Jiwei Network News (Text/Chen Wei) On November 29, 2021, Dongguan Liuchun Intelligent Technology Co., Ltd. (hereinafter referred to as "Liuchun Technology") commented on the Shenzhen Stock Exchange's "explanation of the reasons for the significant decline in the purchase amount of tape in raw materials in 2019 during the reporting period, and the reason for the sharp increase in the purchase amount and proportion of protective film in 2020." "I replied to the inquiry.
During the reporting period, the procurement of raw materials for smart tape and protective film raw materials in Liuchun was as follows:
During the reporting period, Liuchun intelligent tape raw materials showed a sharp decline in 2019, and the purchase amount and proportion of protective film raw materials in 2020 increased significantly, mainly due to the reduction in demand demand for tape and protective film raw materials caused by changes in the order demand structure, and the change in the procurement price of various types of tape and protective film raw materials. The specific analysis is as follows:
1. Analysis of the reasons for the sharp decline in adhesive tape raw materials in 2019
During the reporting period, the change in the purchase quantity of different types of raw materials is essentially due to the change in the downstream order demand structure, because the issuer produces a special number of functional device product specifications and models, and the reporting period changes greatly, therefore, there are certain fluctuations in the composition ratio of raw materials in different categories.
(1) Under the background of the basic matching of the production scale and sales scale of tape-containing raw material products, the change in the procurement scale of tape-containing raw materials during the reporting period is essentially driven by the change in order demand for products containing tape-containing raw materials.
From the above table, it can be seen that in general, the production scale of products containing adhesive tape raw materials basically matches the sales scale. From the perspective of the product structure at the sales end, the order demand for products containing adhesive tape raw materials decreased in 2019, resulting in a decline in the scale of the issuer's independent production of such products, resulting in a decline in the procurement scale of tape raw materials. The decrease in orders for products containing tape raw materials is mainly due to the issuer's strategic choice to undertake orders for stamping process functional devices with more sales prices and higher profit margins in the current period, while the stamping process functional devices do not involve the use of tape raw materials.
(2) From the perspective of the proportional relationship between the purchase volume and the production consumption, the purchase quantity of tape raw materials and the production amount of the production consumption during the reporting period are highly matched.
In addition to production and use, tape raw materials are also partially used for research and development proofing and a small amount of direct sales, therefore, there is a certain fluctuation in the proportion between the purchase quantity of tape raw materials and the amount of production and use during the reporting period; however, the proportion relationship is generally stable, and the purchase quantity of tape raw materials is generally driven by production consumption demand, and the production consumption demand is driven by sales order demand.
(2) The impact of changes in the procurement structure of different types of tape raw materials
During the reporting period, the procurement of tape raw materials for the top five specifications and models was as follows:
Most of the raw materials used in the electronics industry are polymer chemicals and fine chemical products related materials, with a wide variety of materials, and there is a certain price difference between materials of different specifications and different properties. At the same time, due to factors such as customer structure, sales structure, product structure changes and designated procurement situation of terminal brand manufacturers, the procurement structure of raw materials of each model of tape in each period also changes.
From the above table, it can be seen that the proportion and average purchase price of tape raw materials in the first five major specification models in 2019 are the lowest, and there is a sharp decline compared with 2018, mainly due to changes in the product structure at the sales end, and the tape raw materials purchased in that year are mostly lower-priced models.
2. The reason for the sharp increase in the purchase amount and proportion of protective film raw materials in 2020
(1) Under the background of the basic matching of the production scale and sales scale of raw materials containing protective film, the change in the procurement scale of protective film raw materials during the reporting period is essentially driven by changes in order demand for products containing protective film raw materials.
From the above table, it can be seen that in general, the production scale of raw materials containing protective film basically matches the sales scale. From the perspective of the product structure at the sales end, the rapid growth of order demand for products containing protective film raw materials in 2020 has led to a significant increase in the scale of issuers' independent production of such products, thus driving a significant increase in the procurement scale of protective film and strip raw materials. In addition, Kunshan Liuchun, a new subsidiary of the issuer established in 2019, purchased 12.2157 million yuan of protective film raw materials from Kaiwei Electronics Co., Ltd., a supplier designated by the terminal brand owner, in 2020. Therefore, the issuer's procurement scale of protective film raw materials in 2020 has grown rapidly.
In addition to production and use, protective film raw materials are also partially used for research and development proofing and a small amount of direct sales, therefore, there is a certain fluctuation in the proportion between the purchase quantity of protective film raw materials and the amount of production and use during the reporting period; however, the proportion relationship is generally stable, and the purchase quantity of protective film raw materials is generally driven by production consumption demand, and the production consumption demand is driven by sales order demand.
(3) The impact of changes in the procurement structure of different types of protective film raw materials
During the reporting period, the procurement of protective film raw materials of the top five specifications and models is as follows:
As can be seen from the above table, in 2020, the procurement ratio and average purchase price of the top five specification models of protective film raw materials are quite different from those in 2019 and 2018. In 2020, the issuer newly developed direct customers such as Gilead and Ruiyi Optoelectronics, which are the production of display-related components for the terminal brand Sharp; according to the requirements of the terminal brand merchant Sharp, when the issuer produces supporting functional devices for customers such as Gilead and Ruiyi Optoelectronics, it must also purchase a number of protective film raw materials designated by the terminal brand owner Sharp; these designated protective film raw materials are specially developed for the design and development of Sharp's terminal electronic products, and the purchase price is higher With the expansion of the issuer's sales scale to direct customers such as Gilead and Ruiyi Optoelectronics, the procurement scale of the above-mentioned protective film raw materials has also continued to grow.
(Proofreading/Andy)