With a net worth of 50 billion, the OEM queen loves to invest

21st Century Business Review

2024-05-13 20:54Published on the official account of Guangdong 21st Century Business Review

Written by丨Qin Yi Editor丨Tan Lu

"The company's investment behavior under the rapid growth in the past is correct in retrospect."

In early May, Wang Laichun, the founder of Lixun Precision, attended the performance exchange meeting and said frankly that "the choice of extension development has never stopped", and he will pay attention to opportunities in automobile, communications, medical and other industries.

With OEM iPhone, AirPods and other products, Wang Laichun has built a 100 billion giant and risen to become the queen of OEM, and his struggle has always been happy.

On the 2024 Hurun Global Rich List, her net worth is about 50 billion yuan.

In the past three years, the gross profit margin of Lixun Precision has been around 12%, and the net profit margin has fluctuated around 5%.

Wang Laichun is leading Luxshare Precision to develop automobile and other businesses, trying to find the second growth curve.

At the same time, she is also investing in vitro, not showing the mountains and waters, and has a wide range of layouts in the upstream and downstream of the industrial chain.

Flowering in vitro

In April, a unicorn lurking in Guangzhou surfaced.

Lijing Innovation, a manufacturer of precision optical products, was selected for the first time on the Hurun 2024 Global Unicorn List with a valuation of 15.5 billion.

The results of equity penetration show that it was established by Luxshare Group, and the actual controller is Wang Laichun's brother Wang Laixi.

In the past, Wang Laichun would adopt the strategy of mergers and acquisitions, and she would jointly enter the supply chain of Apple, Mercedes-Benz, and BMW by investing in external partners.

Following this line of thinking, Lijing Innovation invested in the lidar company Suteng Juchuang, and the two established a joint venture company to develop the automotive industry together.

In addition to listed companies, there are actually quite a few "Luxshare" companies controlled by Wang Laichun.

According to the financial report, among the related party transactions of Lixun Precision, there are two entities with the prefix "Li": Lisheng Automotive Technology (Suzhou) and Lizhen Technology (Kunshan).

Among them, Lisheng Automotive Technology was established in Suzhou in 2007, the legal person and chairman of the board of directors is Wang Laichun, and Kunshan company was established in April this year.

The ultimate shareholder of the two companies is BCS Automotive, an overseas entity registered in Hong Kong.

One of the ultimate investors of Lizhen Technology (Kunshan) is Luxshare Co., Ltd., which is the parent company of Luxshare Precision, and the main legal persons are Wang Laichun and his brother Wang Laisheng, who have made direct investments in 13 companies.

Among them, the more well-known is the Chery series.

Luxshare Co., Ltd. directly holds 7.87% of the equity of Chery Automobile, and also holds 19.88% of the equity of its major shareholder "Chery Holdings".

The two brothers and sisters of the Wang family serve as directors in Chery.

"The investment in Chery is led by the holding company of Luxshare Precision, and it is a pure investment behavior of individual shareholders." Regarding the rumors of the end of the car, Lixun Precision responded at the performance meeting.

However, Wang Laichun has always had an interest in automobiles, and this investment is a case in point.

Endogenous epitaxy

"Extension development is more for the future industrial planning layout, and the short-term profit margin improvement is limited." Wang Laichun explained to investors.

In 2023, Lixun Precision's revenue will be about 231.9 billion yuan, and its net profit will be 10.953 billion yuan, a year-on-year increase of 19.53%.

From the perspective of revenue composition, more than eighty percent of the revenue comes from the consumer electronics business, and the largest customer is Apple.

However, affected by the downward adjustment of PC demand, the computer interconnection and connector business entered a negative growth channel, and the overall gross profit margin declined.

In the direction of the automotive industry that she is focusing on, connected products account for less than 4%.

In the system of listed companies, Wang Laichun maintains a certain investment intensity.

In 2023, Lixun Precision will invest a total of 1.578 billion yuan in its consolidated subsidiaries, with a total book value of more than 23 billion yuan.

Among them, what has attracted much attention is a non-wholly-owned subsidiary, Likai Precision Technology (Yancheng), whose revenue will reach 79 billion yuan in 2023 and a net profit of about 2 billion yuan.

Wang Laichun used this main body to invest 500 million yuan to set up a company in Kunshan the year before last to engage in virtual reality equipment manufacturing and other businesses, and some analysts believe that it aims to catch orders for Apple's XR products.

As far as Lixun Precision is concerned, her equity investment is relatively limited overall.

As of the end of 2023, its consolidated long-term equity investment is 4.233 billion yuan, which does not account for a high proportion of assets.

Wang Laichun said at the exchange meeting that every industrial investment will ensure that the company's overall ROE is higher than 20%, which is the premise of endogenous extension strategy.

From January to March 2024, Lixun Precision's net profit was 2.471 billion yuan, an increase of 22.45%, and the increase in investment income of associated enterprises also helped.

Rational input

Wang Laichun's extension strategy also began to exercise restraint.

In 2023, she began to slow down and terminated the non-public offering of shares in 2022, originally planned to raise 13.5 billion, involving multiple product line construction projects.

"The peak period of the company's capital investment has passed."

Wang Laichun responded that in the next five years, he will comprehensively consider factors such as the direction and scale of business development and the endogenous extension demand of the industry, and pay attention to reasonable investment.

As of the end of last year, its total liabilities were 91.707 billion yuan, the asset-liability ratio was 56.61%, and the monetary funds on the account were 33.619 billion yuan.

"In the short term, the focus will be on the automotive, medical and communications sectors."

Wang Laichun explained that in the consumer electronics sector, the vertically integrated supply capacity of both customers and product lines has been relatively stable and complete.

In the short term, she also needs to earn the trust of investors.

At its peak, the company's market value once exceeded 400 billion yuan, and in the past two years, the market value has fallen by about half.

Wang Laichun threw out high dividends, with a total of 2.153 billion yuan, accounting for more than 20% of the profit, and revealed that there is no plan to spin off part of the business and go public for the time being.

"Increasing the dividend ratio is a long-term trend and not a temporary decision." She said.

At the same time, a large amount of cash dividends are returned to the privately controlled "Luxshare Limited", which is objectively conducive to the freedom of personal investment. What is rare is that most of his family's investments are concentrated in high-tech manufacturing, which is more focused.

"Flying with the phoenix, it will be a handsome bird." Wang Laichun believes that Lixun Precision is underestimated.

Her next plan is to expand customers and products faster, and to reduce the risk of building from 0 to 1 when deploying globally.

Image source: Lixun Precision, except for the annotation

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