OFILM: Apple "abandons its son", and it is difficult to be reborn by holding hands with Huawei
On the evening of October 15, OFILM (002456. SZ) issued an announcement that from September 28 to October 13, the company's stock price deviated greatly from the Shenzhen Composite Index in the same period, and was higher than the same period of growth of companies in the same industry, please fully understand the secondary market trading risks.
However, investors do not seem to be "cold" by the company's "cooling" announcement. Today, the company's stock opened high and low, and rose again at the end of the day, as of the close of trading on the 10th and 16th, the company's stock price closed at 10.6 yuan, up 2.91%, with a total market value of 34.5 billion yuan.
Titanium media APP found that the company's recent surge in stock is mainly related to the news that "OFILM camera modules have entered the supply chain of Huawei mobile phone Mate 60 series", and in fact, the company's cooperative relationship with Huawei has long been established. However, the increase brought by the company to Huawei may not restore the company's glory. In addition, after the company lost Apple, it tried to transform from a business, but the process was difficult.
Partnering with Huawei
How deep?
Recently, Huawei Mate 60 is undoubtedly one of the most popular mobile phone series, not only creating a "far ahead" "explosive terrier", but also sales have indeed shown a rising trend. It is understood that Huawei has set the target of smartphone shipments in 2024 at 60 million units - 70 million units, more than double the target in 2022.
However, a mobile phone involves thousands of upstream suppliers, among which the most valuable components are mainly motherboards, screens and lens modules. It is reported that the company's camera modules are all involved in the supply of Huawei Mate60 series, accounting for the vast majority of the share. Including rear camera, front camera, fingerprint module, the value of a single unit is 500 yuan - 600 yuan.
In addition, the market has recently been rumored that the company has added production lines to its Nanchang factory and recruited thousands of workers. Is the above news true? Although the company did not affirm it in the announcement, it did not deny it.
In fact, historically, Huawei began working closely with the company many years ago.
It is reported that in 2019, at the CBG Supplier Quality Conference held by Huawei, the company became the only winning company in the "Quality Excellence Award" in the biometric field; At that time, the company was already one of the main suppliers of components such as camera modules and under-screen fingerprints of Huawei's flagship models. According to relevant data, the company's top three customers that year were Huawei, Apple and Xiaomi, accounting for 31.16%, 22.51% and 19% of sales.
In addition, the company also mentioned in response to the inquiry letter of the Shenzhen Stock Exchange for its 2021 annual report that due to the great changes in the international trade environment, the smartphone business of the company's H customer was subject to restrictions such as chip supply cuts, resulting in a year-on-year decrease in sales revenue of 8.337 billion yuan for this customer, and the H customer is most likely Huawei.
Even in 2021-2022, when Huawei's sales of mobile phones fell sharply due to the interruption of supply, the cooperation between the two sides was not interrupted. It is reported that the suppliers behind Huawei's Mate/P 40 and 50 series are all company's figures.
It will take time to turn over
How much increment can the explosion of Huawei mobile phones bring to the company?
Some institutions predict that in 2023, Huawei Mate 60 series mobile phone shipments will be about 20 million units. According to the calculation of 500 yuan per unit, Huawei's mobile phone business is expected to bring 10 billion yuan of revenue to camera module suppliers. In addition, Huawei's smartphone shipments in 2024 target are 60 million to 70 million units. Also calculated according to a single unit of 500 yuan, it is expected to bring 30 billion yuan to 35 billion yuan of revenue to camera module suppliers.
From this point of view, the company is holding hands with Huawei to restore its former glory? The answer is full of unknowns.
First of all, from the perspective of volume, although Huawei is not small, there is a big gap between the two compared with Apple. Previously, analyst Guo Mingxi predicted that Apple's latest iPhone shipment target in 2024 was 250 million units. If you look at it from this point of view, Huawei is more to help the company recover some orders, but it is still difficult to replace Apple's importance to the company.
Second, in essence, the company is still not out of the dilemma of being an upstream supplier — its services are simply moving from Apple to Huawei. As a leading domestic mobile phone manufacturer, Huawei also has high requirements for the supply chain. In recent years, the company has been affected by "off-chain", and the performance has been a huge loss for several consecutive years, under the pressure of performance, the company's R&D expenditure in recent years has also decreased significantly, with R&D expenses of 1.273 billion yuan in 2022, and R&D expenses as high as 2.043 billion yuan in 2018.
Finally, the company's dependence on large customers still exists, and there is still a lot of uncertainty. Financial data shows that in 2022, the company's top five customers accounted for a total of more than 69% of sales.
It is worth noting that compared with the previous two years, the global smartphone industry is now down. According to TrendForce consulting research, global smartphone production in the first half of 2023 was 520 million, a decline of 13.3% compared with the same period last year, setting a record low in ten years.
transformation
difficult
difficult
As early as 2014, in the early stage of domestic intelligent vehicles, the company established a dual-drive strategy of "mobile Internet + smart city". In 2015, it acquired Nanjing Tianqing and East China Automobile, and officially entered the field of intelligent vehicles. In 2018, the company acquired Fujifilm Tianjin Lens Factory to strengthen its presence in the automotive lens circuit.
Although the company started early, it started late. From 2015 to 2020, the company has been focusing on mobile phone business, and has not devoted too many resources to smart car related business. The revenue of smart car-related business only remained within 500 million yuan.
Although there has been an acceleration trend in the past two years, the performance growth has not been reflected in earnings. As of the end of June 2022, the company's smart car business achieved revenue of 596 million yuan, exceeding the sum of the total revenue of the business in 2020, an increase of 183 million yuan over the same period in 2021, a year-on-year increase of 44.31%. In contrast, the gross profit of the company's smart car business has been declining in the face of revenue growth, which was 61 million yuan in the first half of 2021 and only 34 million yuan in the first half of 2022.
The above situation is reflected in the gross profit margin, which has decreased from 23.96% in 2017 to 1.48% in 2021. This means that the company's smart car business is experiencing the problem of increasing revenue without increasing profits.
After careful study, it is found that although the smart car track is vast, it is not easy for the company to smoothly transform "surrounded by wolves".
On the other hand, in the face of the original track players with good strength, it is difficult for the company to have an advantage. Generally speaking, the industry is highly competitive, and there is a high probability that technology is needed to speak. However, the technical aspects of the company may be inadequate. After all, one of the reasons why the company was kicked out of the fruit chain that year was that its lens module technology was not up to standard.
In addition, losses in the past few consecutive years and business declines have put financial pressure on the company to develop new businesses. As of the end of the first half of this year, the company's net operating cash outflow was 105 million yuan, and the asset-liability ratio was 79.79%, reaching a new high since listing. At the same time, the company's monetary funds are 2.699 billion yuan, the balance of short-term borrowings is 2.648 billion yuan, and the non-current liabilities due within one year are 3.314 billion yuan, which has certain debt repayment pressure. (This article was first published on Titanium Media App, author|Zhai Zhichao)