ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Business

Market Scramble: Chinese demand lifting factory robot stocks

Mainland manufacturers hungry for new labor-saving equipment

Robots are making robots at Yaskawa Electric's headquarters in Kitakyushu, Japan.

TOKYO -- Wary investors looking for equities immune from the drama unfolding in Washington could look no further than labor-saving tech companies thriving off Chinese demand.

The Nikkei Stock Average on Friday managed to eke out the first gain in three sessions, closing 36.90 points higher at 19,590.76. But even as the ticker struggled to make headway during morning trading, SMC rode high all day, eventually finishing about 3% higher at 33,060.

As a global manufacturer of pneumatic devices, SMC stands front and center in the factory automation business. The company foresees a record operating profit for the fiscal year ending March 2018. Demand from China is a major factor behind the bullish outlook.

SMC shares took a hit in December after an investment research firm issued a damaging report on the company, but the stock has since jumped more than 20%.

Industrial robot makers Yaskawa Electric and Fanuc also have advanced more than 10% since the end of last year, multiplying the Nikkei average's 2% gain. "The Chinese manufacturing industry can't even talk about automation or labor-saving without technology from Japanese companies," said Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute.

In 2015, Beijing rolled out the "Made in China 2025" initiative for modernizing the domestic manufacturing base. Enterprises are encouraged to adopt information technology and automation solutions. In short, this is China's answer to Industry 4.0 -- the so-called fourth industrial revolution -- taking place globally.

Responding to the call from the top, companies are quickly installing robots and other cutting-edge equipment, transforming production floors into models of modernity.

Against that backdrop, Japan's robot exports to China have been climbing. The first three months of the year saw 45.7 billion yen ($410 million) worth of shipments to the country, data from the Japan Robot Association shows.

The level was last reached in the third quarter of 2010, after the one-party state committed to a 4 trillion yuan ($580 billion) stimulus package to address the effects of the global financial crisis.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media