In this Research Note, we examine Technovator, a Chinese building automation firm, based on their 2023 annual report and financial results.

Founded in Singapore in 2005, Technovator is listed on the Main Board of the Hong Kong Stock Exchange (Stock Code:1206). The group is structured into three business units: Smart Transportation Business (STB), Smart Building and complex Business (SBB), and Smart Energy Business (SEB).

Technovator Group 2023 Financial Highlights

The group recorded a 2023 revenue of approximately RMB 1,838.0 million ($253.5 million), representing a year-on-year increase of 5.7%.

Owing to the relatively slow recovery of the target markets, intensified competition in the industry, and an adjustment in market strategy to secure market share, the gross profit margin declined significantly during the period, which in turn had a significant adverse impact on the net profit.

The provision for impairment of certain items also increased, resulting in a loss of approximately RMB 99.9 million ($13.8 million) for the year.

Technovator Smart Buildings Business

The Smart Building business designs, manufactures, and distributes integrated building automation and energy management systems, including hardware, software & total solutions to system integrators and distributors. The business unit is the largest contributor to the group, accounting for 44.8% of total revenues.

Revenue from the Smart Building and Complex Business decreased by -7.8% to RMB 822.5 million ($113.4 million) in 2023, affected by the adverse external environment and weaker-than-expected investments in the target markets in China.

Projects

Dongsheng Science and Technology Park of Zhongguancun

Phase II of Dongsheng Science and Technology Park of Zhongguancun (中關村東升科技園二期) is positioned as a high-tech, green, dynamic and low-carbon park which was planned and designed as a three-star green building.

As part of the Technovator project, a smart low-carbon management platform was constructed, which has been effectively working with other basic energy-saving systems such as photovoltaics, sewage source heat pump, energy consumption monitoring, equipment management and intelligent power transformation and distribution in the park to lower carbon emission levels, making it one of the most advanced low-carbon buildings and parks in Beijing.

Various technologies such as IoT, big data, artificial intelligence, and digital twin have been used to study the application of AIOT technology in a low-carbon park so as to facilitate the construction of smart parks and serve as a model for other projects.

Healthcare Sector

In 2023, Technovator implemented benchmark projects for the smart healthcare sector, which have laid a foundation for the operation of smart hospitals at a later stage.

During the period, the Group won the bid for the project of Science City branch of the Fourth People’s Hospital of Chongqing (重慶市第四人民醫院科學城院區). The self-developed digital base of the Kunlun platform aims to standardize data management, optimize the medical processes and improve the efficiency of decision-making.

Conference and Exhibition Sector

The Group seized the market opportunities emerging from the strong recovery of the exhibition industry. During the period, the Group won the bid for the smart exhibition hall of Xinxing Cathay International Group (新興際華集團智慧展廳) with responsibility for the installation of the multimedia system and the electrical and mechanical installation.

This was the first time the Group demonstrated its capacity in fully specialized contracted works and turnkey delivery in the exhibition sector, leading to the expansion of their presence in smart exhibition facilities.

Technovator positions itself as a smart energy saving services provider and has completed some significant deployments in China.  

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.