Apple's electronics industry chain, which was favored by the market in the past, seems to be no longer the halo due to changes in the business environment, and has been transformed. In the front, there is Changying Precision vigorously laying out the structural parts of the power battery, and after that, Lansi Technology has opened up a new battlefield for photovoltaics.
In the new energy vehicle track, following Foxconn's announcement last year and the world's fourth largest automobile group Stellantis to establish a joint venture, into the automotive field, now the fruit chain leader Luxshare Precision can not sit still.
(Stellantis: Peugeot Citroen, Chrysler parent company.) In July 2021, the Stellantis Group announced its electrification strategy: by 2030, more than 70% of the Group's sales in Europe and more than 40% of the Group's sales in the United States will come from low-emission models. All 14 of the Group's iconic car brands are launching pure electric vehicles. By 2030, the strategy will generate annual revenue increases of around €20 billion. ）
On February 12, Luxun Precision released two transactions with a total investment of about 11 billion yuan to the market. First, Lixun Precision's controlling shareholder, Lixun Limited, intends to 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; second, through a wholly-owned overseas subsidiary for HK$1.104 billion, it acquires 74.67% of the equity of Hong Kong-stock Convergence Technology for HK$1.104 billion.
Why did the fruit chain giants expand their business successively? After the cooperation between Luxun and Chery, what is the possible development direction? What is the timing of entering the game at this time?
The wind is blowing
The world's environmental awareness is high, and the new energy revolution of batteries replacing traditional fossil energy has brought about a surge in demand for new energy batteries in recent years. The domestic double carbon target is put forward as the general direction of development, and the development of new energy is a strategic thing.
Judging from the regional market trend of global new energy vehicles, Europe will always accelerate upward in 2020. In 2021, the overall high level of the European new energy vehicle market is stable. China's new energy vehicle market continues to trend strongly in 2021, and continues to accelerate upward in the 3-4 quarters. New energy vehicles in the US market are relatively sluggish and stable.
Looking at the domestic situation, the domestic new energy vehicle market is hot in 2021, according to the data of the Federation of Passenger Vehicles, the domestic retail sales of new energy vehicles reached 2.99 million units, an increase of 170% year-on-year. "In 2022, many car companies have set ambitious production and sales improvement targets, so we are confident that the sales of new energy passenger cars will reach about 5.5 million units in 2022, and continue to achieve high growth of about 70%." ”
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%.
From the above data and charts, we can see that the development speed of new energy vehicles is too fast, especially in China, and it is still maintaining a high growth trend.
It is in such a context that major traditional car companies and Internet car companies have entered the new energy vehicle track.
Taking China as an example, Xiaopeng Automobile, Ideal Automobile, Nezha Automobile, Zero-run Automobile, WM Automobile, Extreme Kr Automobile, Lantu Automobile, Jihu Automobile and even Xilis are constantly updating their models to seize this market. Last year, Xiaomi wanted to "build a car" is one of the biggest news in the new energy vehicle track.
Although the growth of the new energy vehicle track is good, in the environment where major giants have announced "smashing money to build cars" and competing for deer, Luxun Precision chose to enter the game at this time, why?
reason
In the past two years, the consumer electronics track is sluggish, the fruit chain scenery is no longer there, and the gross profit margin of mobile phone products is the reality faced by Apple industry chain manufacturers.
In the third quarter of 2021, the net profit of Luxun 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. If you look at single-quarter profits, the decline in profits in 2021 is clearer (see chart below). In addition to Luxun Precision, OFILM, Lens Technology, and Goertek are also distressed by poor performance. "Making money and not making money" is almost a true portrayal of the domestic apple industry chain manufacturers.
The author wrote at the end of January this year that "Apple returns to the 'throne'!" Can the "fruit chain" rise? Since Apple launched the latest mobile phone product iPhone 13 series in September and October last year, the overall performance of listed companies with the concept of A-share Apple in China has not been good.
Let's update the data now. Choice data shows that since the beginning of October last year (February 11), the growth and fall of Apple's concept sector component range (arithmetic average) is -1.02%, and the shanghai and shenzhen A-shares are 3.64% in the same period. The fruit chain still did not outperform the average increase of CSI (see chart below).
In the case of the decline in the growth trend of consumer electronics, it is not difficult to understand that fruit chain giants have entered the most "fashionable" new energy at present.
According to the report of the first financial economy: 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 current "low profit" dilemma with the help of cross-border.
Lixun Precision announced that the company and Chery Holdings and its affiliates jointly signed a strategic cooperation framework agreement, aiming to strengthen the company's automotive business strategic layout 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. (Tier 1: Tier 1 supplier to automakers)
"The company wants to seize this opportunity to achieve Tier1 take-off in the next 35 years." Luxun Precision said that the market size of Tier1 itself is almost 70% of the total output value of all car companies, such as the world's four major Tier1 manufacturers Bosch, Denso, ZF, Magna, established for more than 50 years, the revenue scale is more than 30 billion US dollars, there are no Chinese companies. Among the top 100 Tier1 manufacturers in the world, there are only 8 Chinese companies.
"Luxshare Precision has been looking for suitable automakers to lay out the field of new energy vehicles, Chery Automobile and Luxun have a lot of contacts in business, this official announcement of cooperation is not unexpected, in essence, the two cooperation plans have long been on the agenda." At the same time, there are not many automobile factories in the market that can choose investment and cooperation for Luxshare Precision, some of which have a relatively high cooperation cost and some of which have a weak synergy effect. A consumer electronics researcher at a local securities company in Guangzhou told the Securities Daily reporter.
According to the minutes of the february 13 institutional research meeting released by the company, "Chery has mature production capacity and is one of the few partners in China suitable for carrying out ODM car manufacturing business models, and the cost of cooperation between the company and Chery is relatively low, but it has higher and faster potential benefits." ”
According to the annual report of Luxun Precision in recent years, the company focuses on the "blood vessel and nervous system" of the whole vehicle in the automotive field, and the specific products include the functions of the vehicle and special wiring harness, the high-voltage wiring harness and connector of the new energy vehicle, the on-board communication unit (TCU) and the central gateway. According to the company's 2021 semi-annual report, automotive interconnection products and precision components accounted for 3.68% of the company's operating income, about 1.77 billion yuan.
Before Luxun, Foxconn, the world's largest electronics foundry, had already entered the game, and in the past few years, it had made frequent moves in the automotive field. From Byton and FF to Fisk to crazy investment in car factories, automotive strategies have gradually surfaced.
2 of Foxconn's latest news this year are:
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.
Foxconn Chairman Liu Yangwei 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.
direction
Luxun is one of the domestic fruit chain leaders, in recent years Apple car manufacturing rumors continue, and Apple has indeed "steadily advanced" in the automotive business (see figure below). Based on this, the author speculates that Luxun's cooperation with Chery this time is mainly to obtain vehicle production qualifications and facilitate the cooperation with Apple to build cars later. Of course, according to the current Announcement of Lixun, the official did not say that it was necessary to "build a car" (build a whole vehicle), but "strengthen the strategic layout of the company's automobile business". Luxun said that it will cooperate with Chery New Energy to develop ODM business - build good cars for others, and this cooperation will also create a precedent for global vehicle ODM business.
Due to the trend of electrification of automobiles, the traditional power composition (engine, gearbox) is replaced by the three-electric system (motor, electronic control, battery), and the technical threshold is lower. In addition, the intelligent trend of the car, from the past hardware definition to the future hardware + software definition, is also conducive to the entry of players like Apple.
Previously, some institutions have made predictions that the layout mode of Apple's car will also be modeled on the layout mode of mobile phones, the core chip, operating system, and motor electronic control will be carried out through self-research + OEM, and battery and vehicle manufacturing will seek partners.
Based on the above situation, the author speculates that the current consumer electronics companies in the Apple industry chain will change from "working for Apple mobile phones" to "working for Apple cars" in the future, which is relatively large. The industrial production process management capabilities accumulated by Luxun, Foxconn and Apple in their previous long-term cooperation will be more likely to be favored by Apple than other companies. After all, the partnership has been so many years, the company's ability has been recognized by Apple.
occasion
Based on the above reasons, it seems reasonable for Luxun to start with consumer electronics to lay out cars. However, in the case of many companies have entered the new energy track, Luxun entered the market at this time, is it really good?
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.
So does Luxshare have that much money now?
According to the third quarter report of 2021, in the first three quarters of last year, the net profit attributable to the mother of Luxshare Precision was 4.690 billion yuan. As of the end of the third quarter of last year, Luxshare Precision had a total of 63.053 billion yuan of current assets, of which the monetary funds were 15.668 billion yuan.
A bit embarrassing.
Therefore, Lixun can not say that it wants to "build a car", the company clearly stated in the minutes of the institutional research meeting on February 13: "The company does not build cars, but cooperates with Chery to develop another new industry - to build a good car for others." ”
From the current situation, Luxshare is most likely to change from a mobile phone parts supplier to an auto parts supplier. According to the announcement, Luxshare Precision's medium- and long-term goal is to "become a leading manufacturer of Tire1 auto parts". And when will Luxshare "wind up"? The key point in time is likely to be that Apple began to build cars.
For choosing the current point in time to enter the game, Luxun admitted that if you only rely on your current rhythm and speed, you are worried about missing the window period; especially when there is an ODM opportunity, the company is also worried about losing the opportunity to enter key components.
Luxun said that the ODM business has a relatively clear landing project, which will be put into production in about 12-18 months.
market
Lixun Precision's stock price has fallen by about 20% since the beginning of the year (February 11), and after the announcement of the company's entry into new energy at the weekend, Monday (February 14) opened high and went low, and the disk did not reach an "exciting" performance, which may be related to the overall environment of the market in recent days, or the market is not optimistic about Luxun choosing to enter new energy at this time.
On February 14, 2022, Luxshare Precision disclosed in the Shenzhen Stock Exchange Interactive Easy that as of February 10, 2022, the number of shareholders of the company was 245,900, and the author estimates that the number of shareholders in the company increased by 0.69 million from the previous period (239,000 on January 28, 2022), an increase of about 2.9%.
According to WIND data, since the beginning of 2021, important shareholders have increased their holdings more times.
Summarize this article in one sentence: consumer electronics is sluggish, the trend of new energy is growing strongly, and fruit chain companies have expanded their business and laid out new energy. When the wind rises, you can pay attention to the timing of Apple's car. In addition, for the future landing time of ODM projects, Luxun said that it is about 12-18 months. In other words, more details may be visible by the summer of 2023 at the latest.
Extended thinking: The manufacturing industry has found the direction of "car building" and industrial intelligent upgrading, so where is the direction of the Internet?
Xu Yuanyao