Produced by | Bullet Finance
Author | Duan Nannan
Edit | Feng Yu
American Editor | Qianqian
Audit | Ode
On April 11, Sunwoda, a leading consumer electronics company, handed over a mixed performance report.
The good news is that in the context of the general recession of consumer electronics and power batteries, Sunwoda's net profit attributable to the parent company increased slightly by 0.77% year-on-year. Worryingly, the company's operating income fell by 8.24% year-on-year, which is also the first time in 13 years that Sunwoda's operating income has declined.
Due to the decline in income and the frequent reduction of holdings by the actual controller, Sunwoda's share price fell again and again, falling by more than 75% from its highest point. In addition, due to the large-scale foreign investment and expansion in the past two years, the scale of the company's interest-bearing liabilities has increased significantly.
After delivering the worst performance in the past 13 years, can Sunwoda set sail again in the future?
1. For the first time in 13 years, revenue declined, and the power battery business declined against the trend
According to public information, Sunwoda was founded in 1997 by two brothers, Wang Mingwang and Wang Wei. In 1994, Wang Wei, who was only 19 years old, came to Shenzhen from his hometown Maoming under the inspiration of his brother Wang Mingwang and started his own business.
In 1997, Wang Wei and Wang Mingwang co-founded Shenzhen Xinwangda Electronics Co., Ltd. The two brothers have a clear division of labor, Wang Wei is responsible for marketing, and Wang Mingwang is responsible for product research and development.
The so-called "brothers work together, and their profits are gold", Xinwangda has developed extremely rapidly under the leadership of the two brothers. The company was also successfully listed on the GEM in 2011, becoming the first listed company on the GEM with "overall R&D, manufacturing and sales of lithium battery modules" as its main business.
Due to the vigorous development of the lithium battery industry, Sunwoda's revenue has risen rapidly after listing. In 2011, Sunwoda's revenue was only 1.031 billion yuan, and in 2022, the company's revenue will increase to 52.16 billion yuan, with a compound annual growth rate of 42.86%. During the same period, the company's net profit attributable to the parent increased from 82.67 million yuan to 1.064 billion yuan, with a compound annual growth rate of 29.11%.
Thanks to the growth of the company's performance and the fact that lithium batteries will be sought after by capital in 2020, Sunwoda's share price has risen all the way, and the company's market value once exceeded 100 billion yuan. According to the shareholding ratio at that time, the two brothers Wang Wei and Wang Mingwang had a net worth of nearly 30 billion yuan, and became the richest man in Maoming, Guangdong.
The good times did not last long, and with the sluggish demand for consumer electronics, Sunwoda handed over a not very satisfactory answer sheet in 2023. According to the data, in 2023, Sunwoda will achieve an operating income of 47.862 billion yuan, a year-on-year decrease of 8.24%, and a net profit attributable to the parent company of 1.076 billion yuan, a year-on-year increase of 0.77%.
(Photo / Sunwoda's main financial indicators in 2023)
It is worth noting that this is also the first time in the past 13 years that Sunwoda's operating income has declined. From the perspective of products, Sunwoda's revenue mainly comes from three parts, namely consumer batteries, electric vehicle batteries and energy storage system batteries.
(Photo / Sunwoda revenue by product)
Sunwoda's two main products, consumer batteries and electric vehicle batteries, have declined to varying degrees. Among them, the revenue of consumer battery business fell by 10.85% year-on-year, and the revenue of electric vehicle battery fell by 14.91% year-on-year.
Regarding the decline in the company's consumer battery revenue, Sunwoda said in the annual report that due to the overall downturn in the consumer electronics industry, the company's overall consumer electronics battery shipments have decreased.
According to IDC data, global smartphone shipments will be 1.17 billion units in 2023, a year-on-year decrease of 3.2%. In addition, according to a report released by TechInsights, the global tablet market will ship about 137 million units in 2023, a year-on-year decrease of 16%. Under this influence, Sunwoda's consumer battery revenue declined.
If the decline in Sunwoda's consumer battery revenue can be attributed to the macro environment, the decline in the company's electric vehicle battery revenue is a big surprise.
The decline in Sunwoda's electric vehicle battery revenue is mainly due to the decline in shipments, which will be 12.11GW in 2022 and 11.66GW in 2023.
It is worth noting that the overall global power battery shipments in 2023 will be 865.2GWh, a year-on-year increase of 26.5%. The overall sales volume of the industry is up, and Sunwoda is down, which means that the company's market share in the field of power batteries is obtained by competitors, which is not a good thing for Sunwoda.
Compared with the consumer electronics industry, the growth rate of the electric vehicle industry is still much faster. This means that Sunwoda wants to continue to expand, and it is extremely important to increase the sales of power batteries. If Sunwoda's power battery revenue cannot resume growth, its performance growth may be questioned.
2. Nearly 70 billion power batteries have been expanded, and the company's interest-bearing liabilities have risen sharply
"Jiemian News Bullet Finance" found that in the context of the slowdown in the growth of the consumer electronics industry, Sunwoda is also actively seeking transformation. The direction of transformation is the power battery, for which Sunwoda spares no expense.
Sunwoda's layout of power battery business can be traced back to 2008 at the earliest. At that time, Sunwoda had realized that the growth space of consumer electronics batteries was limited.
At that time, due to the small sales of new energy vehicles, the business scale of Sunwoda power battery was not large. In 2020, stimulated by the "dual carbon" policy, the sales of new energy vehicles exploded.
Under the temptation of huge interests, Sunwoda gradually increased the layout of power batteries. In 2021, Sunwoda signed the "Project Investment Agreement" with the Management Committee of Zaozhuang High-tech Industrial Development Zone to invest in the construction of power batteries with an annual production capacity of 30GWh, with an estimated investment of 20 billion yuan.
In March 2022, Sunwoda plans to invest in the construction of a 30GWh power battery project within the jurisdiction of the Zhuhai Municipal Government, with an investment amount of 12 billion yuan, of which the investment in fixed assets is 10 billion yuan. In the same month, the company signed a project investment agreement with the Shifang Municipal Government of Sichuan Province, investing 8 billion yuan to build a 20GWh power battery and energy storage battery production base.
In September 2022, Sunwoda signed an investment agreement with Yichang Municipal Government Dongfeng Group and Dongfeng Hongtai, planning to invest 12 billion yuan to expand the production of power batteries.
In the same month, Sunwoda signed an investment letter with Yiwu City for power battery and energy storage battery projects, planning to invest 21.3 billion yuan to expand production. According to incomplete statistics, in recent years, Sunwoda plans to invest nearly 70 billion yuan to expand the production of power batteries.
Frequent foreign investment has caused Sunwoda's interest-bearing liabilities to rise rapidly. In 2019, Sunwoda's interest-bearing liabilities were only more than 6 billion yuan, and in 2023, Sunwoda's interest-bearing liabilities will exceed 20 billion yuan.
Sunwoda also reduces the financial pressure of the enterprise by "squeezing" suppliers. In 2019, Sunwoda's balance of notes payable and accounts payable was 8.047 billion yuan, which will increase to 19.12 billion yuan in 2023. In addition, Sunwoda also frequently raises funds in the capital market. In 2022, it also raised $440 million by issuing GDRs on the Swiss Exchange.
In order to expand the production capacity of power batteries, Sunwoda has brought its own financing ability to the limit, even so, Sunwoda's capital is still tight.
(Photo / Photo Network, based on VRF protocol)
In 2023, Sunwoda plans to spin off and list its power battery subsidiary, Sunwoda Power, to support the company's investment and expansion. However, due to the tightening of IPOs, the road to listing of Sunwoda Power is not smooth.
At present, there is a strange phenomenon in the power battery industry - on the one hand, there is overcapacity in the industry, and on the other hand, the head manufacturers are crazy to expand production. According to the statistics of the battery network, in the first half of 2023 alone, 182 of the 223 investment and expansion projects included in the statistics of the entire battery industry chain announced the investment amount, with a total investment of more than 937.7 billion yuan.
The result of such large-scale investment is inevitably serious overcapacity. Previously, Changan Automobile estimated that the actual production capacity of domestic power batteries in 2025 will be 1000-1200GWh, and the industry's planned production capacity has swelled to 4800GWh.
A new energy analyst of a brokerage firm told "Interface News Bullet Finance" that the main reason why the head manufacturers expand production at any cost is that competitors are expanding production, and if they do not expand production, the company's market share is easy to be obtained by competitors, so it can only expand production head-on.
The same is true for Sunwoda, but limited by its own financial strength, Sunwoda's power battery shipments in 2023 have fallen behind.
Due to the tightening of refinancing, Sunwoda is less likely to raise funds through the capital market in the short term. In addition, with the asset-liability ratio close to 60%, Sunwoda has little room for debt financing.
Under the constraints of many unfavorable factors, in this round of cruel competition from power battery manufacturers, Sunwoda has begun to fall behind in 2023.
3. The actual controller reduced his holdings by nearly 3 billion, and the company's stock price fell by nearly 75%
For Sunwoda, declining revenues and tightening cash flow are just one of the company's dilemmas. Another dilemma is that the company's share price has fallen sharply in the secondary market. As of April 19, Sunwoda closed at 13.71 yuan per share, down more than 75% from its peak.
The decline in Sunwoda's share price is related to the decline in the company's revenue and the change in the preferences of the capital market on the one hand, and on the other hand, it is also very related to the uncontrolled existence of the company's actual controller.
In September 2020, Sunwoda announced that Wang Mingwang, the actual controller of the company, reduced his holdings of 30.99 million shares of the company in total, with a cumulative cash out of about 750 million yuan.
In December 2021, Wang Mingwang once again reduced his holdings of 32.5278 million shares of Xinwangda, and the cumulative cash-out funds were close to 1.4 billion yuan based on the average price of the reduction at that time. In February 2022, Wang Mingwang once again reduced his holdings of 21.46 million shares of the company, with a cumulative cash out of more than 770 million yuan.
Since 2020, Wang Mingwang has accumulated nearly 3 billion yuan in cash-out funds. In addition, many executives of Sunwoda have also reduced their holdings in Sunwoda many times.
The actual controller continued to reduce its holdings, but Sunwoda frequently raised funds in the capital market. In 2018, Sunwoda issued an additional 258 million shares at a price of 9.90 yuan per share, raising a total of 2.554 billion yuan. In 2021, Sunwoda once again issued 93 million additional shares at a price of 41.90 yuan per share, raising a total of 3.915 billion yuan.
(Photo / Photo Network, based on VRF protocol)
In March 2023, Sunwoda once again announced a private placement plan of 4.8 billion yuan, and then due to the tightening of refinancing, Sunwoda had no choice but to withdraw the application for additional issuance. Even so, the cumulative financing amount of the first two Sunwoda was 6.469 billion yuan.
The actual controller has no mercy in reducing his holdings, and Sunwoda's external financing is also unashamed. But in terms of dividends, Sunwoda is extremely stingy. Since its listing, Sunwoda has paid dividends 12 times, with a cumulative dividend amount of 1.165 billion yuan and a dividend rate of only 16.57%.
As a comparison, in 2022, all A-share listed companies will pay a cumulative dividend of 2.13 trillion yuan, with a dividend rate of about 40.8%. This also means that Sunwoda's dividend rate is much lower than the average dividend rate of A-shares.
In the past few years, as the regulator has not stipulated dividends, shareholding reductions, and financing behaviors, large shareholding reductions have occurred from time to time in the history of A-shares.
After the tightening of supervision, the chaos of listed companies reducing their holdings in the future will be fundamentally reversed, and after the implementation of the "New National Nine Articles", the dividend rate of enterprises will also rise sharply, which is also true for Sunwoda.
However, due to the large reduction of the actual controller's holdings, the losses caused to small and medium-sized investors in Sunwoda cannot be made up in the short term. In the context of the overall oversupply of the battery industry, the company may only work hard to better return small and medium-sized investors.
*The title image in the article comes from: Camera.com, based on VRF protocol.