As the basic tool of equipment manufacturing, power tools are one of the important factors that directly determine the performance, level, quality and reliability of major equipment, and are the key to realize the transformation from large to strong equipment manufacturing industry in China. As "made in China 2025" as the propulsion of implementing the strategy of manufacturing power of action in our country, industrial base to further consolidate and improve the quality and efficiency of industrial development, promotes our country realize the transformation from manufacturing power to manufacturing powerhouse, automobile, machinery, home appliances and aerospace and other fields of manufacturing industry in dividend policy will maintain relatively fast growth, driven by The demand for industrial and professional power tools and their matching motors will increase accordingly. At the same time, to build China into a manufacturing power, China is vigorously promoting the development of intelligent and green manufacturing, developing green manufacturing technologies and products, and promoting the innovation of manufacturing production mode and industrial form.

1. Policy analysis

In recent years, the state has issued relevant policies to promote the development of the power tool industry, including the Implementation Plan for promoting the updating and upgrading of key consumer goods, the Circular on printing and distributing the 13th Five-Year National Science and Technology New Plan, the Industrial Green Development Plan (2016-2020) and so on.

In June 2019, the National Development and Reform Commission, the Ministry of Commerce and other departments jointly issued the Implementation Plan for Promoting the Upgrade and Smooth Resource Recycling of Key Consumer Goods, proposing to support the research and development of energy-saving and intelligent home appliances, and encouraging the development of home appliance combination products and integrated products based on the Internet of Things and artificial intelligence technology.

In July, 2016, promulgated by the State Council "about print and distribute" much starker choices-and graver consequences-in "notice of national science and technology, the new planning, put forward the development of green design technology, basic processing technology, mechanical and electrical product development technology, remanufacturing and recycling technology, build system based on product whole life cycle of green manufacturing technology, the popularization and application of green manufacturing technology and equipment and industrial demonstration. In June 2016, the Ministry of Industry and Information Technology issued the Industrial Green Development Plan (2016-2020), proposing to support the research and development of core technologies in the green manufacturing industry. To meet the technological needs of green manufacturing industries such as energy conservation and environmental protection, new energy equipment and new energy vehicles, we will strengthen research and development of core and key technologies, and establish a technological system to support the development of green manufacturing. Electric vehicles focus on promoting power battery, motor, electronic control and other technology research and development.

2. Market analysis

(1) Classification of power tools

Compared with manual tools, electric tools greatly reduce labor intensity, improve work efficiency, widely used in the construction of roads, housing decoration, woodworking, metal processing, shipbuilding, aerospace, automotive, horticulture and other national economic fields, and has entered the family use. The variety of power tools, power tools in the world today has developed to more than 500 varieties. According to the Standardization Administration of China issued the "Power tools model compilation Method (GB/T 9088-2008)", power tools can be divided into metal cutting class, sand grinding class, assembly class, construction road class, forest class, agriculture and animal husbandry, horticulture class, mining and other classes. According to the different accuracy and use of the field, the overall product system of power tools can be roughly divided into industrial level, professional level and general level three levels, as follows:

Figure 1: Classification of power tools

Data source: Shang Putai Consulting

(2) Market supply and demand and industry development trend

At present, China has become the world's main exporter of power tools and power tools production base, the export-oriented characteristics of the industry is very obvious. China produces a large number of electric tools every year, about 80% of the exports to the world's countries or regions. According to the annual report statistics of Electric Tools Branch of China Electrical Equipment Industry Association, in 2017, the number of exports was 25,387,700, and the amount of exports was 742,743,27,700 USD; In 2018, the number of exports was 27,8959,200, with an export value of US $841,6728,100: in 2019, the number of exports was 28,8526,800, with an export value of US $873,28402,400. Based on this estimate, in 2017, 2018 and 2019, the overall market demand for power tools in China is about 317 million, 349 million and 361 million units, with a market size of about 62.576 billion yuan, 69.754 billion yuan and 75.211 billion yuan.

Figure 2: Total exports of hand - held power tools

Data source: Industry statistics annual report, shangPutai consulting collation

3. Analysis of the overall pattern of industry competition

From the overall pattern of industry competition, the market continues to survive the fittest, the industry presents a complete, independent and sufficient competition situation, and the market concentration degree is further improved. The phenomenon of "two-level differentiation" of domestic enterprises is becoming more and more obvious, and the industrial concentration degree is greatly increased. The situation of constant strength or even stronger is further highlighted. Production capacity and sales performance of large enterprises have increased rapidly, a small number of foreign brand enterprises are still strong, and some large enterprises are on the rise. Some of the lack of technical level, lack of independent brands and fixed sales channels of small and medium-sized enterprises will be gradually integrated or quit. According to the 2017 annual statistical report of China Electrical Equipment Industry Association Electric Tools Branch, in 2017, the total number of enterprises with an annual output value of 500 million yuan increased to 18, while the market share of small and micro enterprises is gradually shrinking, the future of survival and development is worrying. This makes in the future market pattern, with product design and research and development ability, with independent brand and marketing channel advantages of the enterprise will be more favorable development opportunities in China's power tools market.

4. Risk analysis

(1) Failure risk of new product development

Power tool manufacturing industry as a whole presents a complete, independent, full industry competition situation, the market continues to survive the fittest, market concentration further improved. In order to further improve the terminal market share, power tool manufacturers put forward higher technical indicators and new product development and manufacturing requirements for upstream suppliers. Before obtaining new product orders from customers, the company generally needs to go through the process of raw material customization, design, test, process adjustment and retest, which requires more personnel, capital and raw materials, and large r&d expenditure. Company research and development ability, research and development conditions and other uncertain factors, there is a new product research and development to make the risk of failure, the risk may appear unable to complete the development of new products in the company, or the new products developed in terms of performance, quality or cost does not have competitive advantage, will affect the company's profitability and competitive position in the industry.

(2) Core technology leakage and brain drain risk

After years of experience accumulation, the company has accumulated a number of core technologies, including brushless frequency motor non-inductive sine drive system, dc motor output shaft end waterproof structure application and so on, some of which are proprietary technologies of the company. The company shall protect it in the form of technical secrets, but it cannot exclude the possibility that the technical personnel may disclose the technology to the outside in violation of relevant regulations or the technology may be embezzled by others. At the same time, the company has trained a number of excellent technical personnel with rich technical experience and strong product research and development ability. In the case of increasingly fierce market competition, the company will face increasingly fierce talent competition, the company has the risk of losing core technical personnel. Such as the loss of core technical personnel or the loss of secrets of a core technology, the company's technical advantages in products will be weakened, affecting the overall competitiveness of the company.

This excerpt is from the "Power tool manufacturing project investment feasibility Study Report" released by Shang Putai