 hours a day on three shifts of eight hours each for an average of 310 days per year. During winter, they operate two shifts of eight hours per day.
The initial stage of manufacturing stamping machines is to smelt its main input - iron - into molten iron, followed by casting the molten iron in moulds to produce the main components for the stamping machines.
These casted components are then cooled to the required temperature, and undergo shot blasting before base paint is applied to them.
Components that are casted before being assembled into metal stamping machines include the frame of the stamping machine, slide, connecting rod, operating table, machine base, flywheel and gear wheel.
WPM Machines in Action
We visited an automotive components manufacturer (Kaida Motor) that supplies to Shanghai General Motors and Shanghai FAW. We also visited the manufacturing facility of World Agriculture Machinery Company, one of the six businesses in the World Group that uses machining tools produced by WPM.
Capacity Expansion
WPM is one of China’s top three machining tool equipment manufacturers and we saw the most powerful boring and milling machinery used by this industry - imported from Italy’s PAMA.
WPM’s Danyang facility currently has 4 units of High Precision Machining Equipment from PAMA Group of Italy in operation.
In addition to its 10 workshops, World Precision Machinery is constructing two new workshops. Four new units of PAMA high tonnage machining equipment from Italy are expected to be installed in 2012 and early 2013, doubling its capacity from such high tonnage machines.
Danyang is located in Jiangsu, which is China's traditional manufacturing hub. WPM is also building a factory in Shenyang to service the Bohai region, which is rapidly being developed by the government into a hub for heavy industries such as the automotive sector.
A journalist from The Edge weekly was among the visitors, and will be writing an article on the visit. Three analysts have put out reports. Some of their comments:
"WPM has a consistent track record of generating free cash flows and paying dividends. Stock is trading at an undemanding 5x forward P/E and 6% dividend yield." - Goh Han Peng, OSK-DMG
"There's high demand for locally made autoparts, and this sector generates better margins for WPM. There is room for margins to improve. The company is expanding its capacity to capture growth from the Bohai Rim area. Order momentum is also picking up after the Chinese New Year lull." - Eric Ong, Maybank Kim Eng
"Compared to other listed regional peers, WPM seems undervalued. It is trading at a P/E of 5.9x and its dividend yield is ~4.3% (based on recent stock price of 53 cents)." - Sarah Ong, OCBC Investment Research
Related story: WORLD PRECISION: Stock Up As Much As 6.6% On 2 Visit Reports
