Special correspondent: Sun Yi
Editor: Chen Feiyi
Some people resigned and returned to their hometowns, and some people went to the examination hall at night.
"Outdoor Sports First" Pathfinder (300005. SZ) former actual controller Sheng Faqiang and Wang Jing started a business in the 1990s to create an outdoor sports domestic brand "Pathfinder TOREAD", but as the company's performance deteriorated, ShengFaQiang and Wang Jing chose to quit. Li Ming, the new actual controller of Pathfinder, has a background in the integrated circuit (chip) industry, and from the perspective of the newly reorganized management, Li Ming intends to build an investment incubation platform for the chip industry.
Pathfinder is planning to acquire 60% of the equity of Beijing Core Energy for 260 million yuan and cross-border into the LED chip industry.
Chips are the capital market point in the past two years, but investors are waiting and seeing whether Pathfinder can successfully transform. After the news of the cross-border acquisition was announced, Pathfinder's stock price has fallen for three consecutive days, with a cumulative decline of 14%.
<h3>Don't think ahead</h3>
From the financial data of the first half of 2021, more than 80% of Pathfinder's revenue comes from outdoor clothing, and the rest is outdoor shoes. The company's product line is divided into outdoor explorers, outdoor travelers, outdoor artists, small detectives, TOREAD. X。
Pathfinder was listed in 2009 and was one of the first listed companies on the Growth Enterprise Market (GEM). In the first few years of listing, the company's main business revenue has maintained rapid growth, and after 2015, with the overall growth of the domestic outdoor products industry slowing down, fierce market competition and other factors, the company's main business sales performance has been sluggish. According to COCA's "China Outdoor Products 2019 Annual Market Survey Report", the growth of China's outdoor products market has slowed down significantly since 2015, with total retail sales only growing from 22.19 billion yuan to 25.02 billion yuan in 2019, with a compound annual growth rate of 3.1%, and the number of outdoor brands falling from 507 to 492.
From the perspective of A-share outdoor products listed companies, Sanfu Outdoor (002780. SZ), MuGaodi (603908. SH), Pathfinder's compound growth in operating income and net profit in the past three years is not ideal; only Zhejiang Natural (605080. SH) has benefited from OEM for international brands such as Decathlon, and its performance has continued to grow.
Pathfinder's other businesses around the outdoor business have also not improved. In the first half of 2021, most of the subsidiaries of the surrounding industries were insolvent or in a state of loss, of which the net assets of Beijing Shouwang Lutu Company, which operated outdoor culture and sports, were -21.21 million yuan, the new starting point of Tianjin, which operated and invested, Beijing Pathfinder Ice and Snow Holdings, which operated skiing, Yingtan, which operated sports investment, and Tong sports, lost 1.39 million yuan, 240,000 yuan and 0.02 million yuan respectively.
Moreover, in recent years, Pathfinder has been shrinking its main business investments. In 2016, Pathfinder raised 1.27 billion yuan in non-public issuance of shares, the main investment projects included pathfinder cloud project 517 million yuan, Lvye outdoor travel O2O project 199 million yuan, outdoor products vertical e-commerce project 187 million yuan, outdoor safety platform project 178 million yuan. In 2017, Pathfinder changed the purpose of the fundraising project and terminated part of the fundraising project investment (the total fundraising investment was 560 million yuan). As of the end of June 2021, Pathfinder's five-year-old funds have been used in a total of 710 million yuan, and there are still 540 million yuan of unused funds raised.
Judging from the financial statements, pathfinder idle funds are large. At the end of June 2021, the company's monetary funds were as high as 721 million yuan, and the monetary funds were basically unrestricted free funds, with a restricted amount of less than one million yuan; in addition, the transactional financial assets formed by the purchase of bank wealth management products were 561 million yuan. That said, Pathfinder has more than 1.2 billion idle funds on its books. In addition, the company has maintained extremely low financial leverage, and the asset-liability ratio has remained below 15% in the past three years, only 12% at the end of June 2021, while capital investment (including fixed assets and long-term equity investment) is in continuous contraction.
<h3>Can turning around chip investment be successful? </h3>
The management team, with the original actual controllers Sheng Faqiang and Wang Jing as the core, finally withdrew in early 2021. In February 2021, Shengfa Qiang and Wang Jing signed the Share Transfer Agreement with Beijing Tongyu Zhonghe Science and Technology Development Center, transferring 51.69 million shares to Tongyu Zhonghe and 44.18 million shares to Tongyu Zhonghe, Yingkai Enterprise, the controlling shareholder of the company was changed to Tongyu Zhonghe, and the actual controller was changed to Li Ming.
According to the data of Tianyancha, Tongyu Zhonghe is a semiconductor investment platform, and the shareholders penetrate upwards mainly for the Beijing Integrated Circuit Cutting-edge Chip Equity Investment Center (Limited Partnership), which mainly focuses on the investment in the design of high-end and special chips of integrated circuits. Li Ming served as the chairman of Tsinghua Unigroup and Guoyan Technology, and the new senior management team of Pathfinder is mainly from these two companies. Tsinghua Unigroup is a listed company in the semiconductor industry under Tsinghua Unigroup, focusing on the design and development of integrated circuit chips.
Obviously, Li Ming took a controlling stake in Pathfinder and reorganized the management, with the intention of creating an investment and incubation platform for the chip industry. The acquisition of a 60% stake in Beijing Chip is the first step.
Integrated circuit (chip) industry is mainly divided into design, production, packaging three links, Beijing Core Energy (including subsidiary SI) the current business mainly for LED chip R & D and production enterprises to provide design and technical services, the future main business transformation into LED chip independent research and development and packaging.
Judging from the data disclosed by Pathfinder, Beijing Core energy's current design and technical service business is in a state of contraction. Beijing Xinneng's net assets decreased from 34.18 million yuan in 2019 to 15.4 million yuan in May 2021, and its operating income fell from 7.19 million yuan in 2019 to 2.09 million yuan in 2020. In addition, Beijing Core energy has continued to lose money since last year, with a loss of 5.13 million yuan in the first five months of this year.
The two types of businesses that Beijing Core energy will transform in the future are also in the early stages. Mini LED driver chip and packaging module products completed research and development, in the product tape-out and verification link, verification customers include Samsung, LG, China TCL, Hisense, Jufei Technology, etc.; Micro LED chips are making slower progress and are still in research and development.
In fact, the Mini LED, Micro LED chip industry has been involved in many listed companies, especially the Mini LED chip terminal technology tends to mature, the application bottleneck is mainly in the cost. From Sanan Optoelectronics (600703. SH), HC Semitek (300323. SZ), Dry Photoelectric (300102. SZ) three listed companies in the same industry, LED chip design, production, packaging and testing business growth in recent years is mostly not ideal, profitability is also in decline. Sanan Optoelectronics' LED business revenue shrank from 6.73 billion yuan in 2018 to 5.97 billion yuan in 2020, and gross profit margin also fell from 44.7% to 24.5%. HC Semitek's revenue scale and gross profit margin have also shrunk.
In addition, there are great differences between the LED chip design package and the original outdoor products of Pathfinder in terms of channels, customers, suppliers, etc., and it is difficult to play a synergistic effect. The pathfinder all-cash acquisition needs to rely on performance compensation clauses to restrain counterparties, and the compensation clause is relatively relaxed, and only 109 million yuan of pathfinder shares need to be purchased after the compensation obligation is triggered, and this can be used as the maximum to compensate.
It is worth noting that in the vote on the takeover proposal, Wang Yue, an independent director of Pathfinder, abstained on the grounds that "the realizability of future earnings cannot be accurately judged".
To some extent, the continuous decline in Pathfinder's stock price in the last three trading days shows that market investors are also "unable to accurately judge".