This article is from WeChat official account:Yiouwang (ID: i-yiou) , author: listening to the rain, drawing from head: vision China
In the consumer electronics industry, Luxshare Precision’s position is like Moutai in the liquor industry, full of legend and wealth——
Foxconn’s “working girl” counterattacked; by virtue of OEM AirPods for Apple, revenue increased by 174% in three years, and the market value exceeded RMB 400 billion, surpassing Foxconn’s parent company Hon Hai Group; it was praised by Apple CEO Cook. …..
In Jinan, Shandong, a thousand kilometers away from Kunshan, another Apple supply chain company, GoerTek, has also achieved rapid growth by virtue of its foundry for AirPods. The stock price has risen from a low of 6 yuan at the end of 2018 to the present With a market value of about 140 billion yuan, it is called “lixun.”
However, looking back at the development history of the two companies, in the field of acoustics, Goertek was the forerunner and the industry leader that was counterattacked by Luxshare Precision.
2017, key card position error
Before 2017, the development of Goertek and Luxshare Precision was in a “similar parallel” state.
GoerTek shares and Luxshare Precision were established in similar years.
In the 1990s, the No. 8 Radio Factory in Weifang City, which specialized in miniature microphones, closed down. One of the workshop technicians, Jiang Bin, used the original technology to establish a small private enterprise Weifang Yilida Electroacoustic. The main products are still microphone. In 2001, the company changed its name to Goertek.
At the same time, in 1997, Wang Laichun, who was a working girl at Foxconn and became a section chief, also left Foxconn and founded a factory with his brother Wang Laisheng. The initial business was electricalVideo camera back shell, wiring board, etc. Around 2002, Foxconn orders surged and began to hand over orders for PC converters to Luxshare Precision.
After changing its name to Goertek Acoustics, Goertek’s business has expanded to the manufacturing and sales of MEMS sensor modules, micro speakers, microphones, antennas, receiver modules and other acoustic components. Customers include Samsung, Sony, Google, Microsoft, Cisco Such as the world’s top manufacturers, and gradually grow into the global acoustic industry leader, listed in 2008, operating income of 1.012 billion yuan, net profit of 120 million yuan.
In this period, Luxshare Precision, after receiving orders from Foxconn, has also achieved rapid growth in performance. Foundry products have gradually expanded from a single PC converter to notebooks and consumer electronics cables.
Luxshare Precision was listed in 2010 two years later than Goertek. In the year of listing, its operating income was almost the same as that of Goertek, with 1.011 billion yuan and a net profit of 116 million yuan.
The time when the two entered the Apple supply chain is also similar.
In 2010, Goertek entered the Apple industry chain, supplying Apple with acoustic components and wired headsets.
One year later than Goertek, Luxshare Precision entered the Apple supply chain through the acquisition of Kunshan Liantao in 2011 and became one of the main suppliers of Apple cables. Since then, they have successively won orders from Apple such as iPad internal cables, MacBook power cords, AppleWacth wireless charging/straps, MacBookType-C and iPhone adapters.
Benefiting from the continuous increase in Apple’s mobile phone shipments, both have achieved rapid growth in the few years from their listing to 2017. Goertek has grown from 1 billion yuan at the time of listing to 255 in 2017 Billion yuan, Luxshare increased to 22.8 billion yuan.
The turning point also appeared in 2017. Looking back now, it is this key card position that has led to the different growth rates and business heights of the two companies since then.
In 2016, AirPods was launched with iPhone7. At first, Apple’s selected supplier was Inventec, a Taiwanese company, but Inventec did not realize that the small AirPods would have a market size of 100 billion in the future, and the response was slow.
In the gaps, GoerTek was not keenly aware of opportunities. In July 2017, Luxshare Precision obtained the foundry qualification of Apple AirPods, and with its nearly 100% yield rate, it was favored by Apple and gradually became AirPodsMajor suppliers, occupy 60% of the foundry share.
The reacted Goertek entered the AirPods supply chain in 2018 and eventually became AirPods’ second largest foundry factory, occupying 30% of the foundry share, which is twice the difference between the two.
One step slower, it becomes “lixun”
As a foundry that has a high degree of dependence on major customers, the card position at key time nodes determines the growth ceiling of the foundry and even life and death. It is this key position of fast and slow that has established the different growth rates and industry status of Luxshare Precision and GoerTek.
Since 2017, AirPods sales have increased significantly, and the TWS(True Wireless Stereo) headset industry chain has become a good growth in the next few years. One of the tracks. According to Counterpoint data, global shipments of TWS will reach 100 million units and 150 million units in 2019 and 2020, respectively, with a market size of nearly USD 7.5 billion and USD 11 billion respectively.
Among these, in 2019, for example, AirPods took 50% of the global TWS market share and 71% of revenue, firmly occupying a dominant position.
Riding on the east wind of the industry, both Goertek and Luxshare Precision have achieved explosive growth, but behind the growth, the gap between the two is also obvious.
From the perspective of revenue and net profit, in 2017, the operating income of Goertek and Luxshare Precision was at the same level, at 25.5 billion yuan and 22.8 billion yuan, respectively. In terms of net profit, Goertek’s 2.14 billion yuan is higher than Luxshare’s 1.75 billion yuan.
The gap has widened since 2018. In 2018, Goertek’s operating income was 23.7 billion yuan, a year-on-year decrease of 7.14%; net profit was 868 million yuan, a year-on-year decrease of 59.42%; this year, Luxshare Precision’s business Revenue increased by 57.06% year-on-year to 35.8 billion yuan, and net profit increased by 61.05% year-on-year to 2.7 billion yuan.
After experiencing the pains of transformation in 2018, Goertek’s revenue in 2019 increased to 35.1 billion yuan and net profit was 1.307 billion yuan, a year-on-year increase of 50.59%; Luxshare Precision further widened the gap and increased its operating income to 62.5 billion yuan, with a net profit of 4.714 billion yuan, a year-on-year increase of 73.13%.
The latest comparable financial report for the two is the first half of 2020. Goertek’s operating income was 15.5 billion yuan, an increase of 14.71% year-on-year, and Luxshare was 36.452 billion yuan, an increase of 70.01%. In contrast, in three years, the two are no longer of the same magnitude.
The gross profit margin reflects the company’s premium ability and competitiveness in the market. In terms of gross profit margin, Goertek and Luxshare are also at different levels.
From 2017 to 2019, the gross profit margins of Goertek were 14.73%, 12.61%, 12.66%, and Luxshare’s gross profit margins were 19.46%, 21.19%, and 19.99%. The average difference between the two is about 8%.
In addition to the slow and fast key card positions in 2017, the amount of R&D investment of Goertek and Luxshare may also be one of the reasons for the gap between the two.
According to the financial report, in 2016, the R&D expenses of the two companies were at the same level, and even Goertek’s shares were higher than that of Luxshare Precision, which were 1.024 billion yuan and 932 million yuan respectively. In the three years from 2017 to 2019, Luxshare Precision The research and development expenses of Goertek gradually exceeded that of Goertek by an order of magnitude.
During this period, Goertek’s R&D expenses were 1.232 billion yuan, 1.618 billion yuan, and 1.807 billion yuan. The total R&D investment in three years was 4.658 billion yuan; Luxshare Precision’s R&D expenses were 1.542 billion yuan and 2.5.15 billion yuan. RMB 4.376 billion and RMB 8.433 billion in three years; the difference between the two is nearly doubled.
At the same time, the proportion of capitalization of R&D expenses of Goertek in the past three years is about 30%. In contrast, the proportion of capitalization of Luxshare Precision has continued to be 0, and all R&D investment has been expensed.
The difference in market value ultimately reflected in all this is that, since 2017, Goertek’s market value has risen from 40 billion to approximately 140 billion, while Luxshare Precision has grown from 44 billion to nearly 400 billion.
Everyone has a bright future?
The rapid growth of the TWS industry has brought the two companies explosive growth in the past two years. It is foreseeable that in the next year or two, TWS will still be the short-term growth foothold of the two companies, but the existing gap will undoubtedly be irreversible and even wider.
Goertek and Luxshare have also chosen different layouts for their mid- to long-term growth.
In the 2018 annual report, Goertek re-divided its main business from the original electroacoustic devices and electronic accessories into three major businesses: precision components, intelligent acoustic machines, and intelligent hardware. The smart hardware business mainly based on VR/AR is the long-term growth point chosen by GoerTek.
GoerTek is one of the earliest companies in China that entered the VR/AR field.
As early as 2012, Goertek began its research work in the VR field;
In 2015, GoerTek acquired AM3D, a Danish audio technology company, and obtained 3D sound enhancement and 3D surround sound algorithm capabilities, providing solutions for acoustic equipment such as VR and other wearable devices;
In 2016, the company began to provide exclusive supplies to Oculus and Sony. In China, Goertek supplied Pico and Huawei, which are known as the top VR brands in China.
Up to now, Goertek has laid out core technologies such as optics, acoustics, sensors, and structural parts around VR/AR products, and can provide designs including VR/AR-related optical components, head-mounted display equipment and peripheral products. , R&D and manufacturing solutions.
In 2019, Goertek’s smart hardware business revenue was 8.513 billion yuan.
The track that Luxshare Precision chose to cut into is the field of communications and automotive electronics.
In 2018, Luxshare Precision relied on the strengths of traditional connectors to cut into the communication and automotive electronics fields of the early layout.
Luxshare’s communications and Internet products mainly include electronic wiring harnesses, connectors, cables and structural parts. The revenue of related products in 2019 was 2.237 billion yuan. Automotive Internet products mainly include automotive wiring harness and connector products. The revenue of related products in 2019 was RMB 2.361 billion. The two total about 4.6 billion yuan.
At present, in the long-term growth business, Goertek has more operating income than Luxshare Precision.
In terms of the future market size, IDC estimates that the five-year compound annual growth rate of global AR/VR spending during 2019-2024 will be 76.9%, and it will reach 136.9 billion U.S. dollars by 2024.
Behind the communications business is the general trend of 5G and new infrastructure, with a market size of more than 100 billion yuan; in the automotive electronics field, according to Gasgoo data, the global automotive electronics market is expected to be 2.14 trillion yuan by 2022, of which the Chinese market It is 978.3 billion yuan.
At present, the market size of the communications + automotive electronics layout is larger than that of AR/VR, but in the end, can it be accurately positioned at the next key node, and whether it can maintain and continue to iterate high-end precision manufacturing capabilities and technologies Rapid iteration capability, strict management capability, and large-scale rapid shipment capability are fundamental to which one is better.
Conclusion
Before 2017, the development of Goertek and Luxshare Precision was almost synchronized. They also started with a single component. At a similar point in time, similar revenues went public, and at the same point in time they entered Apple’s supply chain.
It was just a step slower in the key card position in 2017. I missed a bit of determination and courage in R&D investment, and missed a bit of precision in precision manufacturing, and finally showed The results are quite different.
The slightest loss is a thousand miles away. This is often the case in business.
This article is from WeChat official account:Yiouwang ( ID: i-yiou) , author: Machines