How to view the current Pathfinder (300005. SZ): The fundamentals are good, and the future is positive

As the 2022 Beijing Winter Olympics approach and the prosperity of outdoor products has increased significantly, the relevant leading enterprise pathfinders (300005. SZ) failed to get out of the same direction of the "pace", but instead performed in the downturn in several consecutive trading days, falling by more than 10% during the year.

(Source: Futu)

From the news side, Pathfinder recently disclosed that it had deliberated and passed the "Proposal on Adjusting the Performance Commitment and Signing of the Target Company<补充协议>", agreed to sign a supplementary agreement with Shanghai Xinfeng and Kim Jin Hyuk, and adjusted the performance commitment and compensation method. Subsequently, the Shenzhen Stock Exchange issued a letter of concern to Pathfinder, who needed to explain whether the change in performance commitments harmed the interests of listed companies and small and medium-sized investors.

In fact, it is still quite common for stock price fluctuations caused by inquiries to increase, and from another point of view, normal inquiries eventually trigger a sharp decline in the secondary market, which often creates rebound opportunities and superimposes the high prosperity of outdoor products.

Let's explore it in detail.

Short-term variables do not change the long-term development direction

First, focus on Pathfinder's response to this inquiry.

The subject of this transaction, Beijing Core, involves overseas companies, and is going through the necessary procedures according to the relevant provisions of the national foreign exchange management, based on the equity delivery procedures have not yet been completed, the parties have reached a consensus to adjust the performance commitment according to the actual situation, and can alleviate the contradiction between the disturbance of performance and long-term development because of its less than expected progress, which is conducive to enhancing the business confidence and motivation of the Beijing Core Energy team.

At the same time, the compensation obligor will increase the funds used to undertake the performance commitment compensation business by not less than about 20.8647 million yuan to about 130 million yuan, and increase the performance compensation pool to indirectly realize the dynamic adjustment of the transaction consideration, thereby improving the protection of the interests of the company and all shareholders.

Overall, pathfinder's performance commitment has a certain basis for moving backwards, and there is commercial rationality.

In addition, it is worth noting:

First, the announcement shows that before the formal delivery of the equity of Beijing Xinneng, the registered capital subscribed by the original shareholders of Beijing Xinneng totaled 19.007 million yuan, and after considering this factor, the book value of the equity of beijing Xinneng shareholders increased to about 34.4137 million yuan (combined with the earlier announcement, the net assets of Beijing Xinneng were 15.4067 million yuan), the corresponding appraisal value became about 389 million yuan, the appraisal value increased to about 355 million yuan, and the appraisal appreciation rate dropped to 1030.36%, that is, down to the conventional level in the acquisition of science and technology.

Second, Pathfinder takes this opportunity to cut into the field of Mini/Micro LED display driver chips, and seize the high point of technology to cultivate and develop new businesses. Mini LED has entered a period of rapid development, according to Yole Research data, from 2019 to 2023, the global Mini LED display device compound annual growth rate of up to 90%; Micro LED is used in AR/VR and other fields and as a core component, with the rise of the metaverse ushered in a golden development period. At the same time, pathfinder's new management has rich experience in the chip industry, there is a synergy of resources and experience, and after the successful acquisition, Beijing Core Energy and Pathfinder's own core competitiveness and profitability are expected to be comprehensively improved.

The main business is stable, and the Winter Olympics provide strong impetus

Look back at the traditional main business of the pathfinder - outdoor products.

Pathfinder is known as the first share of outdoor products, the relevant business lines include outdoor brand Pathfinder, Pathfinder children's clothing, Discovery Expedition, Toread.X, ranking first in market sales and market share, and is the largest outdoor products company in China.

As mentioned in the opening paragraph, the 2022 Beijing Winter Olympics will be coming, and the prosperity of outdoor products will be greatly improved, and Pathfinder, as a representative leading enterprise, is undoubtedly expected to benefit from it.

More specifically, the sports industry, as an upstream industry, has a radiation and pull effect, and the efficiency of major sports events is even stronger. In the 2008 Beijing Olympic Games, for example, China's sports shoes and apparel industry reached the "peak" of growth rate that year, and the market size increased by 32% year-on-year.

In the countdown to the 2022 Beijing Winter Olympics, the popularity of domestic skiing has exceeded 3 times that of the same period in 2019, and it has shown a national and universal nature, and the enthusiasm for outdoor ice and snow in southern cities has also risen, and the goal of "driving 300 million people to participate in ice and snow sports" has become a reality.

Moreover, the Beijing Winter Olympics is also a historical opportunity to carry forward the national tide, national and cultural self-confidence, coupled with the impact of foreign clothing brand boycotts, young consumers' favorability and recognition of domestic brands have increased again in the short term, and it is believed that it is expected to further promote the trend of accelerating the flow of consumer market share to domestic leading brands.

At the same time, pathfinder is currently a joint implementer of the "Key Technologies for The Research and Development of High-performance Clothing for Winter Sports and Training Competitions" project of the National Key Research and Development Program of the Ministry of Science and Technology", and has cooperated in the tasks of "Research and Application of Key Technologies for Winter Sports Low Temperature Resistant Security Clothing" and "Research and Preparation and Application of Key Technologies for Winter Sports Trauma Mechanism and Protective Materials and Equipment". What can better reflect the company's research and development strength and leading position is that under the boom of "300 million people participating in ice and snow sports", Pathfinder has led the development of domestic ice and snow sports clothing, and the national standard of GB/T 41176-2021 "Professional SportsWear Ski Wear" drafted by Pathfinder was officially released recently.

That is, Pathfinder has a significant competitive advantage in product, brand and other dimensions. It provides protection for winter sports projects, and further forms a professional and exclusive brand style, that is, to seize the consumer's mental highland and benefit from the process of improving the prosperity of outdoor products.

Another comprehensive and intuitive perspective shows that in 2021, due to multiple factors such as the epidemic and the economic cycle, the peak consumption season has been impacted, and optional consumption such as brand clothing has been particularly affected, thus affecting the operating performance of related enterprises. Pathfinder's performance in the first three quarters of 2021 maintained a double increase in revenue and net profit year-on-year, highlighting its competitive advantage.

epilogue

Throughout the text, while maintaining rapid growth in the main business of outdoor sports, Pathfinder has a long-term strategic vision through the acquisition of Beijing Core energy to cut into the field of Mini/Micro LED chips, and the high-value links in the industrial outlet where the card slot is about to erupt.

In this process, at present, pathfinder has encountered short-term variables, but from a long-term perspective, this direction of development should not be changed, which means that its fundamentals will still be good for a long time, and its core competitiveness and profitability will be comprehensively enhanced.

This article originated from Grand Gateway