Alleviating the hidden worries of high-end chips "lack of cores", the giants chose to cooperate with the giants.
Industrial capital never sells casually.
On March 11, Qianzhao Optoelectronics (300102. SZ) issued an announcement disclosing the progress of the year-and-a-half-year-long increase. The fixed increase, at a price of 8.00 yuan per share, issued 187.5 million shares, raised 1.5 billion yuan from 8 issuers, and the lock-up period was 6 months.
The fundraising is mainly used for Mini/Micro, high-efficiency LED chip R&D and manufacturing projects and supplementary working capital.
A total of 28 investors participated in the subscription, and 8 were eventually spent.
Among these 8 specific distribution objects, Hisense Video (600060. SH, hereinafter referred to as Hisense) is proud of the crowd, and "Dingge" was allocated 62 million shares, with an allocation amount of 496 million yuan, ranking first in the list of fixed increases.
Huaneng Trust, Dentons International, JP Morgan Chase Bank (JPMorgan Chase), Hongyang Investment, Nord Fund and other well-known investment institutions are also among them.
Source: Dry Photoelectric Announcement
The pricing base date of the additional offering is March 1, 2022, and according to the regulations, the final actual issue price is not less than 80% of the average price of the company's shares in the 20 trading days before the first day of the issuance period, that is, not less than 6.65 yuan per share.
The final issue price of this fixed increase is as high as 8.00 yuan / share, which is 1.2 times the benchmark price, and it is only 7.7% discount from the closing price of 8.67 yuan / share on March 11.
Such a low discount rate, the high market subscription sentiment can be seen. Qianzhao Optoelectronics, not only investment institutions to apply for active purchases, but also obtained Dongshan Precision (002384. SZ), BOE (000725. SZ), Hisense video and other industrial capital favored.
Hisense gave three offers: 8.4 yuan, 8.6 yuan and 8.7 yuan, and won the first place in this fixed increase, with a shareholding ratio of 6.93%, it became the largest shareholder of Qianzhao Optoelectronics after the fixed increase.
Hisense is a domestic TV leader, domestic sales have remained the first for more than ten consecutive years; and Qianzhao Optoelectronics is one of the leading in the domestic LED industry, why is Hisense interested in upstream LED chips?
Since 2020, the main theme of the entire electronics industry has been "missing cores".
Although LED chips are very different from traditional logic chip manufacturing processes and applications, the lack of traditional silicon-based chips has led to an urgent production capacity, a sharp increase in costs, and a decline in performance for terminal manufacturers such as mobile phones and automobiles.
Today's high-end Mini/Micro LED production capacity is limited, while the demand is growing exponentially, it is not excluded that there will be a shortage of supply in the short term.
In order to cope with upstream capacity constraints, downstream "backward integration" strategies are not uncommon. Many terminal manufacturers have chosen to extend cooperation upwards under the threat of "lack of core and less electricity" to ensure supply.
Just like the new car-making forces are cultivating their own lithium battery suppliers, because only by grasping the core raw materials can we be afraid of market disturbances. Nowadays, the localization of panel production capacity has been well done, and the next step that really restricts the progress of TV factories is the high-end Mini/Micro LED chip.
Only by grasping the trend of change can we establish and maintain our own moat.
Looking back at the process of Hisense winning the bid, it seems that there is a kind of posture of "raising this fixed increase to the strategic level, only success is allowed and no failure is allowed".
Giants grab the chips
Hisense came prepared this time, with a clear goal, and from the very beginning showed its determination not to give up without taking this pledge.
This fixed increase can allow three offers (at the same time), Hisense's quotation gradient is 8.40 yuan / share, 8.60 yuan / share and 8.70 yuan / share, and the subscription quantity is maintained at the "top grid" of 62 million shares.
You know, the last highest bid of 8.70 yuan / share is not only 1.3 times the benchmark price, but also beyond the closing price on March 11. That is to say, if Hisense trades at 8.70 yuan / share, the cost is greater than the cost of individual investors buying stocks directly from the secondary market.
Originally, the advantage of the fixed increase was the discount, and Hisense actually appeared in the bidding process at a premium price, obviously, Hisense should have done a full psychological construction.
In this fixed increase, Hisense's biggest opponent is BOE.
Like Hisense, BOE's first shot is also a "top grid" subscription. The two companies are also the pre-sale objects with the largest number of subscription shares in this subscription, and the 62 million shares of "Dingge" account for 33% of the actual number of shares issued.
Source: Qianzhao Optoelectronics Announcement, collated by Alpha Workshop Research Institute
In fact, BOE's first round of bids is not low, reaching 7.55 yuan / share, ranking eighth in the first round of quotations of the 22 companies. Perhaps due to cost considerations, BOE did not raise the offer later and withdrew from the competition.
One is the panel factory, the other is the terminal TV factory, which is the upstream and downstream relationship between Hisense and BOE, why do they look at Qianzhao Optoelectronics at the same time?
The traditional LCD LCD TV has been very mature, whether it is the upstream panel factory or the downstream TV factory has encountered its own development bottleneck. In recent years, the large generation line has been frequently opened, panel factories have entered a cycle of overcapacity, and panel prices have "fallen endlessly".
In contrast, TV factories, the falling panel price further reduces the cost and threshold of TV assembly, the sales volume of superimposed terminals tends to be saturated, and the Red Sea competition of TVs tends to be white-hot.
Sail against the current, and if you don't advance, you will retreat. Standing at the cusp of industry change, "thinking about change" is the common theme of the whole industry.
In recent years, Hisense has been committed to promoting new products, curved screen TV, OLED TV, QLED TV, laser TV, are hisense constantly trying new technologies, intended to lead the high-end development trend of TV.
BOE focuses on small-size OLED panels, while increasing the research and development of large-size 4K/8K LCDs, aiming to improve the added value of panels.
Nowadays, both sides are looking at the "ultimate display technology" with the highest certainty of the future - Mini/Micro LED.
It seems to be the competition between Hisense and BOE, but in fact, the connotation is the contest between panel factories and TV terminal factories, who have more chips, who will occupy an advantage in the future competition.
Small LEDs ushered in an explosive period.
Mini LED take-off is imminent
Since 2019, Apple has pioneered the iPad with The Mini LED backlight. Subsequently, TCL, Hisense, Asus, Innolux, AUO, BOE and other giants have launched Mini LED backlight or similar technologies such as TVs, displays, VR and car displays, and Mini LED has become one of the hottest concepts in consumer electronics in the secondary market.
So, what is a Mini LED? What is the relationship and difference between Mini LED and traditional LCD?
Mini LED technology is reflected in two places: one is as a backlight, which is not much different from the principle of traditional LCD, which is nothing more than replacing the previous entire backlight board with a light source with finer graininess; the other way is as a pixel, direct display, and the precise control requirements for pixels are higher.
Today's more common application of Mini LEDs is to use as a backlight to improve the display accuracy and brightness of the LCD.
Compared with the traditional LCD backlight, Mini LED is smaller in size and brighter; compared with OLED of organic luminescent, Mini LED will not be disturbed by material activity because it uses inorganic materials, and under the premise of ensuring ultra-high brightness, it can avoid hidden dangers such as screen burning, light leakage, and rapid aging of parts.
Source: TCL official website
Mini LED backlight display products can achieve high-quality display effects in terms of image quality, saturation and contrast, and the product life and cost performance are significantly better than OLED display solutions, which is expected to become the best choice for ultra-high-definition display terminals of mainstream manufacturers.
The chip size of Mini LED generally ranges from tens of microns to hundreds of microns, so small in size, compared with large size LEDs, the terminal dosage directly increases exponentially.
Take the 2021 iPad Pro as an example. In the 12.9-inch display area, more than 10,000 LEDs are accommodated, for a total of 2,596 full-array local dimming zones.
Source: Apple's official website
With the help of Apple, the popularity of Mini LED is likely to enter the fast lane.
Let's first review the promotion process of Apple's OLED screen. The iPhone X released in September 2017 was Apple's first OLED screen phone, and at that time, the OLED screen was basically only used by Samsung (because Samsung Display was the only large OLED supplier in the world at that time), and the penetration rate was very low.
After more than four years, the "Apple effect" has driven global mobile phone manufacturers to embrace OLED screens, according to the data of the Communication Institute, the penetration rate of OLED mobile phones in China in 2021 will exceed 50%.
Back to the Mini LED, after Apple products use Mini LED as a backlight, it is expected to set off an "Apple storm" again and further accelerate the sinking of Mini LED.
According to LED inside's forecast, the global Mini LED output value will reach 1 billion US dollars in 2023, and the Micro LED market output value will reach 2.891 billion US dollars in 2025. Undoubtedly, Mini/Micro LED will be the segment with the highest certainty and the greatest room for development in the future.
According to incomplete statistics, in the whole year of 2021, the new investment in Mini/Micro LED and other fields exceeded 75 billion yuan, far exceeding the 43 billion yuan in 2020.
With the continuous maturity of Mini/Micro LED technology, companies related to the industry chain in the secondary market are also moving.
Sanan Optoelectronics (600703. SH) has been laid out since 2018, and in 2019, Hubei San'an was established, mainly engaged in the research and development of Mini/Micro LED epitaxial and chip products and related applications.
In 2020, Sanan Optoelectronics has achieved batch supply of Mini LED and Micro LED chips, and has become the premier supplier of Samsung and signed a supply agreement.
On March 9, Sanan Optoelectronics issued an announcement that since the beginning of 2022, the company has continued to receive international single important major customer Mini LED chip purchase orders, the amount of more than 170 million yuan, of which the delivery amount of about 100 million yuan has been completed in January and February 2022, and the remaining amount will be delivered to customers in March.
Although the name of the international major customer was not announced, through the previous supply agreement, this customer is most likely Samsung, and presumably entering the Apple supply chain is just around the corner.
TCL released the 8K Mini LED Lingyao Zhiping 85" X12, 85-inch area in the second half of 2021, densely packed with 96,000 Mini LED chips, it is reported that the chip supplier is Sanan Optoelectronics.
At the end of 2020, HC Semitek (300323. SZ) also launched a $1.5 billion additional issuance program for the Mini/Micro LED R&D and manufacturing project and the GaN-based power electronics device R&D and manufacturing project, in an attempt to further expand its Mini LED production capacity.
Huawei's V75 Super smart screen is exclusively supplied by HC Semitek, and up to 46,080 Mini LED chips are placed under the 75-inch screen, making it have 2880 physical backlight partitions.
It can be seen that terminal TVs are gradually converted from mainstream LCDs to Mini LEDs. In the past two years, in the field of consumer electronics, the demand for Mini LED installation has increased significantly, and the future realization of large-scale applications will be very certain.
According to Sigmaintell data, Mini LED backlit TVs will ship 1.6 million units in 2021, and it is expected that by 2025, the shipment scale will reach the level of 9 million units.
First, the Mini LED is used as a backlight, which refines the light source to achieve a better visual experience. Then, the micro LED chip, the big killer homologous to Mini LED technology, is directly used as a display pixel, and the more refined Mirco LED will surpass OLED to become the top match of the display industry.
At present, the biggest technical obstacle to Micro LEDs is the huge transfer. As the name suggests, it is very troublesome for a large and small number of Micro LED chips to be transferred from the manufacturing end in batches and orderly to the display terminal, which also temporarily restricts its development in the commercial market.
In fact, Samsung has launched the first 75-inch Micro LED TV in 2019, but the price of tens of thousands to hundreds of thousands of dollars has deterred ordinary consumers.
With the advancement of technology, when the huge amount of transferred technology achieves economic commercialization breakthroughs, Micro LED will "kill all four parties" and realize the creation of new tracks.
The identified tracks and surge in demand are driving the expansion of production by manufacturers with the ability to manufacture high-end Mini/Micro LED chips.
The Qianzhao Optoelectronics additional investment project is expected to add an annual output of 6.36 million pieces of Mini LED BLU, Mini LED GB, Micro LED chips, and high-efficiency LED chip production capacity after completion.
According to the calculation of Qianzhao Optoelectronics, the construction period of Mini/Micro and high-efficiency LED chip R&D and manufacturing projects is 3 years, the second year of production, the fifth year of production, the internal rate of return is 15.47% (after tax), the investment payback period is 7.46 years (after tax) (including the construction period), with better economic benefits.
Therefore, all kinds of capital flock to it, hoping to get a piece of the pie in the definite outlet, and even participate in the fixed increase at the "premium".
VCSEL multiplies the "East Count West" East Wind
In addition to the traditional LED and the planned investment in high-end Mini/Micro LED, in fact, Qianzhao Optoelectronics also has a VCSEL (Vertical Cavity Surface Emitting Laser, vertical cavity surface emitting laser) business also has considerable room for development.
Qianzhao Optoelectronics has many years of experience in the field of GaAs (Gallium Arsenide, Semiconductor Materials) optoelectronic devices, while red and yellow LEDs and VCSEL belong to the gaAs material system, so R&D and mass production VCSEL has technical and production line advantages.
Compared with other semiconductor lasers, VCSEL has superior performance: very low operating thresholds, wavelengths and thresholds are relatively insensitive to temperature changes, easy coupling to fiber optics, simple packaging, and long operating life expectancy.
At present, there are mature applications in the fields of face recognition, ranging, AR/VR, lidar and so on.
Source: Qianzhao Optoelectronics official website
Qianzhao Optoel's VCSEL chip covers multiple bands of products, with power ranges from low-power 5mW single-hole to high-power 8W arrays, forming a rich product matrix. It can be applied to mobile phones to support face brush authentication, and can also be used as an important component of AR/VR.
The highest power specification of VCSEL products available at this stage is 8W, which can be applied to close-range vehicle radar, and has not yet reached the technical requirements of vehicle-mounted lidar.
However, Qianzhao Optoelectronics is likely to further develop VCSEL products with 20-30W and higher power, so as to enter automatic driving with the help of lidar.
At present, Qianzhao Optoelectronics has passed the qualification audit of the vehicle regulation production line and obtained the IATF16949 certification, which is conducive to the vehicle regulation audit of its lidar customers.
Lumentum, Finisar, AMS and other international first-class manufacturers control the core technology, and the future domestic substitution will also be the trend of the times.
VCSEL is also widely used in data centers and cloud computing, and VCSEL is the basis for optical interconnection of big data rates in data centers.
In the past 10 years, the data transmission rate of the commercial mass-produced 850nm VCSEL optical wiring solution has increased to 25Gbit/s per channel, and the parallel fiber transmitter products using VCSEL arrays have exceeded 100Gbit/s.
At present, VCSEL has replaced edge emitting lasers with a distance of less than 500 meters, and being able to test on wafers is its biggest advantage, reducing the tedious steps of back-end testing and improving efficiency.
The "East Counting West Calculation" project has vigorously promoted the development of data centers and cloud computing, and the tide of digital economy has brought about massive data transmission needs.
To support multi-gigabit transmission, VCSEL stands out for its reliability, power efficiency, and ease of deployment cost as the mainstream choice for multimode architectures. It is conservatively estimated that the global VCSEL data communication market size will reach $13 billion.
The development of the VCSEL industry is unlimited, and Qianzhao Optoelectronics has also made landmark progress.
On January 27, 2022, Qianzhao Optoelectronics said on the investor interactive platform that the VCSEL chip has completed certification and sales performance in some fields in 2021, mainly in the field of secure payment.
According to the 2021 semi-annual report of Qianzhao Optoelectronics, in terms of VCSEL lasers, Qianzhao Optoelectronics develops products in multiple bands at the same time to deepen the application market, of which the PCE efficiency of i-TOF products shipped in batches is stable at more than 40%, and d-TOF products are steadily promoting research and development.
In addition, Dry Photoelectric has also made significant progress in improving the high temperature characteristics of VCSEL products.
The VCSEL business is likely to add new value points to the valuation logic of Qianzhao Optoelectronics.
The fixed increase is just the beginning
On the whole, the business of Qianzhao Optoelectronics has a fairly broad development prospect from the existing foundation and the future outlook, but the stock price has always been at a low level. As of the close of trading on March 11, the market value of Qianzhao Optoelectronics was only 6.133 billion, and the investment value was prominent.
According to the information disclosed in the performance forecast, the net profit attributable to the mother in 2021 was 182-219 million yuan, compared with a net loss of 247 million yuan in the same period of the previous year, a sharp turnaround from a year to a profit.
Performance is on the verge of release, technology is at the threshold of industry revolution, and prices are in the low valuation range, so it is not difficult to understand the motivation for a large number of investors.
Just in June 2021, Jucan Optoelectronics (300708. SZ) completed its first fixed capital increase after listing. After the raised funds of 702 million yuan were in place, the scale of interest-bearing liabilities was effectively reduced, the financial situation was greatly improved, and the subsequent stock price rose from near 12 yuan to a maximum of 24.28 yuan.
Source: Flush iFind
Coincidentally, at that time, Dingzeng also had the figure of Xiaomo JP Morgan Chase, an internationally renowned investment institution, and the doubling of the stock price also proved the correctness and sensitivity of its bet at that point in time.
Qianzhao Optoelectronics' fixed increase in capital is very similar to Jucan Optoelectronics, and it will also have a positive impact on the company's follow-up operation and performance. The potential return on investment of JP Morgan Chase may refer to the case of Jucan Optoelectronics to a certain extent.
Not only are there professional investment institutions actively participating in this fixed increase, but also the big guys in the industry - Hisense and BOE at the same time look at Qianzhao Optoelectronics, which also fully proves its important position in the industry.
And Hisense's crazy "rush to raise" is strong, which is reverie. In the future, Hisense will continue to increase investment, become the actual controller of Qianzhao Optoelectronics, and even incorporate it into the Hisense system, there is considerable possibility
Undoubtedly, Hisense's shareholding will strengthen the market share of Qianzhao Optoelectronics in the Mini LED market, effectively open up the upstream and downstream of the industrial chain, achieve internal integration, and expand the competitiveness and influence of both enterprises. It not only lays a more stable strategic development direction for Qianzhao Optoelectronics, which has no actual controller for many years; it also brings endless imagination to the future growth space of Qianzhao Optoelectronics.