After Foxconn, the new energy vehicle track has ushered in a "fruit chain" giant.
On the evening of February 11, Lixun Precision issued an announcement that its controlling shareholder, Lixun Co., Ltd., and Qingdao Wudaokou New Energy Automobile Industry Fund Enterprise (Limited Partnership) signed the Equity Transfer Framework Agreement, which stipulated that Lixun Limited would purchase 19.88% of the equity of Chery Holdings, 7.87% of chery shares and 6.24% of chery new energy held by Qingdao Wudaokou for 10.054 billion yuan, and after the completion of the transaction, Lixun Limited would not control Chery Holdings, Chery shares and Chery New Energy.
In addition, Luxshare Precision and Chery New Energy intend to jointly form a joint venture company, specializing in the research and development and manufacturing of new energy vehicles. Among them, Lixun Precision intends to subscribe 500 million yuan to hold 30% of the registered capital of the cooperative subsidiary, and Chery New Energy to subscribe to 1.167 billion yuan and hold 70% of the equity of the registered capital.
But the industry has mixed views on this huge investment. Some views believe that this move is conducive to Luxshare Precision to develop new business segments and lay the foundation for the follow-up Apple auto foundry business, but there are also views that the current new energy vehicle track is crowded, and the future reshuffle is inevitable, especially in the entry time node, Luxun Precision has walked behind its peers.
On the 11th, Luxshare Precision closed down 6.09%, closing price of 41.05 yuan / share, the total market value of 290.3 billion yuan, January 25, 2022 to date, Luxun Precision stock price has fallen by 16.72%.
Mobile phone supply chain "follow the run" car track
Luxshare Precision's ambitions gradually spread from the oem business of consumer electronics to the automotive business.
According to the agreement announced in the announcement, Lixun Precision and Chery New Energy intend to jointly establish a joint venture company, specializing in the research and development and manufacturing of new energy vehicles, and providing cutting-edge R&D design, mass production platform and sea exit for Lixun Precision's core auto parts business.
Among them, Lixun Precision intends to subscribe 500 million yuan to hold 30% of the registered capital of the cooperative subsidiary, and Chery New Energy to subscribe to 1.167 billion yuan and hold 70% of the equity of the registered capital. The cooperation between the two parties is exclusive, that is, Chery Group cannot cooperate with other automotive foundry enterprises in the OEM business, but can independently oem business or cooperate with auto brand enterprises in OEM business.
Lixun Precision said that the company and Chery Holdings and its affiliates jointly signed a strategic cooperation framework agreement, aiming to strengthen the strategic layout of the company's automotive business in an all-round way. With the support of the vehicle joint venture platform as a cutting-edge R&D and design, mass production platform and haikou, the company will dynamically enter the bureau and rapidly improve the company's core component comprehensive capabilities as a Tier1 manufacturer, and achieve the medium- and long-term goal of becoming a leading Tier1 manufacturer.
From the perspective of the electronic consumer track where Luxshare Precision is located, it has become a trend to cut into the automotive industry chain.
Industry insiders told reporters that the automobile is regarded as the next generation of mobile phone-level industrial products, and the automobile industry is developing in the two directions of Internetization and intelligence, coupled with the intersection of the corresponding mobile computing scenarios, so the most experienced and accumulated is the mobile phone supply chain, and it is expected to get rid of the over-long-term "low profit" dilemma with the help of cross-border.
Take Foxconn, the world's largest electronics foundry, which has been active in the automotive sector in the past few years. From Byton and FF to Fisk to crazy investment in car factories, automotive strategies have gradually surfaced.
Foxconn Chairman Liu Yangweicheng pointed out in a previous report to shareholders that Foxconn wants to reborn the original "labor-intensive" physique and will focus on investing in the three major industries of "electric vehicles, digital health and robots" in the future.
Foxconn expects the electric vehicle market to explode in 2024, a year ahead of internal expectations. In Foxconn's understanding, a smart car can be seen as a smartphone plus four wheels. The automotive industry is transforming to intelligence and electrification, and the car is expected to become the next popular smart terminal after the smartphone.
In addition, the low gross profit margin of mobile phone products also affects the willingness of the upstream supply chain to be put into production, while the profit margin of the new energy track gives the electronic supply chain enterprises a new direction.
In the third quarter financial report released in October last year, The net profit of Luxshare Precision in the first three quarters was 4.69 billion yuan, an increase of 0.21% year-on-year, but the net profit in the third quarter fell by 25.28% year-on-year. In addition to Lixun Precision, OFILM, Lens Technology, goertek shares are also due to poor performance and stock prices are not strong. "Making money and not making money" is almost a true portrayal of Chinese mainland Apple industry chain manufacturers.
Some mobile phone supply chain people told reporters that after experiencing a "low rebound" at the beginning of last year, the heat of the mobile phone market continued to decline. "At present, the wait-and-see mood of the consumer electronics supply chain is still heavy, and the orders from PCBs to passive components and optical lenses in the upstream supply chain tend to be conservative, and the market is in a very sluggish stage." The person said.
Crowded tracks, money-burning games
The new energy vehicle track is in the ascending channel.
On January 12, 2022, the China Association of Automobile Manufacturers released statistics showing that automobile production and sales in 2021 will increase year-on-year, ending the situation of three consecutive years of decline since 2018. Among them, the annual sales of new energy vehicles exceeded 3.5 million units, and the market share increased to 13.4%.
But judging from the number of players in the current market, not only China, but also the world's technology giants and traditional car companies and even traditional companies are increasing their investment in this field. Taking China as an example, Xiaopeng Automobile, Ideal Automobile, Nezha Automobile, Zero-run Automobile, WM Automobile, Extreme Krypton Automobile, Lantu Automobile, Jihu Automobile and even Celis are constantly updating models to seize this market.
"If it was at the beginning of last year, the investment of Luxshare Precision was definitely good news, but not necessarily now." In the industry's view, the timing of Luxun's entry is late, and more importantly, the investment threshold of the automotive industry is constantly increasing, and there is no end to "burning money".
Judging from the data of the first three quarters of last year, the quarterly losses of Weilai and Xiaopeng Automobile are gradually expanding, of which the former has a total loss of 1.872 billion yuan, the latter has lost 3.576 billion yuan, and the loss of ideal cars has reached more than 600 million. From the perspective of R&D investment, the new energy vehicle track is regarded as a "bottomless pit".
In an interview late last year, Li Bin, the founder of Weilai Automobile, raised the car-making threshold for auto start-ups from 20 billion in 2016 to 40 billion. "40 billion yuan is not an accurate number, it is an intuitive judgment." We are still losing money today because we have to invest in the future, otherwise even if we make a profit quickly, it is likely to fall off a cliff in two years. Li Bin said.
From the Jidu automobile plan to invest 50 billion yuan in 5 years, Xiaomi plans to invest 10 billion US dollars in 10 years, it can be seen that the start of making cars has become the consensus of the industry.
For electronic supply chain companies with low profits, continuous capital investment is a major challenge to cut into the automotive track.
According to public information, in 2020, Luxshare Precision achieved a total operating income of 91.870 billion yuan, an increase of 46.95% year-on-year, and a net profit attributable to the shareholders of listed companies of 7.233 billion yuan, an increase of 53.44% year-on-year. As of the end of the third quarter of last year, Luxshare Precision had a total of 63.05 billion yuan of current assets, of which 15.68 billion yuan was monetary funds. In the first three quarters, Luxshare Precision's net profit was 4.69 billion yuan.
Compared with the investment of technology companies and traditional car companies with tens of billions of yuan, how to ensure follow-up continuous investment and the balance between existing business and new business development is also the biggest issue facing Luxshare Precision at present.