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Is it the second Foxconn, LANs technology, Mengniu and even "old Ganma"?

via:CnBeta     time:2020/7/28 2:31:43     readed:280

Lixun is a strange name to many Chinese people. However, there are many labels on it. It is the "second LANs technology" for female entrepreneurs to start their own businesses from scratch, the "second Foxconn" that is better than blue, the "second Mengniu" from the parent of the old owner, or the smiling technology version of "Lao Ganma"?

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On July 17, lichen was one step closer to the new oligopoly in the OEM industry. It announced that it and its controlling shareholders would invest RMB 3.3 billion to acquire 100% equity of Weichuang investment (Jiangsu) Co., Ltd. and Weixin Zitong (Kunshan) Co., Ltd., wholly-owned subsidiaries directly and indirectly controlled by Wistron.

This means that the once big airpods factory may start productioniPhoneYes.

Just as artists in the entertainment industry "sing when they perform well", airpods is Apple's No.1 star product in the past two years. After making great success in the OEM of airpods, Apple seems to have made up its mind to send orders for iPhone to lichen precision.

Weichuang Zitong is the third largest generation factory of Apple's iPhone. Its scale is smaller than that of Foxconn and Hewlett Packard. The main business of Weichuang Zitong, the target of this acquisition, is the iPhone production base.

Weixin Zitong (Kunshan) Co., Ltd

According to foreign media reports, Apple has instructed ritzon to participate in the investment in the supplier of iPhone metal case, Kecheng technology, hoping to support lichen to challenge Foxconn's long-term market position in the electronic assembly industry.

What the market didn't expect was that lichen cut through the mess and directly acquired the iPhone production line of Wistron, and directly entered the OEM chain of iPhone. If the acquisition is completed successfully, lichen will enter the iPhone assembly supply chain and become the first mainland manufacturer to contract for Apple's iPhone.

01

Inspirational story of working girl's promotion to ten billion millionaires

Speaking of the company, we have to mention its origin with Foxconn. The legendary experience of Wang Laichun, its female founder, is almost the same as Zhou Qunfei, the famous "working Queen" and former chairman of Lansi technology, the richest woman in China.

Benefited from the dividends brought by the reform and opening up in the 1980s, Shenzhen attracted many Taiwanese businessmen. In 1988, Foxconn, a Taiwan electronics giant, established its first factory in the mainland and recruited the first batch of 150 employees from Chenghai, Chaozhou, Fengshun and other places around Shenzhen. Wang Laichun, a 21-year-old peasant girl, became a member of Foxconn's "marine electronic connector factory".

Foxconn's first factory in mainland China Shenzhen ocean precision computer connector factory

Wang Laichun, who is hardworking, has been working in Foxconn for 10 years. He has grown from an ordinary assembly line worker to a section chief in charge of thousands of people. This was the highest position for mainland employees at Foxconn at that time.

In 1997, Wang Laichun decided to resign and start a business. In 1999, Wang Laichun and his brother Wang Laisheng invested in the acquisition of Lucent Hong Kong.

In 2004, Wang Laichun returned from Hong Kong to Shenzhen to establish Lixun precision. His main business is to make connectors and connectors for desktop computers. This is one of the main products of Foxconn in its early years.

Wang Laichun introduces the company's products to customers

In the early stage of its establishment, the development of lichen precision got the help of Foxconn, Foxconn provided supporting facilities for large companies, and lichen precision provided supporting facilities for Foxconn, producing and selling various electronic connecting wires and connectors.

In September 2009, Fugang electronics company of Guo taiqiang, Guo taiqiang, brother of Guo Taiming, subscribed for 4 million shares of lichen precision, and became the third largest shareholder of lichen precision with 3.08% equity.

According to Lixun precision prospectus disclosure, from 2007 to 2009, the company's revenue from selling products to Foxconn accounted for 47.73%, 56.46% and 45.38% of the current operating income respectively. In those years, lichen has built its business foundation by accepting orders from Foxconn.

Relying on the business support of Foxconn, the company's largest customer, lichen precision has grown rapidly. Wang Laichun, the current chairman of the board of Lucent precision, once told the media that learning from the business model of Hon Hai enabled the company to achieve growth.

In 2010, Lixun precision was listed in Shenzhen, and Wang Laichun's personal value reached 2.3 billion yuan.

Wang Laichun, who was listed on the stock market of Lixun precision in Shenzhen in 2010

Once a working girl, on China's rich list.

As the actual controller of Lixun precision, Wang Laichun's brother and sister jointly hold 42.93% of the shares through their holding of Lixun limited.

As of today's closing, the former working girl has become a super rich man with more than 83 billion yuan (about 12 billion US dollars).

02

Get rid of competitors

After going public, Lixun precision continues to maintain its vigorous development and open up a sustained growth model.

Through a series of capital operations, Lixun precision has realized the three-level leap of "connector module whole machine", formed three major businesses including consumer electronics, computer precision components and automotive electronics, and completed the extension of industrial chain and category expansion.

Lixun precision product line, picture source: Official Website of lichen precision

With the funds raised, in 2011, Lixun acquired Kunshan liantao, thus successfully cutting into the apple supply chain and becoming aiPadOne of the main suppliers of connecting lines;

In 2016, lichen precision has developed into an important module manufacturer of apple, developing module products such as antenna, wireless charging and acoustic devices;

In 2017, lichen precision successfully obtained the OEM qualification of apple airpods, and officially entered the field of OEM of complete machine.

In the past ten years, Lixun precision has gradually shaken off its competitors. At present, lichen precision is the main supplier of airpods, accounting for 65% - 70% of the total. Airpods is a cash cow for both apple and lichen.

Apple CEO cook visits Lixun precision Kunshan companymicro-blog

Strategy analytics, a consultancy, expects growth in the airpods and true wireless headset markets to continue. By 2024, revenues will exceed $100 billion. In 2019, apple shipped nearly 60 million airpods, accounting for 71% of the revenue of the true wireless headset market.

Guo Mingji predicts that the total volume of airpods will reach 120 million units in 2021

Since its listing, the stock price of Lixun precision has soared by more than 50 times, and the corresponding net profit has continued to expand from 116 million yuan in 2010 to 4.714 billion yuan in 2019. In the past nine years, the scale of operating income has expanded by more than 60 times, and the profit scale has expanded by more than 40 times. The compound growth rate of operating income in 9 years is 58.14%, and the compound growth rate of attributable net profit is 51%.

According to the data of Dongfang fortune.com, at the end of the second quarter, there were 1096 position funds of Lixun precision, an increase of 464 over the end of the first quarter, with a growth rate of 73.42%; the total market value of shares was 54.289 billion yuan, an increase of 19.857 billion yuan over the end of the first quarter, with a growth rate of 57.67%.

It can be seen that during the second quarter, the market is still optimistic about Lixun precision.

Everbright Securities, a research paper said :" the short-term share of mobile phone modules to increase the expansion of new products, while AirPods continue to quickly release; medium-term Apple Watch is expected to replicate the success of the AirPods; long-term precision manufacturing platform, to iPhone、 communications, cars and other areas ."

03

More ambition for iPhone

After the acquisition of Weichuang by Lixun precision this time, it is no longer the "little brother" of Foxconn, and the former "houlang" has become a strong competitor.

Ran Xuantong, an analyst at gibang consulting, said: "when the acquisition is completed, the possibility of lichen OEM iPhone is relatively large. Although Weichuang's iPhone share is not high, Apple has a tradition of maintaining multiple suppliers in each link."

Zhang Guobin, CEO of electronic innovation network, also said that the future of lichen precision will be the most important local precision manufacturing enterprise. Now OEM TWS (real wireless stereo) headphones will enter the field of mobile phone OEM in the future, "Apple's layout can also suppress Foxconn."

It is understood that Wistron is one of the largest ODM OEM factories in the world, sharing OEM orders for complete iPhone with Foxconn and Hewlett Packard.

Since 2017, wetrong began to make new iPhone orders. For this reason, wetrong invested 200 million to expand its plant in Kunshan to produce Apple's cheap iPhone.

From the perspective of Apple's business volume, Foxconn usually orders more than 50%, ASUS around 30%, and Wistron at 10%.

Source: Nikkei Chinese website

Weichuang has five manufacturing centers in Kunshan, Taizhou, Zhongshan, Chongqing and Chengdu. The main business of Weixin Zitong, which was acquired by Lixun precision, is the production and marketing of handheld mobile devices, which is the main production base of iPhone.

Weichuang's Kunshan factory is a high-quality asset built by Weichuang.

According to relevant data, after increasing investment in Kunshan in 2018, Weichuang group carried out new technology projects, put high-end intelligent products and new product development in Kunshan to build an intelligent factory.

For example, it looks like a second-hand Weixun A person in the industry believes that what Lixun has acquired is the high-quality assets of Wistron.

"If we want to OEM iPhone, we definitely need to invest in it again. In this operation, we should plan to expand the layout, expand the track, expand the OEM from airpods and other products to iPhone, and then expand to other Android brands. With Foxconn and other manufacturers' strategic contraction in the mainland, Lixun precision has the opportunity to take a share in this field. " Ran Xuantong said.

Several employees of lichen precision Kunshan factory told the IT times that at present, the base salary of lichen precision general workers is about 2000 yuan, and with overtime pay, the average monthly comprehensive salary is between 4000 and 5000 yuan.

"We are preparing for mass production of the sixth generation Apple watch, which is about to be released. Recently, there are more overtime work," said a factory in Zhejiang Lixun precision It can be predicted that, when the company officially takes over the OEM of Weichuang Kunshan factory's iPhone and Apple's support for it, it is likely that in the future, the company will get more orders for medium and high-end models.

04

Investment anchor of Heshuo and Weichuang

On July 22, after the acquisition of Weichuang Kunshan factory by Lixun precision, the controlling shareholder of Lixun precision, Li Xun Co., Ltd. and its person acting in concert, one of the actual controllers of lichen precision and vice chairman Wang Laisheng, reduced their holdings of 130 million shares through the block trading system of Shenzhen Stock Exchange, accounting for 1.85% of the total share capital of the company.

According to the data of Shenzhen Stock Exchange, the average transaction price of Lixun limited and Wang Laisheng was 53.2 yuan / share, with a discount rate of 7.2%, and the cash out amount was as high as 6.91 billion yuan.

Lixun precision announced that the funds held by Lixun Co., Ltd. and Wang Laisheng were mainly used to repay the loans from the Bank of Lucent limited and support the related capital needs of Lixun precision.

At the same time, Weichuang, the acquiree, announced that its subsidiaries spent 3 billion yuan on the same day to purchase 56.39 million shares of Lixun precision stock at a price of 53.2 yuan per share.

After the completion of the increase, wetrong held 0.81% of the shares of Lixun precision, ranking the fifth largest shareholder. In the announcement, Wistron said it was a strategic investment to buy Lixun precision stock.

In the eyes of the outside world, this is undoubtedly equivalent to lichen's equity replacement of Wistron's assets.

Another Taiwanese manufacturer, Heshuo, also invested 600 million yuan to increase its holdings of 11.38 million shares of lichen precision, at a price roughly the same as that of Wistron. Together with its previous holdings, Asustek's stake in the company rose to 0.57%, becoming its sixth largest shareholder.

Under the new situation, the two traditional Taiwan OEM giants "know the current affairs well", anchor the mainland "rookie" Lixun, and build a moat precisely.

At present, the market value of Lixun precision is about 400 billion yuan, much higher than the market value of Foxconn's parent company, Hon Hai group, which is about NT $119.08 billion (equivalent to about 280 billion yuan), and much higher than the current market value of Foxconn's A-share listed company, industrial Fulian, by 305.2 billion yuan.

In this regard, what will Foxconn's internal os be?

Author / IT Times reporter Li Yu Yang Qian Yiyun

Typesetting / Huang Jian

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