Unique 3D Printing Technology Helps BLT’s to Rocket
3D printing has advantages in customized and complex areas of design and development – it has been largely applied in high-end fields like aerospace, industrial equipment auto and consumer electronics.
► The decrease of equipment on consignment and the increase of self-developed equipment is helping to promote the 3D printing firm’s upgrading of revenue structure, raising its profitability.
► Both the global and domestic market size of 3D printing is showing a rising trend, even if the global one was three times higher than the domestic one during the last years.
3D printing has been gaining increasing attention these days. It has more advantages than traditional printing. Specifically, 3D printing has lower costs and shorter times involved in its production processes. It can make unique shapes that traditional manufacturing cannot achieve. Looking to its origins, 3D printing technology can actually be said to have originated in the US in 1940, as industry adopted new ways of overlaying materials.
As a tier-one 3D printing firm in China, BLT’s development benefitted from its nine-year R&D in the 3D-printing process, materials and equipment. To be precise, its founding team comes from the Northwestern Polytechnical University, one of the earliest scientific research teams in China’s 3D printing timeline. After setting up, the firm undertook massive research projects in collaboration with the Ministry of Industry and Information in China.
When it comes to BLT’s R&D ability, the Selective Laser Melting (SLM) technology is significant – this is the primary technology method of the 3D printing firm. BLT started involving SLM from 2012, benchmarking Germany’s EOS, Germany’s SLM solution and the US’s GE. SLM chose lasers as the power source; this is also a main technological means for additive manufacturing. SLM is mainly used in the aerospace field. Its R&D expense ratio has shown a rising trend since 2016, achieving 13% in 2019, for about CNY 42.3 million.
The 3D printing firm also benefits from its upgrading of revenue structure. The firm has a comparatively complete industrial chain of 3D printing, from 3D printing materials, 3D printing equipment to 3D printing products. 54% and 40% of its operating incomes come from the 3D printing products and equipment respectively in 2019. The printing materials are likely to become its business extension direction in the future. As its revenues from the equipment on consignment decreased by 15% in 2019, while its self-developed equipment had a higher gross margin level of about 49%, BLT’s profitability increased significantly when experiencing this change. Its profit margin in sales increased from 44% to 50% during these two years.
Except for the beneficial factors, some external factors, such as the increase in demand for aerospace and 3D printing’s market size, also contribute to its development. The aerospace field is the fastest-growing area within 3D printing and the main area in BLT’s downstream market. According to WorldAirForce data for 2020, China still has a considerable distance to cover when compared with the US in the amount and quality of military planes, indicating more room for China’s aerospace industry to develop. Moreover, the aerospace sector has occupied 95% of BLT’s operating incomes in 2019, and its top five customers all come from the aerospace industry. On the contrary, the 3D printing firm’s over-dependence on the large customers may cause the fluctuation of its profits in the future. To avoid relying too much on a single customer, the firm should explore finding more customers in the future.
The global market size of 3D printing has been showing an increasing trend these years, and there is also an expectation of continuous rise. Specifically, the global market size expanded from 2012’s CNY 2.28 billion to 2018’s CNY 10.77 billion, with CAGR equaled 29.53%. According to Wohlers Associates’ expectation, its output will reach CNY 35.6 billion in 2024. While, for the Chinese market, although it is quite lower than the US’s market, it also presents a rising trend. From 2012’s CNY 0.16 billion to 2018’s 2.25 billion, and Wohlers Associates also expected it to get CNY 11 billion in 2023.
In conclusion, BLT’s R&D ability will further improve its 3D printing technology, further expanding 3D printing customized products’ capacity and upgrading its revenue structure. In the long term, the aerospace industry’s rising demand and the 3D printing market’s increasing market size also leave more room for the 3D printing firms to grow.