Chairman Lu Guqing said at a press conference in France today that with the gradual completion of the military product line and the injection of orders for complete drones, the military business will become the main growth driver in 2027. (Provided by Rongcheng Electric)
[Reporter Fang Weijie/Reported from Taipei] Industrial computer factory Rongcheng Electronics (3416) is actively expanding its defense industry and artificial intelligence (AI) unmanned vehicle layout. Chairman Lu Guqing said at a press conference today that as the military product line is gradually completed, coupled with the addition of unmanned vehicles Based on orders for complete human-machine machines, the military business will become the main growth driver in 2027. It is expected that related revenue will grow by at least 30% to 40%, and may even challenge more than 50%, and it aims to maintain a growth rate of at least 20% in the next three years.
Lv Guqing pointed out that Rongcheng Electric has received orders for AI computing unmanned vehicles using NVIDIA chips in the third quarter. Due to the high unit price of the products, it is expected to contribute at least 5% to the overall revenue in 2027. If a large number of subsequent shipments are made, the contribution proportion is expected to further increase. From the perspective of the overall unmanned vehicle business, the future revenue share may exceed 15% to 20%, becoming an important pillar for the company to expand the mission-oriented edge AI market.
In terms of drone production capacity layout, Lu Guqing revealed that the current planned monthly production capacity is about 10,000 to 15,000 units, and will gradually expand to at least 30,000 units in the future. In addition to providing complete drones, Rongcheng Electric also covers ground control stations (GCS), internal structural parts and other products. It has the design and processing capabilities of carbon fiber structural parts, and continues to expand the layout of the unmanned vehicle supply chain.
Regarding the international military market, Lu Guqing said that Europe, the United States and some emerging countries have low willingness to purchase safety-sensitive products such as drones made in China, but instead create business opportunities for Rongcheng Electric. The company hopes that within the next six months, the entire drone will comply with the relevant specifications of the U.S. Defense Authorization Act (NDAA) and obtain Blue UAS certification to increase opportunities to enter the U.S. and European markets.
Lu Guqing emphasized that the defense industry has high entry barriers. Ship computers and other military equipment must comply with multiple international certifications. Mass production of general consumer electronics products cannot be entered. Rongcheng Electronics has established a foundation in the field of maritime computers and will continue to expand land, sea, air and public safety-related applications in the future.
Looking forward to the market outlook, Lu Guqing pointed out that the company's order-to-shipment ratio currently exceeds 1.1, order visibility is about 6 to 8 months, and orders from some large customers can last up to 9 to 10 months. In addition to the military business, semiconductor equipment will also become a new growth driver. It is expected that related business will grow several times next year. The Korean, Japanese and European markets are also worth looking forward to.
As for short-term operations, Lu Guqing said that the third quarter will be the peak of shipments this year, and fourth-quarter revenue is expected to return to close to the second quarter level, but will still be better than the same period last year. With the increase in shipments of military and automotive products, gross profit margin is expected to increase slightly, and full-year revenue is expected to increase by about 30% year-on-year.
