Our Goal is to Become the Chain Leader Enterprise in China's Manufacturing Industry - Fortune Interviews Dr. Ma Jun, Founder and CEO of Sinsegye

Becoming China's "Hand of God"

On November 23, 2017, Changsha held a city-wide mobilization and deployment meeting for industrial chain work, proposing that 22 industrial chain promotion offices be set up in all provincial-level and above parks in the city, with 20 municipal leaders serving as "chain chiefs".

This marked the first implementation of the "chain chief system" in Chinese mainland. The chain leader enterprises mentioned by Dr. Ma Jun in the interview are an important part of the "chain chief system". Generally speaking, chain leader enterprises are usually leading enterprises formed spontaneously by the market in the industrial chain, and they take on the responsibility of coordinately promoting the implementation of major plans, policies and engineering projects.

On the day Fortune (Chinese Edition) visited Sinsegye, Dr. Ma Jun had just celebrated the 4th anniversary of Sinsegye with his colleagues.

"In 2020, I observed that China was gradually rising in various fields. However, in several of the largest tracks, such as chips, we were still 'choked by the neck' by the West in terms of technology, which also included the field of industrial automation. Germany has the largest number of hidden champion enterprises - about 1,300, the United States has more than 330, while China has only 67. Moreover, most of the hidden champion enterprises in the world belong to the industrial field. This shows that in the industrial field, our listed companies and companies focusing on the B2B industry are large in number and scale, but not strong enough."

The "hidden champions" mentioned by Dr. Ma Jun come from the book Hidden Champions: The Pioneers of Globalization in the Future published by German scholar Hermann Simon in 2016. Specifically, "hidden" means that they are not well-known to ordinary individual consumers, while "champions" means that they can achieve an absolute dominant position or an overwhelming market share advantage in a certain niche field. For example, Tetra Pak, the Swedish food and beverage packaging giant, produced 173.2 billion packages in 2012 alone. Although most consumers are very unfamiliar with this name, most of the carton-packaged beverages on modern people's dining tables, such as the carton-packaged milk sold by dairy companies like Mengniu, almost all come from Tetra Pak.

"Above the hidden champions are the giants that can control the industrial market. These giants can not only occupy the advantageous position in the upper reaches of the industrial chain like the hidden champions, but also have a certain reputation among ordinary consumers, such as Siemens of Germany or Mitsubishi Heavy Industries of Japan. In the industry, Siemens is known as the 'Left Hand of God' and Mitsubishi as the 'Right Hand of God'. We also hope to enter the highest-end field in the industry like Siemens and become China's 'Hand of God'," Dr. Ma Jun expressed Sinsegye's future development goal to Fortune (Chinese Edition).

Being down-to-earth is as important as looking up at the stars. Sinsegye, which was just founded not long ago, also deeply understands this truth. Before growing into China's Siemens, it chose a very realistic goal - to become a hidden champion in the field of industrial automation, following the example of Beckhoff from Germany. This industrial automation company from Verl, Germany, has grown into an undisputed leading player in this field in less than 50 years.

"I am very good at building teams" and "the first most important thing for entrepreneurship is the track, and the second is the team," Dr. Ma Jun said in the interview with Fortune (Chinese Edition). Graduated from the Institute of Computing Technology of the Chinese Academy of Sciences and Tsinghua University, Dr. Ma Jun did not seem like a traditional technical entrepreneur in the interview; he himself emphasized team building very much.

Under the leadership of Dr. Ma Jun, Sinsegye has built a professional team full of passion and motivation, which has helped Sinsegye quickly build a rich product matrix.

"These are the two major parts of Sinsegye's product matrix - Automation and icomputer. The software part includes the operating system and integrated development environment, in which we have implemented 300 to 400 functional modules; the icomputer corresponds to various PLCs, PACs, IPC industrial control computers in the traditional industrial automation field. After softwareizing and intelligentizing them, we call them icomputers," when the questions from Fortune (Chinese Edition) began to involve technical details, Dr. Ma Jun seemed to open up, "These two parts are the brain of the entire industrial automation, and they are actually the core that makes all robot assembly lines operate."

On June 24, 2024, Xi Jinping pointed out in his speech at the National Science and Technology Conference, the National Science and Technology Awards Conference, and the Joint Conference of the Members of the Chinese Academy of Sciences and the Chinese Academy of Engineering that we should focus on the key areas and weak links in the construction of a modern industrial system, increase investment in technological research and development in response to the bottlenecks and constraints such as integrated circuits, industrial mother machines, basic software, advanced materials, scientific research instruments, and core germplasm resources, so as to provide scientific and technological support for ensuring the independent, safe and controllable of important industrial and supply chains.

"The country often emphasizes that industrial software is very important and we should avoid being 'choked by the neck' in related fields. Sinsegye has provided China with two key general industrial software products. The first is the industrial operating system, and the second is the integrated programming environment," Dr. Ma Jun said with a hint of pride in his words. "In the past, China did not have influential industrial operating systems; they were all based on the Linux ecosystem or the Windows ecosystem. The programming environments were almost all foreign ones, with markets dominated by companies such as CODESYS, Beckhoff, Siemens, Mitsubishi, and Omron. These were once the key areas where we were seriously 'choked by the neck', which fully proves the core position of Automation in the field of industrial automation. However, Sinsegye can do this well."

Where there is a brain, there must be limbs. Dr. Ma Jun told Fortune (Chinese Edition) that Sinsegye, which started with Automation, has now expanded its business scope and stepped into the entire industrial automation process. "Generally speaking, we divide the limbs of industrial automation into three parts - IO (input and output devices), Motion (servo drives and motors), and sensors. These three parts constitute our standardized products, which are at the top of the entire B2B business chain."

In just four years, Sinsegye has formed an industrial automation product matrix with automation systems and icomputers as the core, including input and output devices, servo motor systems, and sensors. In the interview, Dr. Ma Jun mentioned that Sinsegye has great respect for the industry's predecessors, whether it is Beckhoff or Siemens, and they are all objects that Sinsegye learns from, catches up with, and tries to surpass.

"We have our own advantages and disadvantages compared with the industry champions, but what is certain is that Sinsegye has reached the same level as these predecessors," Dr. Ma Jun stated.

Building a Product-Driven Long-Termist Company

When we look back at the history of human computer technology, Xerox PARC (Palo Alto Research Center) is definitely a name that cannot be bypassed. This Fortune Global 500 company from the United States is also a "hidden champion". As the world's largest manufacturer of digital and information technology products, Xerox's laboratory has invented a series of technologies that have changed the course of human society, such as copiers, laser printers, Ethernet, and this also includes GUI (Graphical User Interface).

In the summer of 1979, Steve Jobs, the founder of Apple, visited Xerox PARC for the first time. It was there that he saw GUI for the first time. Shocked beyond words, Jobs "introduced" this technology from Xerox and launched the first-generation Mac computer. "Xerox is sitting on a gold mine but doesn't know it," Jobs said.

In the nearly 100-year history of Fortune, we have witnessed countless great enterprises that have incubated leading technologies enough to change human history. However, not all technology startups can transform technology into a key to unlock the gold mine of wealth.

"I think the strongest characteristics of Sinsegye are that it is a product-driven and culture-driven company. I also always say that a great company must be a company with products of extremely high quality, such as Apple, Microsoft, and DJI Drones. These companies have created top-tier products that can dominate global niche markets," when Fortune (Chinese Edition) asked Dr. Ma Jun how to balance the healthy tension between technology and the market within the company, Dr. Ma Jun unhesitatingly explained his vision to us: "We want to make the best products."

To make the best products and to make the greatest products - the goals of Dr. Ma Jun and Sinsegye are by no means small. In the face of lofty ideals, ambition alone is not enough; the solid daily investment behind it is the confidence of Dr. Ma Jun and Sinsegye.

"Our company grows at a rate of three times every year, and we can fulfill our commitments at every key time node. In terms of growth rate, Sinsegye's growth rate when entering the Chinese market is even faster than that of Siemens and Beckhoff," Dr. Ma Jun told Fortune (Chinese Edition): "We have become the number one in China's primary market within four years."

With such a growth rate, the capital market's recognition of Sinsegye has been deepening day by day. Looking through Sinsegye's equity structure, there are many well-known institutional names. "The quality and quantity of our shareholders are the best in the industrial automation industry in recent years. We have many national teams, mother funds, and top-tier VCs," Dr. Ma Jun said: "But we are not in a hurry."

In Dr. Ma Jun's view, Sinsegye's "not being in a hurry" stems from its German corporate background: "We have a large number of employees with German corporate background, and in terms of proportion, it should be the largest in China's automation circle. The German market is not as hot as the Chinese market, nor does it like to chase hot trends. Instead, German enterprises calm down and polish their products with a long-term perspective, rather than being in a state of impetuosity all the time."

Dr. Ma Jun's long-termism is not just empty talk. Through their efforts, Sinsegye has not only achieved steady growth, but also quietly completed its overseas expansion and globalization. In Germany, the base camp of the global automation industry, Sinsegye has established Sinsegye Germany, and has also made achievements in markets such as Russia.

"We have completed the 1.0 stage," Dr. Ma Jun said. "The 2.0 stage of Sinsegye will be before the IPO. We will let the entire industry see that Sinsegye has the best revenue, net profit margin, and PE growth potential. As for the future 3.0 stage, as I said before, Sinsegye will become a chain leader enterprise in China's manufacturing industry."

"We firmly believe in computerized automation," Dr. Ma Jun concluded the interview with a firm tone.

Article source: FORTUNE magazine, reprint authorized with a whitelist.