HP Inc. (HPQ - Free Report) recently announced that it is launching a production-graded 3D printing center in China in collaboration with Guangdong (Dali) 3D Printing Collaborative Innovation Platform.
Notably, this is HP’s largest production-grade 3D printing facility in the Asia Pacific. Powered by Guangdong Lanwan Intelligence Technology, this HP Multi Jet Fusion Technology Mass Manufacturing Center is equipped with 10 printing systems to address the surge in demand for production related parts and prototypes, maintaining the quality and speed of production.
The opening of this center seems to be in line with the company’s announcements in June last year regarding strengthening of its 3D Printing technologies in the Asia-Pacific region. Since the manufacturing sector of the region is worth more than $6 trillion, the expansion decision seems prudent.
HP is focusing on enhancing its 3D printing business capabilities. Even though HP has been operating in this space for almost five years now, the company lags behind 3D Systems Corporation (DDD - Free Report) and Stratasys Ltd. (SSYS - Free Report) . These initiatives are expected to aid HP make its mark in the 3D printing industry.
Unlike 3D Systems and Stratasys, which target all kinds of consumers, HP emphasizes only on industrial markets because of their ability to afford a premium range of 3D printing solutions. The company has collaborations with BMW, Nike, Autodesk and Jabil Circuit Inc.(JBL - Free Report) among others, which have contributed to the company’s top line.
Notably, HP’s revenues climbed 13% year over year to $14 billion in the second quarter of fiscal 2018, with the Printing segment contributing $5.2 billion.
3D Printing Prospects
Luo Jun, executive director of China 3D Printing Technology Industry Alliance and president of Guangdong Lanwan Intelligence Technology stated that “the demand for 3D-printed production-grade parts will grow exponentially over the next few years as we shift from analog to digital manufacturing.”
The 3D printing market presents remarkable long-term investment opportunities, as a large number of engineers, designers, architects and entrepreneurs are now turning to 3D solutions for primary designing and product modeling.
Data from a 2017 MarketsandMarkets report revealed that the worldwide 3D printing industry is expected to witness CAGR of 25.76% from 2017 to 2023 and reach $32.78 billion.
We believe that HP with its efforts will be able to grab a good share of the projected growth of the industry.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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