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On the evening of December 19, Dongfang Materials announced that the company intends to reach a settlement with Nokia Solutions and Networks GmbH & Co.KG (hereinafter referred to as Nokia) on the acquisition of 51% of the shares of TDTECH HOLDING LIMITED (referred to as TD TECH) and terminate the transaction, and the 2.1 billion acquisition case that lasted for 8 months has finally come to an end. In addition, both parties withdraw, waive and release all claims, rights and demands of the other party arising from this transaction.
The core reason for the termination of this transaction is that Huawei, the remaining 49% equity holder of TD TECH, refuses to jointly venture with Dongfang Materials to TD TECH, and according to the equity transfer agreement signed between Dongfang Materials and Nokia, if the agreement cannot be completed due to Dongfang Materials, Dongfang Materials needs to pay Nokia a termination fee of 29 million yuan to 84.864 million yuan.
The acquisition was met with strong opposition from Huawei. Late at night on the day of the disclosure announcement of Oriental Materials, Huawei officially issued a statement saying: "Our company does not have any intention or possibility to operate TD TECH as a joint venture with New Oriental New Materials, and our company is evaluating the relevant situation and has the right to take follow-up measures, including but not limited to the withdrawal of all shares and the termination of the relevant technology authorization to TD TECH and its subsidiaries." ”
As a company mainly engaged in the ink materials business, Dongfang Materials is under great profit pressure in the macro environment of rising international crude oil prices and high raw material prices. Therefore, the company needs to find the direction of business development, find new profit growth points, and the communication industry is the hope direction of the new increase in Oriental Materials, which previously wanted to form a business model of "ink + communication" through the acquisition of TD TECH, but unfortunately ended.
-- The current situation of the operation of the communications industry
According to the "2021 Communications Industry Statistical Bulletin" released by the Ministry of Industry and Information Technology, the mainland's communications industry maintained a stable and positive operation trend in 2021, and the revenue of telecommunications services increased steadily, with a total of 1.47 trillion yuan, an increase of 8.0% over 2020. According to the constant unit price of the previous year, the total volume of telecommunication services for the whole year grew rapidly, reaching 1.7 trillion yuan, an increase of 27.8% over 2020.
According to the Statistical Yearbook of China's Electronic Information Industry, the operating income of the communication equipment manufacturing industry above designated size continued to grow from 2014 to 2019. According to the Ministry of Industry and Information Technology, in 2020, the operating income of the communication equipment manufacturing industry increased by 4.7% year-on-year, and the operating income of the communication equipment manufacturing industry is initially estimated to reach 3,972.9 billion yuan.
From 2016 to 2020, the retail operating income of communication equipment in China showed a fluctuating and increasing trend, with a compound annual growth rate of 2.01%; In 2020, affected by the epidemic, the growth rate of operating income slowed down. In 2020, the retail operating income of communication equipment in China reached 136.35 billion yuan, a year-on-year increase of 0.78%. In the face of the drastic changes in the internal and external environment and a new round of communication technology changes, the mainland communication equipment industry in the existing product integration and innovation and low-cost research and development on the basis of maintaining the comparative advantages of existing product integration and innovation, it is urgent to grasp the new situation and new opportunities of industrial integration and development, strengthen the horizontal cooperation and vertical integration of the industry, in order to continue to expand the market scale.
-- Emerging businesses have become the main driving force for the growth of the communications industry
According to the 2022 Communications Industry Statistical Bulletin, in 2022, the cumulative revenue of telecommunications services reached 1.58 trillion yuan, an increase of 8% over the previous year. Among them, emerging businesses such as data centers, cloud computing, big data, and the Internet of Things (IoT) developed rapidly, with a total business revenue of 307.2 billion yuan in 2022, an increase of 32.4% over the previous year, and the proportion of telecom business revenue increased from 16.1% in the previous year to 19.4%, driving the growth of telecom business revenue by 5.1 percentage points. Among them, data center, cloud computing, big data, and Internet of Things businesses increased by 11.5%, 118.2%, 58%, and 24.7% respectively over the previous year.
The Ministry of Industry and Information Technology (MIIT) released the "14th Five-Year Plan for the Development of the Information and Communication Industry", which predicts that by 2025, the revenue of the mainland's information and communication industry will reach 4.3 trillion yuan, with an average annual growth rate of 10% in five years. The cumulative investment in information and communication infrastructure reached 3.7 trillion yuan, an increase of 1.2 trillion yuan in five years.
According to the analysis of the Prospective Industry Research Institute, on the whole, the mainland communications industry will significantly improve its capabilities in infrastructure construction, data and computing facilities services, and network data security governance in the future, and move towards the world-class level.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "China Communications Industry (ICT) Development Prospect Forecast and Investment Strategic Planning Analysis Report" by Qianzhan Industry Research Institute.
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