As we all know, as apple is the leader of global consumer electronics, as long as it can catch this line, it can quickly develop and grow its own strength, and it can squeeze into the Apple industry chain, indicating that the company has a strong market competitiveness and can be recognized by Apple.
Recently, Suzhou Newland Precision Technology Co., Ltd. (hereinafter referred to as "Xinlu Precision"), as a supplier of Apple's keycaps, is preparing to sprint for an IPO. According to the data, the company's chosen listing place is the Shanghai main board, and its IPO application has been accepted, if the sprint is successful, then A shares will add another "fruit chain" member.
However, flipping through its prospectus found that Xinlu Precision is deeply bound to Apple, and the source of revenue is mainly Apple and its industrial chain companies, but xinlu precision performance is fluctuating and is deeply affected by the market performance of Apple products.
Performance is volatile and prospects are unclear
According to the prospectus, Xinlu Precision focuses on precision machining, precision injection molding and automation, and the company's main products are the overall solution for the production of keycap fixtures, which is the core supplier of keycaps production fixtures for Apple and its industrial chain manufacturers.
Although squeezed into Apple's industrial chain, the company's performance in recent years has not been stable, and the fluctuating performance of revenue and net profit has also worried about the future prospects.
According to the prospectus, from 2018 to the first half of 2021 (hereinafter referred to as the reporting period), Xinlu Precision achieved revenue of 166 million yuan, 121 million yuan, 240 million yuan and 106 million yuan respectively, and achieved net profits of 40.2846 million yuan, 48.0535 million yuan, 108 million yuan and 41.2813 million yuan. It is not difficult to find that Xinlu Precision's revenue in 2019 has declined, but the net profit has remained slightly increased, and in 2020, it has suddenly exploded, with revenue increasing by 75.87% year-on-year, and the revenue and net profit in the first half of 2021 are equivalent to half of the full year of 2020.
In this regard, Xinlu Precision explained that 2020 is mainly due to the outbreak of the epidemic, benefiting from the increase in demand for remote work and distance education, as well as Apple's sale of a new generation of MacBook Air and MacBook Pro laptops, which has led to a significant increase in the company's performance.
Specifically, the overall solution for the production of keycap fixtures and precision tooling fixtures are the two core products of Xinlu Precision, contributing more than 80% of the revenue, and the proportion of precision mold and product business revenue is relatively small. However, the revenue of the above three categories of products during the reporting period was not stable and fluctuated significantly.
During the reporting period, the revenue of Xinlu precision keycap production fixture overall solution business was 98.2219 million yuan, 93.9561 million yuan, 165 million yuan and 45.7455 million yuan, respectively, a year-on-year decrease of 4.34% in 2019, another 75.87% increase in 2020, and less than half of 2020 in the first half of 2021; in the precision tooling business, the revenue during the reporting period was 38.5009 million yuan, 10.2321 million yuan and 62.7140 million yuan, respectively 42.451 million yuan, like keycap products, plummeted by 73.42% in 2019 and soared by 512.92% in 2020.
In addition, the income of precision mold and products business continued to decline, and during the reporting period, the revenue of this business was 26.3022 million yuan, 9.8363 million yuan, 8.723 million yuan and 10.1563 million yuan, respectively. In 2019 and 2020, it fell by 62.6% and 11.32% year-on-year, respectively.
From the perspective of product price, during the reporting period, the average selling price of the above products has fluctuated to a certain extent, among them, the price of the plastic module in the keycap products is 11.2 yuan, 10.82 yuan, 11.14 yuan and 10.11 yuan, and the price of aluminum plate is 45.14 yuan, 58.15 yuan, 47.01 yuan and 43.58 yuan, respectively; the average price of precision tooling fixtures is 719.45 yuan, 845.46 yuan, 970.34 yuan and 945.05 yuan, respectively.
It is not difficult to find that the selling prices of the above three products continued to change during the reporting period, which shows that the production and sales situation of Xinlu Precision is also unstable.
According to the prospectus, the production and sales rates of the above-mentioned plastic modules are 95.75%, 106.8%, 96.84% and 99.66%, respectively; the production and sales rates of aluminum plates are 104.5%, 86.02%, 108.93% and 29.45%, respectively; the production and sales rates of precision tooling fixtures are 106.63%, 88.39%, 55.75% and 243.03%, respectively.
The comparison found that when the price of Xinlu precision products increased, the production and sales rate fell sharply, and when the price was reduced, it was increased again, and the company seemed to deliberately increase the price and reduce the price cycle, and the game of replenishing inventory and clearing inventory was year after year, which also led to the company's revenue being unstable and the profit prospects were difficult to predict.
Ninety percent of revenue comes from Apple and its industrial chain
According to the prospectus, Xinlu Precision's keycap production fixture overall solution is mainly used in Apple's laptop, and precision tooling fixture is mainly used for apple mobile phone frame full-process production. Therefore, Apple's laptop and smartphone products are currently the most important application areas of the company's products.
It is reported that since Apple began to independently develop keyboard modules in 2015, Xinlu Precision has actively laid out research and development, so as to successfully enter the Apple industry chain with the overall solution of keycap production fixtures, and then serve apple's full range of Macbook keyboards and keycap production of magic control keyboards and keyboard-type intelligent double-sided clips.
Specifically, during the reporting period, the sales revenue of Xinlu Precision to the top five customers was 162 million yuan, 112 million yuan, 232 million yuan and 96.6001 million yuan, accounting for 99.14%, 93.57%, 97.63% and 92.52% of the main business income, respectively.
Although sales to a single customer account for less than 50% of the company's total sales, Xinlu Precision's top five customers include Apple and its suppliers.
According to the prospectus, during the reporting period, the top five customers of Xinlu Precision were Apple, Jabil Group, Hibi Group and Jingyuan Computer.
Among them, Industrial Fulian and Jabil Group are the main foundries of Apple mobile phone frame processing and assembly, and Jingyuan Computer is the main supplier of Apple notebook keyboards and light guides.
This also led to the fact that during the reporting period, the revenue formed by xinlu precision products finally applied to Apple accounted for 99.39%, 92.17%, 95.93% and 88.90% of the main business income, which was the company's most important source of income, and the company had a serious dependence on the Apple industry chain.
Therefore, the main customers of Xinlu Precision are concentrated in Apple and its industrial chain, and due to the deep binding of Apple, xinlu precision has lost the motivation to open up other customers.
Xinlu Precision said that Apple, Samsung, Lenovo and other major laptop and smart phone brands occupy the world's main market share, the market concentration is high, to a certain extent, also determines the concentration of the company's customers; in addition, because the company's own operating scale is still small, so the business focus to large customers to quickly improve the scale of operation.
However, from the above situation, Xinlu Precision in addition to Apple machine supply chain manufacturers, there is no other form of scale customers, although embracing Apple has brought considerable performance to the company, but due to the weakness of consumer electronics in recent years, as well as the replacement of models, which also makes Xinlu Precision tortured.
Once Apple launches a new model, it means that the previous template is all scrapped, then it will have to start over, which can also be found in the company's fluctuating performance.
From the past luxun precision, Lens technology, Goertek shares and other apple senior industrial chain companies operating situation, although the binding apple can bring short-term rapid development, but if there is no other customer import, it will inevitably be eaten by Apple. It can be said that "the lessons of the past and the teachers of the future", if Xinlu Precision wants to go further in the capital market, it has to make more preparations.
(Proofreader/Li Zhengcao)