Loctek Ergonomic Technology Corp(300729) (300729, SZ) has recently become the focus of investors. There is no other reason, but on January 27, the company announced that plans to spend 207 million yuan to sign a 1800teu container ship construction contract with China's first-class shipyard, which is expected to be delivered in March 2023.
It is mainly engaged in linear drive and ergonomic products, including lifting tables, display brackets, etc. Loctek Ergonomic Technology Corp(300729) is a typical foreign trade enterprise involved in B2B OEM, cross-border e-commerce independent brands, overseas warehouses and other fields.
Although the past two years have been affected by the epidemic, the international shipping has been disordered and the sea freight has remained high, which has increased the cost pressure of China's foreign trade enterprises, the fact that foreign trade enterprises want to build ships still makes investors controversial, optimistic and doubtful about the action of listed companies. "When the sea freight is high, shipbuilding is necessary, but if the sea freight drops when the ship is delivered and put into use, is it still necessary to build shipbuilding?"
On January 28, in a teleconference, Loctek Ergonomic Technology Corp(300729) Director Secretary Zhu Wei said that at first, refused to build ships, but later demonstrated the shipbuilding cost, container rental cost and inventory cost in many ways. In terms of Loctek Ergonomic Technology Corp(300729) own business , shipbuilding is still economical compared with chartering.
On January 29, Loctek Ergonomic Technology Corp(300729) chairman Xiang Lehong explained that the shipbuilding issue had been studied and planned for a long time from the perspective of the company's strategy, not on impulse. In the future, China's independent brand cross-border e-commerce export will be a general trend, but constrained by international logistics in various links such as shipping, the logistics response speed is slow, resulting in long preparation cycle, high capital occupation cost and low inventory turnover rate of cross-border e-commerce. The ship business of lege is actually an extension of the overseas warehouse business, accelerating the cargo going to sea and the capital flow of enterprises.
On January 31, Loctek Ergonomic Technology Corp(300729) said during the institutional research that the company's shipbuilding is repeatedly studied and planned for a long time at the strategic level, not on impulse. The cost of chartering is very high: short-term Charter (half a year to one year), the quotation is close to 100000 US dollars / day (including labor cost), generally more than 50000 US dollars / day; long term rent (more than three years), with an offer of 30000-40000 US dollars / day (about 250000 yuan). The annual rent is more than 10 million US dollars, and the ship cost is 32 million US dollars. You can buy the ship after renting it for three years . In addition, this year mainly focuses on shipbuilding investment. Under the condition of balanced capital demand, it may also buy land to build its own warehouse. Next year, it will dilute part of its equity and introduce external investors. The operation of ships and the construction of warehouses need a certain amount of capital, and the capital demand will be steadily promoted according to the scale, growth and ability of business development.
As of January 28, Loctek Ergonomic Technology Corp(300729) shares were reported at 24.25 yuan, up 3.85% on the same day, with a total market value of 5.4 billion yuan. Since the beginning of 2022, the share price of Loctek Ergonomic Technology Corp(300729) has fallen from around 29 yuan to around 24 yuan, a decrease of nearly 17%, and the market value has also fallen by 1.06 billion yuan compared with the opening on January 4.
spend 207 million on shipbuilding, investors have different views
According to the announcement on January 27, the board of directors of the company approved to invest in the construction of a 1800teu container ship, with a total construction cost of US $32.6 million (a total of about 207 million yuan).
Huanghai Shipbuilding Co., Ltd. is in charge of shipbuilding this time, Loctek Ergonomic Technology Corp(300729) will pay the ship payment in five phases according to the construction progress of the ship. On the same day, Loctek Ergonomic Technology Corp(300729) also disclosed that it plans to invest US $30 million to establish a wholly-owned subsidiary in Singapore. The business scope of the company mainly includes NVOCC business, international container ship transportation, international cargo transportation, etc.
Li Xiang, CO president of Loctek Ergonomic Technology Corp(300729) revealed to the reporter of daily economic news that the main business of Singapore company is shipping business. For the operation of self built ships in the future.
The business of investing in shipbuilding and operating self built ships has surfaced, attracting the attention of many investors.
Foreign trade companies should build their own ships, Loctek Ergonomic Technology Corp(300729) what do you say?
On January 27, Loctek Ergonomic Technology Corp(300729) announcement mentioned the purpose of this investment in shipbuilding, "Since 2020, the global covid-19 epidemic has continued to spread, the efficiency of ports in overseas countries is generally low, and the security, timeliness, reliability and economy of the supply chain have been severely challenged. At present, international trade is in a period of transformation and development from OEM to brand, the online consumption trend of consumer goods e-commerce has continued to strengthen, and the company's online business has grown steadily and rapidly. To further improve Step by step to improve the user experience of e-commerce shopping and rapid arrival, shorten the delivery cycle, improve the inventory turnover rate, promote the integrated operation of the company's public overseas warehouse business and first-trip shipping, drive more small and medium-sized enterprise brands to go to sea, and reduce the disturbance of logistics costs to brand operation. After the study and decision of the board of directors, the company plans to strengthen the safety of supply chain through shipbuilding or chartering Improve supply chain efficiency and reduce transportation costs. "
After Loctek Ergonomic Technology Corp(300729) disclosed the news of shipbuilding, there were different voices and interpretations among investors.
Some investors believe that "fierce" can solve the impact of sea freight on the company's profits and strengthen the autonomy of the supply chain; Of course, some investors also raised questions. If the overseas epidemic situation improves, the sea freight price may be difficult to maintain a high level and fall. Will self built ships bring losses? In addition, the low efficiency of port operations in the United States leads to port congestion, and shipbuilding does not seem to solve the core of the problem?
tight shipping brings multi-party cost pressure
It is worth noting that the disorder of shipping caused by the epidemic is not just a simple problem of rising sea freight costs. In December 2021, according to the current situation of the household foreign trade industry, the daily economic news published a report on how to "endure the winter and usher in the spring" in the household foreign trade industry due to the overstock of building inventory and order differentiation under the "super cycle" lights.
The reporter once mentioned in the report that for enterprises, the goods cannot be delivered, and increasing inventory is only one of the disadvantages. What is more serious is the pressure on cash flow. Some respondents revealed that "there are large-scale household enterprises under great pressure this year, because the goods can not be delivered, the funds can not be transferred, and the cash flow is almost cut off".
The relevant respondents further analyzed to the reporter of the daily economic news that only when the customers settle the payment on time, the factory avoids pressing the goods, and the goods can flow quickly, can the funds be transferred. On the one hand, the manufacturing factory of terminal products should settle the purchase expenses with the upstream suppliers on time. If the enterprise's capital chain is tight and defaults, there may be a "no" message from the factory in the market soon, which will be transmitted to the whole upstream and downstream, and the enterprise's capital chain will be more tense. On the other hand, if the enterprise pays the supplier's money, but the goods do not go out and the payment for goods does not come in, it means that the circulating funds have become goods in the warehouse. In this way, the capital pressure of enterprises will also rise sharply.
In fact, this situation is also reflected in the financial statements of listed companies. In the 2021 semi annual report and the 2021 third quarterly report of Zhejiang Anji local home furnishing listed company Ue Furniture Co.Ltd(603600) (603600, SH), it was mentioned that the shortage of shipping positions increased the funds occupied by inventories, and the net cash flow from operating activities decreased significantly year-on-year in the reporting period.
On January 29, Loctek Ergonomic Technology Corp(300729) chairman Xiang Lehong told the reporter of daily economic news that from the strategic level, the decision of shipbuilding has been planned for a long time, not on impulse. At present, the proportion of overseas e-commerce has increased, and the demand of users for products has increased. In the process of transportation, it is hoped that the inventory turnover rate will be improved. In the traditional FOB mode of OEM export, the inventory turnover rate is very high, and the enterprise inventory can be maintained at a low level. However, after doing cross-border e-commerce, there are goods preparation, cabinet pressing and warehouse inventory in overseas warehouses, which leads to the prolongation of inventory time. From an economic perspective, the brand hopes that the shorter the capital occupation at the transportation end, the better.
Xiang Lehong analyzed that the shipping business generally includes three aspects: first, in terms of cargo solicitation and departure, lege has its own cargo volume and public warehouse customers. There is no need to worry about this, Ningbo Zhoushan Port Company Limited(601018) port and the government will probably support the development of local high-quality foreign trade enterprises; Second, in terms of maritime transportation, Loctek Ergonomic Technology Corp(300729) will hire professional maritime management institutions to implement it, including seafarer recruitment management, so as to make up for the shortcomings of Loctek Ergonomic Technology Corp(300729) in the above fields; Third, lege has rich experience in the field of suitcase, container pulling, customs declaration and warehousing on the shore of the destination port, Loctek Ergonomic Technology Corp(300729) has been engaged in cross-border e-commerce for 11 years, has its own overseas warehouse for 9 years and public overseas warehouse for 2 years, and has cooperated with many destination port customs declaration trailer companies for a long time.
According to Xiang Lehong, the 1800teu container ship invested by lege this time is an express ship with 900 40HQ. After the "express ship" is put into use, according to the loading rate of 80% and 10 trips from Ningbo to the West Bank of the United States every year, the operating cost shared in each high container will be about 2500 US dollars, It is far lower than the sky high sea freight of more than 10000 US dollars / high container from Ningbo to west America.
After internal calculation, Xiang Lehong believes that compared with slow ships or ships with multiple stops, fast ships can bring convenience in terms of unsalable goods, tail goods, storage funds and inventory funds. Even if the high sea freight rate drops to the low point in the future, the business of express ship can still maintain a certain economy. "A city's transportation needs not only buses and subways with large passenger capacity, many stops and longer time-consuming, but also special buses with fast speed and point-to-point although the market capacity is small. Compared with the large liner of shipping giants, what we invest in is such a fast ship."
Zhu Wei, the Secretary of the board of directors, said that when he first heard that the company was going to build a ship, he first felt that there was a great risk and rejected the scheme, but after demonstration, he found it feasible. Supporting his logic of supporting shipbuilding, in addition to the above cost of buying and operating ships can be lower than the price of shipping and the advantages and economy of express ships, the shipbuilding cost may be lower than the price of long-term chartering agreement in 10 years, which is also an important factor.
shipbuilding is easy, operation is not easy
Xiang Lehong said that shipbuilding to sea is an extension of lege's public overseas warehouse service, and Loctek Ergonomic Technology Corp(300729) will form a model of "cross-border e-commerce + cross-border shipping + overseas warehouse". He believes that cross-border e-commerce is one of the trends of China's foreign trade in the future. A large number of Chinese brands have the demand to go to sea. They only have overseas warehouses and no first journey service, but just walk on one leg.
However, even if the cost accounting is feasible, some voices still question that there are still a lot of tuition fees to pay before entering the shipping market. Is it easy to build ships and difficult to operate? Has LEGO been fully investigated in ship operation? After all, there were many giants in this field before, but they "missed the first step".
According to the report of the shipping industry network, in the past 2021, there were nearly 50 new players in the US line alone, including retail giants such as Amazon and Wal Mart. However, due to the lack of wharf relations with old shipowners, the fleet also suffered from berthing at the docks of Los Angeles and Long Beach port. The average waiting time of the fleet at the anchorage was 40 days .
In addition, some analysts pointed out that the problem of towing containers by foreign fleets is also a major pain point for Chinese enterprises to get involved in shipping business.
Li Xiang, the co president of lege, who is responsible for lege's overseas warehouse business, told the daily economic news that after the ship is built, a professional third-party ship management organization will be hired to provide services such as seafarer management and ship operation, and then solicit goods from self operated products and platform customer products. In view of the problems of berthing at the port and towing cabinets by the team, Li Xiang said that he had learned from past experience and had his own plan.
Li Xiang revealed that the shipbuilding issue has been demonstrated since July last year. In the process, he has communicated with the port operation management company, shipping agent and fleet of Los Angeles Long Beach port and San Francisco Oakland port in the west of the United States, and conducted a careful analysis on the tugboat, navigation, unloading, wharf use fee, wharf operation fee, free storage period and wharf shore power system. In particular, the unloading and stacking of containers at the port and the cabinets of lege are put into the overseas warehouse of lege. The way of "one-stop cabinet lifting" can be adopted, which greatly saves the speed of dragging containers by the team and improves the timeliness.
On the issue of port call, Li Xiang said that he would not choose the port of Los Angeles, but the port of San Francisco . Compared with the port of Los Angeles, San Francisco is not busy. It only takes one hour for each team to enter the port and tow containers. Under the same situation, Los Angeles may take five to six hours. Why did everyone choose Los Angeles Harbor? It's because the overseas warehouse is in Los Angeles. It takes 10 hours to drag the cabinet from San Francisco to Los Angeles at a cost of $2400. and LEGO has a warehouse in San Francisco, which can be strongly bound, and customers can directly enter the warehouse . In addition, we also consider the issue of logistics resources. Lege set up a warehouse in San Francisco in 2013. Over the years, it has accumulated a lot of logistics resources, including drag cabinet, express delivery, card pie, Amazon warehouse delivery, etc.
In terms of the general trend, the epidemic has increased the penetration rate of overseas e-commerce. China's cross-border e-commerce industry is ushering in a new outlet. Independent brands have also become one of the trends, and the pain points of cross-border logistics are still obvious. Looking back on the rise of China's e-commerce, today's huge three links and one access are also taking advantage of the rapid advance of e-commerce in those years. Under the current outlet of cross-border e-commerce, it is still worth looking forward to the extent to which cross-border logistics can reshape the value chain.
According to the agreement, the self built ship of Loctek Ergonomic Technology Corp(300729) will be officially delivered in March 2023. The whole value chain model of Loctek Ergonomic Technology Corp(300729) logistics supply chain will also be verified.
