Huawei saved another man
Author: Yuntan, Editor: Xiao Shimei
For six consecutive days, the stock price rose to the limit, and OFILM, which was kicked out of the supply chain by Apple, relied on Huawei to survive.
As Cai Rongjun, the company's helmsman, said, OFILM is still "stubbornly alive."
【Rebirth】
After walking through the darkest moment, Cai Rongjun finally breathed a sigh of relief.
In September 2023, Huawei's Mate 60 Pro mobile phone equipped with the Kirin 9000s chip was born, which completely ignited the enthusiasm of the public, and the release of related products was "seconds and space". This sentiment also extends to the capital market, and Huawei's industry chain is thriving under the downturn in the market.
The industry expects that the cumulative sales of the Mate 60 series will exceed 25 million units this year. It is reported that Huawei has even set the shipment target of smartphones in 2024 at 60 million to 70 million units, knowing that in 2022, Huawei will only sell a total of 30 million units.
Such a huge boost is undoubtedly a huge benefit for suppliers. Yu Chengdong also said that the products of the pioneer plan are working overtime to produce.
As a long-term partner of Huawei, OFILM certainly benefits. Some research institutions pointed out that OFILM occupies most of Huawei's Mate60 series orders and some orders of P series, and the value share can reach 70%-80%. It can be said that OFILM is the absolute main supplier of Huawei's new camera modules.
For the supply of Huawei mobile phones, due to the confidentiality agreement, Cai Rongjun did not respond positively, but said: "Stubborn to live." "It seems that the clouds are light and the wind is light, but in fact, there is a feeling that the light boat has passed ten thousand heavy mountains.
Judging from the company's increase in production lines, the recruitment of a large number of workers in the factory, and the research of professional institutions, OFILM's main supply to Huawei is basically solid.
Like Huawei, Cai Rongjun is also looking forward to a U-shaped reversal.
On April 23, 2023, Cai Rongjun pointed out that after experiencing the lowest trough in 2022, the company has stabilized in 2023 and entered a new stage of development, and we must sound the "counterattack horn".
Binding Huawei, OFILM "came back to life", which also confirmed its technical strength. Moreover, due to the suppression of US technology, Huawei mobile phones use the domestic supply chain, and the related performance improvement will also have strong sustainability.
In terms of lenses, OFILM is deeply involved in Huawei's 6P-7P high-end lens project, and the next generation of 7P products has been sent samples to Huawei. Therefore, next year's new products, OFILM optical modules are likely to be the main supply.
Moreover, because consumer electronics are in a period of cycle adjustment, parts suppliers are greatly reshuffled, and after the withdrawal of weaker competitive enterprises, the position of the head enterprise will be more stable.
In addition, downstream demand is hot, the short-term supply of lenses and other modules is insufficient, and suppliers have also increased prices. An analysis report pointed out that at present, the price of related products of Huawei Mate 60 series under-screen optical fingerprint module suppliers has been raised by 15% to 20%, and some models have even increased prices by 30%.
Volume and price twins, the probability of OFILM's reversal has increased greatly. The capital market has taken the lead in reacting, and the company's stock price has risen for six consecutive days, and the market value has directly soared by 15 billion.
Cai Rongjun once again survived.
【Catastrophe】
After being kicked out by Apple, OFILM's performance plummeted.
In addition, since 2020, the company's major customer Huawei has fallen into a trough due to the suppression of the United States. In 2021, Huawei's shipments fell out of the top five in the world. Both clients suffered major changes, and Cai Rongjun ushered in the darkest moment of his life.
Once a star enterprise, instantly fell to the bottom, in the three years from 2020 to 2022, OFILM lost more than 9.7 billion yuan, plus the loss in the first half of this year, the total blood loss exceeded 10 billion.
▲OFILM's net profit over the years, source: flush
The secondary market avoided it, and OFILM's stock price slipped nearly 80% from its peak; You know, in the glory days of 2012-2013, its stock price rose more than 10 times. From 2012 to 2017, at its peak, the stock price rose by more than 21 times, and the market value exceeded 70 billion yuan.
With the rise and fall of stock prices, the wealth value of the Cai Rongjun family has also experienced a rollercoaster of ups and downs. Since 2014, after the company's performance has entered an upward trend, the wealth of the Cai family has swelled from 5 billion yuan to 17.2 billion yuan in 2018.
But since then, its wealth value has declined year after year, falling outside the 400 ranking, and it did not even enter the top 500 in 2022-2023.
▲Source: New Fortune magazine
Looking back on the past, the disasters encountered by Cai Rongjun and OFILM are inseparable from one company - Apple.
It can be said that the development process of OFILM has tasted the sweetness of "apple" and the bitterness of "apple".
Back in 2016, OFILM officially entered the "fruit chain" with Guangzhou Delta, which is mainly engaged in micro-camera modules and optical lenses, and became a camera supplier for Apple mobile phones.
Joining Apple's circle of friends, OFILM soared and became famous. From 2016 to August 2020, Apple contributed a large amount of revenue to OFILM. In 2019, Apple has become OFILM's second largest customer, contributing 11.698 billion yuan in revenue, accounting for 22.51% of the total revenue of the year; A year later, Apple surpassed Huawei to become the company's largest customer, contributing 14.512 billion yuan in revenue, accounting for 30% of its total revenue that year.
However, doing business with Apple is a "dangerous relationship", Apple not only through a strong position, forcing suppliers to improve product standards, reduce procurement prices, squeeze suppliers' profit margins; In a segment, cultivate multiple suppliers to prevent one from dominating. And Apple often changes suppliers suddenly, leaving the latter in a passive situation.
Therefore, the more dependent you are on Apple, the more dangerous it is. Sure enough, on September 1, 2020, Cai Rongjun received a "bad news": OFILM was kicked out by Apple.
The negative effects are immediately apparent. In that year, OFILM achieved revenue of 48.35 billion yuan, down 6.97% year-on-year, and made a profit of 510 million yuan in the previous year, and a direct loss of 1.945 billion yuan in this year. In the following two years, there were a series of huge losses.
Until the second quarter of this year, Cai Rongjun saw the dawn of turning losses into profits, and the company made a profit of 4.3921 million in the second quarter. With the release of Huawei's "5G" mobile phone, OFILM is also very likely to significantly reduce losses in the second half of the year and return to the track of upward growth.
【Alive】
With ups and downs, ups and downs, OFILM is probably one of the companies with the most hardships in the A-share market.
The update and iteration speed of the consumer electronics industry is extremely fast, and each generation of products will have new technologies and experiences, which is fatal for enterprises that fail to bet on the stroke and fail to lay out in advance.
In addition, over-reliance on a single large customer, especially enterprises in the Apple industry chain, such as Goertek and OFILM, are very hurt, and Cai Rongjun should have a deep understanding of this.
It can be said that "surviving" is a topic that industry participants must face, and it is also the main theme of Cai Rongjun's shopping mall battle.
Cai Rongjun graduated from the Department of Mechanical and Electrical Engineering of Shantou University, which Li Ka-shing donated to establish and Li Ka-shing has always been his idol. In 1995, after graduating from university, he joined Kodak Corporation in Japan, working his way from junior technician to core engineer. Therefore, Cai Rongjun is not only from a professional class, but also has a profound scientific research accumulation.
During this period, in 2001, Hong Kong Xunqi and Shenzhen Zhixiong Electronics jointly established OFILM, initially engaged in optical fiber communication precision thin film components.
In other words, Cai Rongjun is not the founder of OFILM. Later, OFILM invited Cai Rongjun and Cai Gaojiao brothers to serve as general managers and deputy general managers to help the company's research and development.
In September 2004, the original shareholders transferred their controlling stake to the Cai brothers for 4.39 million yuan, and OFILM officially entered the era of Cai Rongjun.
The Cai brothers are familiar with optoelectronic technology, and two years later, OFILM launched infrared filters, ranking first in the world in this market segment, occupying one-third of the global market share. With this advantage, OFILM was successfully listed on the Shenzhen Stock Exchange in August 2010.
But in the first year of listing, Cai Rongjun smelled the crisis, and the company's revenue increased sharply that year, but its net profit remained stagnant. He is soberly aware that the original business is approaching the ceiling, and there is not much room for growth.
At that time, Apple led the boom of touch-screen smartphones, and Cai Rongjun was keenly aware of the huge opportunity in the mobile consumer electronics industry and invested all the funds raised by the IPO into the touch field.
The battle was a great success, and Cai Rongjun led the company to surpass TPK and become the world's largest touch screen manufacturer. After a brief hibernation in 2011, OFILM's performance shined from 2012 to 2014, with revenue and net profit like a rocket, and its stock price soared more than 10 times in just two years from 2012 to 2013. OFILM has since become an important supplier to the consumer electronics industry.
But the only constant in the high-tech industry is the "change" itself. Since then, Apple and Samsung have adopted different touch screen solutions, and the industry reshuffle has intensified. In 2015, OFILM's profits fell again, the old business touch screens were squeezed into the low-end market, the profits became thinner and thinner, and the new business did not improve.
At this time, OFILM, "internal and external difficulties, green and yellow."
At this time, the micro-camera project in which Cai Rongjun intervened in 2012 provoked the beam. With the gradual improvement of consumers' requirements for mobile phone photography and videography, the whole machine manufacturers have correspondingly raised the order volume and technical requirements of cameras, and Cai Rongjun, who laid out in advance, once again stepped on the wind. At the same time, Cai Rongjun also decided to enter the field of fingerprint recognition.
After the trough period in 2015, the company's performance stood at the second peak in 2016-2017, achieving net profits of 719 million and 823 million respectively. The stock price also soared to an all-time peak in November 2017.
However, in 2018, due to excessive investment expenditure, poor management, and stepping on LeEco and Gionee, the company's inventory was impaired and lost more than 500 million yuan, which exposed OFILM's internal control problems after years of rapid growth.
Assessing the situation and learning from failure is an important sign of maturity for entrepreneurs. Mr. Cai said he focused more on failures than on success stories.
The first blow in 2018 made him sink his heart into the internal management reform of OFILM to "create results with refinement". This year, the company successfully turned around its losses.
But the later story, unexpectedly, Apple tore up the cooperation agreement, which allowed Cai Rongjun to see the cruelty and cold-bloodedness of business competition. OFILM fell from the top to the quagmire, and was even used as a negative teaching material by the outside world, frequently criticizing it.
But as he said: life is about repeated adversity, no one can hide from it, it will come. Adversity, which may seem terrible, is the source of success. In the face of adversity, all we have to do is face it, accept it, and then resolve it.
At present, Huawei has been reborn from adversity, OFILM also has the confidence to survive, and the company has increased its horsepower and sounded the clarion call for counteroffensive.
Don't forget, as early as the trough of 2015, Cai Rongjun also preemptively set foot in the field of Internet of Vehicles, raising 1.37 billion yuan the following year to strengthen the research and development of automotive lenses and seize the automotive intelligent business. In the first half of this year, smart car products contributed 616 million yuan in revenue, accounting for nearly 10%.
▲OFILM's revenue structure, source: flush
"There is no winter that is insurmountable, and there is no spring that will not come. Everything will pass, everything will come. "Cai Rongjun has been looking forward to spring.
From infrared cut filters to touch screens, to microcameras and fingerprint recognition, to automotive electronics, OFILM technology keeps "tossing", even in the face of difficulties, Cai Rongjun has not stopped betting on the future.
OFILM's development process is the history of the rise and fall of the consumer electronics industry, but in the trough, Cai Rongjun concentrated on the layout of forward-looking technology, and finally ushered in the moment of Jedi counterattack.
If it were not for years of technology accumulation, this "luck" would not have fallen on OFILM's bald head.
disclaimer
This article deals with the content of listed companies, and is a personal analysis and judgment made by the author based on the information publicly disclosed by listed companies in accordance with their statutory obligations (including but not limited to interim announcements, periodic reports and official interactive platforms, etc.); The information or opinions contained herein do not constitute any investment or other business advice, and Market Cap Watch assumes no responsibility for any action resulting from the adoption of this article.
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