Fiber laser companies benefit from extensive investments in the production of electric vehicles and solar cells.
The stock price of fiber laser giant IPG Photonics rose sharply after the company reported year-on-year growth in sales and profits.
Revenue in the third quarter of this year was US$379 million, an increase of 19% over the same period in 2020, and pre-tax income was US$102 million, more than double the same period last year.
CEO Eugene Scherbakov (Eugene Scherbakov) attributed this performance to increased demand for some key applications, mainly outside of China, where the laser cutting market has experienced a downturn.
"The increase in demand for welding applications in most regions, and the increase in revenue from cutting in North America and Europe, as well as emerging products and applications (such as foil cutting, cleaning, 3D printing, drilling, medical and solar cell applications), have driven the industry’s strong revenue In the quarter, despite China’s cuts in app demand, the demand was significantly weaker,” he told investors.
Electric vehicles drive laser sales. These geographic trends have driven sales in Europe by 50%, North America by 55%, and China’s figure has fallen by 7%—although China’s welding and additive manufacturing applications have performed well.
The current main market driver is electric vehicle (EV) production, where IPG lasers are widely used in battery welding and foil cutting processes, as well as in motor assembly and body-in-white manufacturing.
Scherbakov said that bookings in the most recent quarter remained strong and IPG benefited from macroeconomic trends such as investment in clean energy and automation and electric vehicles.
"We are still excited about the growth prospects of IPG in EV applications, medical, handheld lasers, ultrafast lasers, and many other opportunities, and we believe these will drive our future revenue growth," the CEO said.
However, China (the largest single market in the history of IPG) continues to be weak in reducing applications, prompting Scherbakov and his executive team to issue a cautious outlook, predicting that sales in the last quarter of 2021 will fall to between US$330 million and US$360 million. between.
If the forecast proves to be accurate, then IPG’s annual sales will reach approximately $1.45 billion, a figure that will be close to historical records, an increase of approximately 20% over the total sales in 2020.
Gapontsev pays tribute to the latest investor conference call a week after IPG announced the death of its founder and long-term CEO Valentin Gapontsev. Scherbakov, who was appointed as CEO during Gapontsev’s transition to the company’s chairman earlier this year, paid tribute to his predecessor, calling him the "father of the fiber laser industry."
"This is a huge loss for our company and the wider photonics community, who have benefited a lot from his technological innovation and strategic vision," he added.
"Thanks to his vision and unremitting efforts, fiber lasers have become cost-effective, reliable and effective tools, and have been widely used in global industrial production, achieving automation, efficiency and the development of new products.
"He is recognized as the'father of the fiber laser industry' and a great entrepreneur. Following in his footsteps, we will continue to focus on innovation and invest in manufacturing and R&D capabilities internally to manufacture the highest quality components and the most reliable The product."
Efficiency Drive As pointed out by Scherbakov, the extremely high efficiency of fiber lasers is one of the key attributes of this technology. IPG's technology has played a very important role in major macro trends such as electric vehicles, renewable energy, energy efficiency, industrial automation, and miniaturization. Good effect.
The CEO added that as automakers address the demand for electric vehicle batteries and other new technologies to meet aggressive global carbon emission standards, the investment cycle for electric vehicles is expected to continue in the next 3-5 years.
Another key growth area may be IPG's "LightWeld" product, the latest version of which was released at the Fabtech event held in Chicago last week.
"We have signed agreements with national distributors who operate hundreds of welding retail stores in the United States," Scherbakov reported. "We currently expect to sell tens of thousands of LightWeld systems in the next 3-5 years."
• According to the latest financial update, the share price of IPG Photonics has risen by approximately 8%-partially reversing the downward trend of the past three months. In early trading on the Nasdaq on November 2, the stock price was US$173, which is equivalent to the region's market value of US$10 billion.