China Fund News reporter Li Zhi
300 billion "fruit chain brother" is also going to cross-border transformation?
On February 11, Luxun Precision announced that the company spent tens of billions of yuan to join hands with Chery Group and cut into the new energy vehicle track. For the car rumors, Luxun Precision responded, "Luxun Precision does not build complete vehicles, but cooperates with Chery New Energy to develop the ODM business of building good cars for others, and aims to seize the window of opportunity to fight into the world's leading Tier1." ”
Lixun Precision invested tens of billions of dollars in Chery
Established a joint venture company to jointly build cars
On February 11, Luxshare Precision, Chery Holding Group Co., Ltd., Chery Automobile Co., Ltd., and Chery New Energy signed the Strategic Cooperation Framework Agreement in Wuhu to lay a strategic partnership for both parties.
On the basis of the agreement, 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, providing cutting-edge R&D design, mass production platform and sea outlet for The core parts business of Lixun Precision Automobile, and is committed to achieving the company's medium- and long-term goal of becoming a leading manufacturer of auto parts Tier 1.
At the same time, Lixun Precision's controlling shareholder, Lixun Limited, signed the Equity Transfer Framework Agreement with Qingdao Wudaokou New Energy Automobile Industry Fund Enterprise (Limited Partnership), which stipulates that Lixun Limited will purchase 19.88% of the equity of Chery Holdings, 7.87% of the equity of Chery Shares and 6.24% of the equity of Chery New Energy held by Qingdao Wudaokou for 10.054 billion yuan. After the completion of the transaction, Luxun Limited does not control Chery Holdings, Chery Shares and Chery New Energy.
Before the signing of the Equity Transfer Framework Agreement, Qingdao Wudaokou held 46.77% of the equity of Chery Holdings, making it the largest shareholder of Chery Holdings.
According to the announcement, Luxun Precision pointed out that the two parties will give full play to and utilize the resources and advantages of all parties in the field of new energy vehicles (including but not limited to all new energy vehicles in the system of Party B's group company such as commercial, passenger and logistics) and the supporting research and development of the whole vehicle foundry business (hereinafter referred to as the "cooperative business") for brand customers, and jointly cultivate R&D and production teams and develop cooperative business.
Lixun Precision said that Chery Holdings and its affiliated subsidiaries have been working in the automotive industry for many years, have a complete technology and product research and development system in the field of vehicles, especially in the vehicle manufacturing process, have an independent platform, and can provide Chery Automobile and other brand owners with comprehensive services from vehicle development to mass production, and have a strong and leading core competitive advantage in the industry.
The strategic cooperation framework agreement was signed with Chery Holdings and its affiliates, aiming to strengthen the strategic layout of the company's automotive business in an all-round way, make full use of Chery Group's deep technology precipitation and terminal brand resources in the field of new energy vehicles, set up a joint venture company and empower the company's technology accumulated in the field of consumer electronics for many years and customer resources, and dynamically enter the bureau and rapidly upgrade the company as a Tier under the strong support of the vehicle joint venture platform as the forefront of R&D design, mass production platform and sea exit 1 The comprehensive ability of the core components of the manufacturer, in practice, rapid grinding, optimization and volume, to achieve the diversification and large-scale development of the company's core components, to achieve the medium and long-term goal of becoming a leading manufacturer of Tier 1, to lay a solid foundation for the company's future sustainable development.
Luxshare Precision does not manufacture complete vehicles
Cooperate with Chery to develop the vehicle ODM model
This action of Luxshare Precision has attracted great attention from the market. According to the February 13 investor relations activity record table disclosed by Luxun Precision, hundreds of institutions, including Gao Yi Assets, E Fund, Huaxia Fund, Goldman Sachs Asset Management, etc., came to investigate.
Wang Laichun, chairman and general manager of Luxun Precision, explained the signing of a strategic cooperation framework agreement with Chery Group. She pointed out that Smart EV is an opportunity that Chinese automakers have not encountered in a hundred years. The opportunities brought by the Smart EV include not only the whole vehicle, but also the more vitality of the Tier1.
Luxun Precision's experience and market reputation in consumer electronics over the years can cooperate with Chery to develop another new industry - to build a good car for others. This is in line with the needs of market development, and it also meets the difficulties of the breakthrough in the growth of Luxshare Tier1. Luxshare Precision focuses on providing industry chain component solutions for the market, and is also committed to becoming the global leader in tire 1 auto parts.
She stressed that Luxshare Limited is an investor in Chery Holdings, and Luxshare Precision does not build complete vehicles, but cooperates with Chery New Energy to develop the ODM business of building good cars for others, and aims to seize the window of opportunity to fight into the world's leading Tier1. This cooperation will also create a precedent for global vehicle ODM business.
In terms of business, Chery is good at the vehicle business, the joint venture company will be led by Chery, and Luxshare Precision will coordinate in terms of business and customers.
It is understood that Luxshare Precision has been in the automotive business for more than ten years, mainly focusing on the "nervous system" of the vehicle, the main products are: connectors / connecting wires, low / high voltage vehicle wiring harnesses, special wiring harnesses, etc., the main customers include domestic traditional car companies, new car manufacturing forces and some large Tier1 manufacturers.
Luxshare Precision acquired and gathered technology equity
Focus on medical, building engineering and other businesses
In addition, on February 11, Luxshare Precision also announced that it intends to acquire about 74.67% of the shares of Convergence Technology (01729.HK), a company listed on the main board of the Hong Kong Stock Exchange, through its wholly-owned overseas subsidiary, Luxun Precision Co., Ltd., at a price of HK$1.104 billion.
Convergence Technology is a customized wire interconnection solution provider, with more than 20 years of industry experience, the main products are used in telecommunications, data centers, industrial equipment, medical equipment and network wire and other fields, with the corresponding R & D technology accumulation and operation management experience, and Luxshare Precision in subdivision products, customer service and other aspects have a strong complementarity.
The acquisition aims to further improve the company's strategic layout of interconnected products in the fields of communications, medical, automotive, and industrial from the aspects of products, customers, and markets. In the future, the company will empower each other with convergence technology in precision manufacturing, digital management, business philosophy and customer resources, continue to enhance strategic synergy, and safeguard the interests of the company and its shareholders.
Wang Laichun, chairman of Luxun Precision, said that at present, from the perspective of industry, market opportunities and its own operating conditions, Convergence Technology is a good company, and in the future, the company will empower each other with Convergence Technology and continue to play synergistic effects in business areas such as medical treatment, building engineering and optical cables. In addition, taking into account the company's new business development in the future, working capital requirements have also increased with the rapid growth of revenue scale, and having a new platform of convergence technology is conducive to future development for both parties.
The market value of Luxun Precision evaporated by nearly 70 billion
Affected by the news, Luxshare Precision rose to 6.46% intraday today, and as of the close, the stock was quoted at 41.9 yuan, with a total market value of 296.3 billion yuan.
However, Lixun Precision's performance during the year was poor, and as of now, the stock has fallen by nearly 15%, and the market value has evaporated by nearly 70 billion yuan.
Since 2022, a number of Apple concept stocks have suffered heavy setbacks. Goertek shares, Wingtech Technology, Lens Technology and other fruit chain leading stocks have fallen sharply. "Fruit chain" is also not fragrant?
"Fruit chain giant" Foxconn also cross-border car manufacturing?
In fact, in addition to Luxshare Precision, many "fruit chain" companies are trying to find new growth points.
As a "fruit chain giant", Foxconn has also frequently crossed borders recently. On January 4, Foxconn signed a strategic cooperation framework agreement with Byton Automobile and Nanjing Economic and Technological Development Zone to jointly promote the mass production of Byton new energy vehicle products. According to the agreement, Foxconn will provide advanced manufacturing technology, operation management experience and industry chain resources to fully support the mass production of Byton's first model, M-Byte.
On January 13, Foxconn and Geely Holdings signed a strategic cooperation agreement stipulating that the two parties will establish a joint venture to provide foundry production and customization consulting services for global automobile and travel enterprises, including but not limited to complete vehicles or components, intelligent control systems, automotive ecosystems and the whole process of the whole industry chain of electric vehicles.
In addition, many "fruit chain" related enterprises have also continuously expanded their horizons. Lens Technology and CNBM strategic cooperation to accelerate the landing of photovoltaic glass projects. The proportion of Wingtech Technology's ODM non-mobile phone business will increase, promoting the company's transformation from a service-oriented to a product-based company. East Asia Qianhai Securities said that the company, with its semiconductor business as the core, will benefit from the growth of the new energy vehicle market. In the future, the integration of semiconductor, product integration and optical module business will be further deepened, and the company will become a technology product company with semiconductor business as the leader.
For the acquisition of Chery Holdings and other equity by Lixun Precision, CITIC Securities Research Report pointed out that participating in Chery and building a joint venture company have laid a good foundation for the future entry into the vehicle ODM, and the current time is opportune. In addition, the company has the foundation to enter the vehicle manufacturing and can effectively complement the original business. From parts to the whole, the new blue ocean space of the company's automotive business was confirmed to open. At present, the company's automobile-related business is mainly auto parts business (taking the new energy passenger car high-voltage connection line as an example, the value of the bicycle is about 2,000 yuan), and in the future, through the joint venture business with Chery, if the entry into the vehicle ODM is smooth, it is speculated that the value of the bicycle is expected to increase significantly.
EDIT: Captain