Voxeljet AGVJET has inked a definitive deal with Suzhou Meimai Fast Manufacturing Technology Co., Ltd. to expand its presence on Chinese soil. The move is at par with Voxeljet's ongoing growth strategy of expanding its footprint across emerging economies.
Particularly, Voxeljet will form a joint venture with an equity joint venture with Suzhou Meimai, which is expected to be named "Voxeljet China Ltd" upon attainment of local authorities' approval. Having the supermajority interest in the joint venture, Voxeljet will control the operations of Voxeljet China that will be headquartered in Suzhou city.
Voxeljet China will begin to offer on-demand part services in the second quarter of next year via a temporary facility. Both the joint venture parties are engaged in planning construction of a facility similar in size to the existing facilities of Voxeljet in U.S. and Germany.
This new joint venture boosts Voxeljet's long standing relationship with Suzhou Meimai. As a matter of fact, Suzhou Meimai's indirect shareholder's MK Technology GmbH and Metang Novatech Shanghai Co., Ltd. have an old connection with Voxeljet's operations.
We believe this agreement will aid Voxeljet in catering to the rising industrial 3D printing applications in China. Presently, the 3D printing market in China is at a nascent stage, with promising growth prospects. As per a report by research firm, Research and Markets, China's 3D printing market had a total size worth RMB 4.65 billion and is projected to grow at an average rate of around 40% in the coming years, exceeding RMB20 billion by 2018. Hence, we believe the deal is a strategic fit for Voxeljet.
The company currently carries a Zacks Rank #4 (Sell) owing to weak third-quarter earnings and subsequent low analyst expectations. Better-ranked stocks in the same space include Alps Electric Co. Ltd. APELY , Harman International Industries, Incorporated HAR and Sanmina Corporation SANM . All stocks carry a Zacks Rank #2 (Buy).
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