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In 2015, Lens Technology (300433) went public, and the female boss behind it, Zhou Qunfei, became the new "richest woman" in the mainland with a wealth of 50 billion yuan.
Behind Boss Zhou, there is also a widely circulated "inspirational" story.
Born in a small mountain village, Boss Zhou dropped out of school at the age of 15 to work in a watch glass processing factory in Shenzhen. The Internet has been the boss's primary third, second boss lady, boss lady. Soon after doing the main room, she persuaded her husband to open a new company for her. Soon after its establishment, it dug up the vast majority of the middle and high-level of the original factory, and all customers. Then, divorced her husband and ran it alone. After that, the ex-husband's processing plant deteriorated, and Boss Zhou's company developed into today's Lens Technology.
The story doesn't end there. It is said that the factory Aoya Optics of the former husband Yang Dada was later taken over by his younger brother Yang Jianwen, and gradually developed and grew, becoming the nemesis of today's Lens Technology - Bourne Optics.
The above story comes from the Internet, and it is not excluded that there are ingredients that add oil and vinegar, and it is difficult to distinguish between true and false. It can be confirmed that Boss Zhou did work in her ex-husband's Aoya Optics. Nowadays, Lens Technology and Bern Optics are indeed competitors with each other, and the two tigers are competing with each other.
Bern Optics is also seeking to be listed, and recently submitted a Prospectus to the Hong Kong Stock Exchange. The enmity between Boss Zhou and the Yang family may continue to be staged in the capital market.
First, the company that grew up eating apples
Lance and Bourne, in addition to their historical grievances, have a common identity, that is, they are both a link in the fruit chain, mainly for apple companies to produce glass covers.
It's no exaggeration to say that both companies grew up eating apples.
1 At the same time into the fruit chain, Lens deeply bundled apples
In 2007, Apple launched a smartphone, revolutionizing Nokia's life. In the same year, Lance and Bourne established a partnership with Apple.
However, although the same period into the fruit chain, but today, the two have come out of a big gap.
According to lens technology's 2021 annual report, Apple, as its largest customer, has annual sales of up to 30 billion yuan, accounting for 66.49% of total sales.
According to the Bourne Optics prospectus, in the half year from April to September 2021, Apple was also the largest customer of Bourne, accounting for 59.5% of revenue. However, half-year sales are probably less than HK$9 billion, and it is estimated that for the whole year, it is less than HK$20 billion. Compared with Lens Technology, it is at least 1/3 worse.
Source: Publicly Available Data
Lance and Bourne started roughly the same way. But from the perspective of the binding of the relationship with Apple, today, Lens has become better.
2 Large-scale mergers and acquisitions, in vain to increase revenue is not profitable
However, from the internal point of view of Lens Technology, in order to further deeply bundle with Apple, Lens Technology has also paid a considerable price.
The key step for Lens to shake off Bourne is the acquisition of Kesheng Technology and Keli Technology at the end of 2020. The two Taizhou plants, which specialize in the production of metal enclosures for Apple, combined sales of about 8.2 billion yuan in 2019. It can be seen that Lens's Apple business is tens of billions more than Bourne, most of which is contributed by these two factories.
With this acquisition, Lens not only stabilized the basic disk of Apple, but also extended from the glass cover to the metal casing, bringing incremental space.
However, the performance of the sudden change of face means that it may not be so optimistic.
Source: Lens Technology 2021 Annual Report
In 2021, Lens Precision, which was integrated by the Taizhou factory, did contribute tens of billions of revenues, but the operating profit lost 460 million. The first answer sheet handed over after the Taizhou factory merged with the table can not help but make people wonder whether Lance bought back an opportunity or a burden.
In order to buy these two factories, Lens Technology spent 9.4 billion yuan, and finally formed a goodwill of 2.97 billion, which is still hanging in the financial report.
Second, expand customers, the task is heavy and long
In summary, Lens Technology and Bourne Optics are both relying on Apple and rising. In this regard, Lens clearly prevails. Because Lens tied Apple more deeply.
However, relying too much on a single large customer will inevitably have no small risk, even if this customer is Apple.
1 Relying on apples is an opportunity and a risk
First of all, with the experience of OFILM (002456), it is not impossible to remove the fruit chain. In particular, the glass cover plate produced by Lens and Bourne is not a product with high technical barriers.
Second, even if the relationship with Apple is stable, the performance may not be stable. For example, in 2021, the global lack of core limits the amount of Apple, which also limits the market demand of Lens and Bourne. At the same time, the superimposed cost increase, in the last two quarters, Lens Technology lost 1.6 billion yuan in a row.
Third, in the fruit chain, suppliers are always at a disadvantage. According to the Bourne prospectus, its cooperation model with Apple is to arrange production based on Apple's rolling forecast of orders. Rolling forecasts are not binding, and Apple will not provide them with long-term commitments. This means that once a risk event occurs, it will be borne by the enterprise.
Source: Bern Optics Prospectus
2 Expand customers, the task is long
To break this dilemma, both Lens and Bourne must and must strive to expand other major customers.
However, in addition to Apple, the scale of several other major customers of Lens is not too high, and the total sales account for only 14%.
In contrast, Bourne's customer structure is better. The second largest customer, Samsung, accounted for 15% of sales, and its half-year sales were similar to those of Lens throughout the year.
Source: Flush-Lens Technology 2021 annual data (left), Bern Optics (right)
However, judging from past data, Bourne's customer relationship seems to be unstable. From time to time, large customers withdraw from the top five. In addition, the sales scale of Bourne and Samsung has also shown a downward trend.
Overall, at present, Lens Technology and Bourne Optics, although they have mastered some brand customer resources, but they still have a long way to go to break the situation of relying on Apple.
Third, the product extension, the demand is limited
Even if Lens and Bourne can get rid of the situation of relying heavily on a single customer, they will face a fundamental problem, that is, the consumer electronics, especially the smartphone market is saturated, and terminal growth has long been weak.
For the smart device appearance products (such as glass covers and metal cases) produced by Lens and Bourne, the application scenarios with future growth potential are mainly automobiles, VR/AR, smart homes, etc.
At present, the product lines of Lens and Bourne have also expanded into these emerging areas. But the scale is not large. The most critical thing is that from the perspective of the overall scale of the industry, VR/AR and smart home application scenarios account for only 0.1%, and cars account for only 5.3%.
What concept? In 2020, the market for appearance products applied to smartphones is about $17.1 billion, while the car is only $1.3 billion, and other application scenarios are about $2 billion.
This means that even if these emerging areas can maintain rapid growth in the future, it is difficult to hedge the risk of slowing, stagnating, or even shrinking the mobile phone market.
On November 4, 2021, Lens Technology announced the establishment of a new subsidiary to enter the field of photovoltaic module glass. Since then, in addition to consumer electronics and automobiles, a third road has been opened. At present, photovoltaic prospects are broad. However, Lens's business is still in its infancy, and whether it can occupy a place in the future is still unknown.
The price of product extension is that both fixed asset investment and research and development investment will face substantial growth. Perhaps, this is also the original intention of Bern Optics to urgently seek listing at the moment.
Today, Lens and Bourne must have no time to take care of the historical grudges. The main business is not easy, and it is even more difficult to expand the business. How to give investors a satisfactory answer sheet is the key.
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.