The leading stock of “fruit chain” Luxshare Precision Industry Co.Ltd(002475) made three heavy announcements in one breath.
From the content of the announcement, it involves the progress of 337 survey in the United States, the annual performance express in 2021 and the performance forecast in the first quarter of 2022.
Luxshare Precision Industry Co.Ltd(002475) said that the preliminary ruling of the US International Trade Commission (“ITC”) on the 337 investigation of the company showed that only part of the products of the previous generation of hsio were directly exported to the United States, which fell within the protection scope of some patents claimed by the American Amphenol group (“Amphenol”). ITC confirmed that the company did not infringe the other alleged products involved in the other two U.S. patents. The new design schemes proposed by the company have been determined by ITC and do not constitute any infringement of the three patents.
In 2021, Luxshare Precision Industry Co.Ltd(002475) achieved a total operating revenue of 154.1 billion yuan, a year-on-year increase of 66.60%; The net profit was 7.072 billion yuan, a year-on-year decrease of 2.12%. Although Luxshare Precision Industry Co.Ltd(002475) in 2021, the company’s net profit has resumed growth in the first quarter of 2022. The company expects a net profit of 1.687 billion yuan to 1.754 billion yuan in the first quarter of this year, with a year-on-year increase of 25% to 30%.
Luxshare Precision Industry Co.Ltd(002475) disclose the progress of us 337 investigation: the newly designed patented technology does not constitute infringement
Luxshare Precision Industry Co.Ltd(002475) , the leader of A-share “fruit chain” with a market value of 238.5 billion, disclosed the latest progress of 337 investigation in the United States on March 14.
On December 18, 2020, Amphenol group filed an application for investigation (hereinafter referred to as “this 337 investigation”) with ITC in accordance with Section 337 of the tariff act of 1930. This investigation involves three U.S. patents, involving conductive plastic technology and terminal horizontal injection molding technology. According to Amphenol, these two technical solutions are mainly used in the company’s enterprise class external high-speed IO connector products.
In the face of the above situation, Luxshare Precision Industry Co.Ltd(002475) established a special working group and hired a team of us 337 investigation and patent litigation lawyers to actively respond to the lawsuit. On March 12, 2022, the company learned of the preliminary ruling of the ITC administrative judge, which showed that only part of the company’s products directly exported to the United States from the previous generation of hsio fell within the scope of patent protection claimed by Amphenol group; For the other alleged products involved in the other two U.S. patents, ITC confirmed that the company did not constitute infringement or that the patent claims claimed by Amphenol group were invalid.
Luxshare Precision Industry Co.Ltd(002475) said that the new design schemes proposed by the company had been determined by ITC and did not constitute any infringement of the three patents. This new design scheme / current design scheme and related products have successively passed the customer verification procedure. In addition, the company also filed invalidation applications for the relevant patents of Amphenol group in the State Intellectual Property Office and the U.S. patent and Trademark Office. Among them, the Chinese corresponding patents on the terminal horizontal row injection molding technology have been declared invalid by the State Intellectual Property Office, and other relevant patents are still in the invalid examination stage.
In addition to the patent invalidation procedure, the company has also actively safeguarded the rights and interests of the company and the best interests of its customers in China by initiating the investigation procedure of the patent administration authority and court proceedings against Amphenol group, and ruled out unreasonable interference from its customers.
Luxshare Precision Industry Co.Ltd(002475) pointed out that this 337 investigation is a customs administrative review procedure (or quasi judicial procedure) and does not involve any patent damages. On the basis of the company’s existing response results, even if the 337 preliminary ruling is subsequently supported by ITC and the Federal Circuit Court of appeal, it will not have any material impact on the company’s current production and operation. In this regard, China Merchants Securities Co.Ltd(600999) commented that this also shows the technical strength of the company and opens up the growth space of subsequent enterprise communication.
2022 first quarter net profit increased by 25% – 30% year on year
On the evening of the 14th, Luxshare Precision Industry Co.Ltd(002475) also disclosed the annual performance express of 2021 and the performance forecast of the first quarter of 2022.
According to the performance express, in 2021, Luxshare Precision Industry Co.Ltd(002475) achieved a total operating revenue of 154.1 billion yuan, an increase of 66.60% year-on-year; The net profit was 7.072 billion yuan, a year-on-year decrease of 2.12%.
According to the above data, Luxshare Precision Industry Co.Ltd(002475) in 2021, “increasing income without increasing profit”. In this regard, Luxshare Precision Industry Co.Ltd(002475) explained that under the background of repeated global epidemics, in the face of the severe macroeconomic situation such as “lack of core and materials” in the upstream industrial chain, unilateral rise in raw material prices and transportation costs, as well as the delay of mass production and delivery time of some products, multiple factors led to the rise of the company’s operating costs, With the overall impact of the product profit margin of Likai precision on listed companies, the company’s comprehensive profit margin fell year-on-year.
During the reporting period, the company invested abroad and controlled Likai precision. Since 2021, in response to the large demand of customers for mobile phone precision display structure module products in the next few years, the business scale of Likai precision has shown rapid growth in the reporting period. However, due to the large initial investment in mobile phone precision display structure module products and the high proportion of materials in the product cost structure, the overall product profit margin of Likai precision has been greatly affected, It also has a certain impact on the profit margin of Luxshare Precision Industry Co.Ltd(002475) consolidated statements.
In addition, after experiencing the accelerated demand of the market and consumers for acoustic wearable products, the shipment of acoustic wearable products of the company showed a significant correction in 2021, which had a great phased impact on the year-on-year operating revenue and net profit of the company’s business. It is expected to stabilize as a whole in 2022.
It is noteworthy that Luxshare Precision Industry Co.Ltd(002475) ‘s performance resumed growth in the fourth quarter of 2021 after the year-on-year and month on month decline of single quarter net profit in the third quarter of 2021. Data show that in the fourth quarter, the company’s revenue reached 73.1 billion yuan in a single quarter, a significant increase of 122% year-on-year and month on month, and the net profit in a single quarter was 2.36 billion yuan, a significant increase of 48% month on month.
In the first quarter of 2022, the company expects a net profit of 1.687 billion yuan to 1.754 billion yuan, a year-on-year increase of 25% to 30%. The net profit after deducting non-profit was RMB 1.4 billion-1.46 billion, with a year-on-year increase of 20% – 25%.
China Merchants Securities Co.Ltd(600999) said that the growth rate of the company’s performance was further positive, which verified the judgment that the company had ushered in an operating inflection point from the fourth quarter of last year. Based on the current business inflection point and clear medium and long-term growth logic, the company is ushering in low-level layout opportunities, maintaining the “strongly recommended-a” rating and the target price of 60 yuan, and firmly optimistic about the company’s long-term space.
plans to raise 13.5 billion yuan to invest in consumer electronics + automobile business
On February 22 this year, Luxshare Precision Industry Co.Ltd(002475) issued a fixed growth plan to raise 13.5 billion yuan for consumer electronics and automobile business.
Specifically, among the funds raised this time, it is planned to invest 7 billion yuan in consumer electronics business, including intelligent wearable device production project (3.5 billion yuan), intelligent mobile terminal precision components (2.7 billion yuan) and intelligent mobile terminal display module (800 million yuan); It is proposed to invest 2 billion yuan in automobile business, including new energy vehicle high-voltage connection system (1.5 billion yuan) and intelligent vehicle connection system (500 million yuan); It is planned to invest a total of 950 million yuan in semiconductor advanced packaging and testing business. In addition, 3.55 billion yuan was used to supplement working capital.
Tianfeng Securities Co.Ltd(601162) said that the fixed increase project will help: 1) further expand the existing production capacity and lead the company’s business scale to a new level; 2) Strengthening the integration advantage of “parts module complete machine”, the system assembly of intelligent wearable devices, the production of advanced packaging and testing products and the production, construction and expansion of intelligent mobile terminal display modules will help to further strengthen the company’s ability to vertically integrate the supply chain; 3) Expand the production of new energy vehicle high-voltage connection system and intelligent vehicle connection system products, and grasp the development opportunities of vehicle electrification and intelligent transformation.
Citic Securities Company Limited(600030) believes that as the leader of China’s consumer electronics, the company continues to realize category expansion around key customers, from zero group to module to complete machine, from consumer electronics to communication and automobile, the medium and short-term performance growth is relatively certain, and the medium and long-term growth power is available.
On February 11, Luxshare Precision Industry Co.Ltd(002475) signed the strategic cooperation framework agreement with Chery holdings, Chery shares and Chery new energy in Wuhu. On the basis of the agreement, the company and Chery new energy intend to jointly establish a joint venture, specializing in the R & D and manufacturing of new energy vehicles, providing cutting-edge R & D, design, mass production platform and access to the sea for Luxshare Precision Industry Co.Ltd(002475) auto core parts business, and committed to realizing the company’s medium and long-term goal of becoming a leading manufacturer of auto parts tier 1.
This time, Luxshare Precision Industry Co.Ltd(002475) and Chery holdings and its affiliates jointly signed a strategic cooperation framework agreement, aiming to comprehensively strengthen the strategic layout of the company’s automobile business.
On the same day, Luxshare Precision Industry Co.Ltd(002475) controlling shareholder Lixun Co., Ltd. signed the equity transfer framework agreement with Qingdao Wudaokou, which agreed that Lixun Co., Ltd. would purchase 19.88% equity of Chery holdings, 7.87% equity of Chery shares and 6.24% equity of Chery new energy held by Qingdao Wudaokou with RMB 10.054 billion.
