Huiding Technology: The diversification strategy is gradually taking effect, and the new growth engine is accelerating

Recently, huiding released the 2021 and first quarter of this year's financial reports, showing that its revenue and net profit have declined to varying degrees. On April 27, at the investor exchange meeting of Huiding's 2021 and 2022 first quarter financial report disclosure, Zhang Fan, chairman and CEO of Huiting, said that although we are facing short-term difficulties, the company continues to exert efforts in intelligent terminals, IoT, automotive electronics and other new markets, and has great confidence in the annual performance.

Zhang Fan, Chairman and CEO of Huiding

Today's Huiding is on the eve of harvesting results, its diversified strategic layout has been effective, and it is only a matter of time before it returns to a state of rapid growth.

Diversified product lines are beginning to show results

The revenue structure is more balanced

According to the financial report, Huiding achieved operating income of 5.713 billion yuan in 2021, a year-on-year decrease of 974 million yuan, down 14.57%, and a net profit of 860 million yuan, down 48.17% year-on-year. In the first quarter of 2022, Huiding achieved revenue of 874 million yuan, down 38.39% year-on-year, and a net profit loss of 50.51 million yuan, down 132% year-on-year.

In this regard, Huiding said that this is mainly because the company's current revenue is more dependent on a small number of products and mobile phone market, and the mobile phone market shipments show a downward trend, coupled with the rapid development of technology in the early years, which affects the company's revenue.

Zhang Fan pointed out that in the past, Huiding relied too much on a single mobile phone market, and the product strategy mainly attacked a few products in the single market, so after the listing of Huiding, the company increased its efforts to invest in new product development and expanded more business scope horizontally. At present, Huiding is in the stage of not having a complete smooth connection between new products and traditional products, although new products gradually contribute, the proportion of revenue is rising, but in fact, the performance of sales is not enough, so it is manifested as an increase in expenses and a decline in revenue.

Even so, Huiding is still resisting multiple pressures such as the epidemic and supply chain capacity, actively expanding new businesses, and its product structure is also changing in a more balanced direction. In 2021, Huiding fingerprint chips accounted for 63.52% of the main business income, a decrease of 12.08 percentage points over the same period of the previous year; touch chips accounted for 20.24% of the main business income, an increase of 4.13 percentage points over the same period of the previous year, and the proportion of other chips rose to 16.24%, an increase of 7.95 percentage points year-on-year.

At the same time, the application market of Huiding has gradually expanded from the mobile phone field to new market areas such as PCs, wearables, IoT, automobiles, etc., while developing diversified target markets, it has also expanded more application scenarios and actively explored the international market, and in 2021, overseas revenue continued to grow, accounting for 37.21%, an increase of 17.19 percentage points year-on-year.

Huiding existing technology

Apply the upgrade to the field of automotive electronics

Facing the strategic layout of sustainable development in the future, The total R&D investment of Huiding in 2021 is 1.982 billion yuan, an increase of 228 million yuan year-on-year, an increase of 13.01%, and the continuous high R&D investment has laid a solid foundation for broadening technology and market coverage.

"Most of our current R&D investment is focused on new technologies and new products that have little or no revenue contribution." Zhang Fan said that the current profit into the future long-term growth of the driving force, and constantly expand new business, new areas, new markets, when the ability and product portfolio is established, the future to seize new changes, new opportunities, the company will be in a completely different level of ability.

At present, the overall market for smartphones will not grow significantly in the future, and it is normal to maintain the existing scale and even slightly decline. Therefore, in order to continue to grow in the mobile phone market, Huiding can no longer rely on a single product, but also expand more new product applications in the field of smart phones, and build a richer and more diversified product category.

In addition to the smartphone field, Huiting has other target markets. As more and more mobile phone terminal manufacturers have made efforts in the field of smart cars, Huiting has also begun to invest in this field.

"The next decade of the car is a new growth point, the car is like a "large mobile phone", there are many common needs, Huiting plans to upgrade the existing technology to the field of automotive electronics, in order to seize more opportunities." Huiting executives said that in the face of different market needs, Huiting must go hand in hand, such as automotive, industrial control, etc., Huiting has accumulated a lot of technology, but also is developing more innovative product portfolios.

Specifically, the Top touch chip is fully in line with the transformation of the increase in the number of electric vehicle screens, in 2021, the shipment of touch chips has grown very rapidly, and it has successfully introduced domestic, joint venture brands and new energy brand customers, and its new generation of vehicle-grade touch chips has the characteristics of supporting large size, excellent immunity and rapid response, achieving full coverage from 7 to 30+ inch screens, and supporting various aspect ratio screens.

In terms of audio, Huiding has made some breakthroughs in vehicle customers, and the audio algorithm is also very competitive, which can provide customers with a better experience in terms of noise elimination, speech recognition, and voice communication.

In the automotive field, there are more and more products developed by Huiting, such as Bluetooth chips and NFC, which have plans to accelerate the launch of vehicle-grade products, and on-board audio amplifiers are also under development, when these products come out one after another, Huiting will become a more influential player in the field of automotive electronics.

Security chips are about to be mass-produced!

A new growth engine emerges

Recently, the security product development of Huiding intelligent terminals has made breakthroughs, the first eSE chip passed the CC EAL5+ certification, the first NFC chip passed the certification of the NFC Forum, the two chips that have obtained the industry's highest safety certification will be mass-produced this year, and Huiting is also accelerating its commercial application process.

Huiding said that the company has been laying out the four core capabilities of sensing, computing, connectivity and security, and security chips and NFC chips belong to the security category, which will promote new security applications on digital mobile terminals, such as digital ID cards, digital currencies and other products that require absolutely reliable security. On the other hand, to have a very good user experience, Huiding hopes to help consumers enjoy a more convenient and safer experience in their daily lives and travel. "We hope that our security products will achieve rapid revenue growth, create more cooperation opportunities with mobile phone and mobile terminal customers, and help us achieve performance growth in the mobile terminal field." In addition, this technology can also be expanded to the automotive market. ”

In other product innovations, Huiding has also made great progress, and a new growth curve has begun to appear. According to Zhang Fan, in terms of audio products, after Huiting acquired NXP's VAS business, the market share of audio products continued to increase. In 2022, in addition to launching a new generation of low-power audio power amplifiers for the mobile phone market, Huiting is also developing medium- and high-power audio power amplifier products for home audio, including products for the automotive market.

In terms of connecting products, Huiding's BLE products exceeded the shipment of tens of millions of pieces for the first time in 2021. Its Bluetooth products are more widely used, in the wearable market, Huiding's TWS Bluetooth products are very competitive, but some changes in specifications and customer requirements have led to mass production delays, and the opportunity to put into mass production this year is very large; in the smart watch market, Huiding has core technologies and products such as heart rate sensors, Bluetooth, eSE, NFC, etc., which can help customers develop small size, low power consumption, cheap cost, and comprehensive competitive products.

In traditional products, the performance of touch products is increasing, and the technology continues to lead. Touch chips for folding screen mobile phones have been mass-produced on customer products, and a new generation of products is also under development; vehicle-grade touch products have also shown rapid growth. "At present, fingerprint recognition products that are under pressure, Huiting Technology is carrying out new biometric technology and product development, and I believe that it will not take too much time to have new products on the market, bringing new growth momentum to the old product line." Zhang Fan pointed out.

Through continuous research and development, Huiting Technology said that it currently has five major categories of sensing products, touch products, connection products, audio products, and security products, and in 2022, Huiding will continue to focus on the core technologies of "sensing, computing, connection, and security" to build diversified technical capabilities, form a richer and more diversified product line, and promote the maturity of the new growth engine.

End

Author: Liu Qicheng Zhu Wenfeng

Editor-in-Charge/Layout: Fan Fan

Review: Shen Qing

Producer: Liu Qicheng

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