From a low margin mobile phone ODM foundry to a hot A-share high-tech semiconductor manufacturer, the rise of Wingtech Technology Co.Ltd(600745) has always been talked about by the market.
M & A is the main means of Wingtech Technology Co.Ltd(600745) rapid expansion. In 2019, it became famous for its “snake swallowing elephant” acquisition of the world famous semiconductor company Anse group in World War I. after the acquisition, Wentai extended from ODM company to the field of upstream semiconductor devices. In 2021, the optical assets of Ofilm Group Co.Ltd(002456) were collected by Wingtech Technology Co.Ltd(600745) and the latter completed the extension of the industrial chain again.
In this process, a prominent phenomenon is that Wingtech Technology Co.Ltd(600745) is more and more deeply bound with apple.
After acquiring Ofilm Group Co.Ltd(002456) assets, Wingtech Technology Co.Ltd(600745) won Apple’s optical business with a high profile. Recently, Wen Tai received 5 billion orders for smart home projects, and the mysterious “overseas specific customers” once again led people’s attention to apple.
At present, Wingtech Technology Co.Ltd(600745) ‘s business includes semiconductor business, product integration business and optical business, with a total revenue of more than 50 billion yuan and a total market value of more than 130 billion yuan. No matter which business is carried out alone, it is enough to PK an independent A-share company. This phase of hard core investment and research attempts to completely disassemble this huge semiconductor company.
deepen binding with apple
From the three businesses of Wentai, product integration business and optical business are inextricably linked with apple.
Among them, Wentai has been included in the “fruit chain” through the optical business, which is mainly the R & D and manufacturing of camera modules.
In February 2021, the transferee of Ofilm Group Co.Ltd(002456) sale of assets announced that Wingtech Technology Co.Ltd(600745) would acquire 100% equity of Guangzhou delta Image Technology Co., Ltd., as well as the operational assets, intangible assets and inventories owned by Ofilm Group Co.Ltd(002456) and its holding company in China and abroad (except Guangzhou delta) related to the supply of cameras to specific overseas customers.
When the market was surprised that Ofilm Group Co.Ltd(002456) was removed from the apple industrial chain, Wingtech Technology Co.Ltd(600745) announced that the target assets are expected to obtain orders again after the transaction is completed through the factory audit of specific customers.
This makes this acquisition meaningful, and the market has speculated that Wingtech Technology Co.Ltd(600745) acquisition of the above assets is obviously based on a tacit understanding with apple.
It is worth noting that the above-mentioned operating assets acquired by Wentai include 776 related equipment, patents, technical data, technical secrets, drawings, manufacturing methods, process flows, formulas and other intangible assets, as well as inventories. In addition, 21st Century Capital Research Institute learned exclusively from relevant persons close to this transaction that ” Ofilm Group Co.Ltd(002456) some technicians have followed (Wen Tai).”
Patented technology also reflects some changes. According to the search of smart bud global patent database, Wingtech Technology Co.Ltd(600745) and its affiliated companies currently have more than 3200 patent applications. The patent layout is mainly concentrated in camera, display screen, smart phone and other related technical fields, of which more than 140 patent applicants are Ofilm Group Co.Ltd(002456) and its affiliated companies.
At the end of 2021, Wingtech Technology Co.Ltd(600745) disclosed that the sample products of Guangzhou Delta company acquired had been sent to specific overseas customers for final verification, and the products entered the stage of formal mass production and normalized batch shipment according to the agreed shipment plan.
As far as Wingtech Technology Co.Ltd(600745) is concerned, it is expected to bring 10 billion revenue thickening performance after taking the apple business revenue originally owned by Ofilm Group Co.Ltd(002456) into the bag.
According to the public information disclosed by Ofilm Group Co.Ltd(002456) disclosure, the company’s operating revenue from related businesses of specific customers in 2019 was 11.698 billion yuan. In 2020, Wingtech Technology Co.Ltd(600745) had a revenue of 51.71 billion yuan. After the above-mentioned targets are included, the revenue scale of Wingtech Technology Co.Ltd(600745) is expected to reach a higher level.
The product integration business has entered the fruit chain, which is the good news recently.
On the evening of March 10, Wingtech Technology Co.Ltd(600745) announced that the company had carried out computer, smart home and other business cooperation with specific overseas customers and signed cooperation agreements; Recently, the smart home project began mass production and realized normal shipment. The total amount of cooperation is expected to be about 5 billion yuan. It is said that this order involves product integration business.
According to Wingtech Technology Co.Ltd(600745) to 21st Century Capital Research Institute, the company’s product integration business is based on mobile phone ODM (mobile phone OEM) and expanded to tablet, laptop, IOT, server, automotive electronics and other fields. It is reported that the company’s previous shipments to apple were mainly products in the field of mobile and wearable devices.
Although Wen Tai said it was inconvenient to disclose the customer information and products involved in the order, according to various sources, the overseas customer also pointed to apple.
Major general Ding, an industry and Economic Observer and founder of nail technology, said in an interview, “according to Apple’s layout in the home field, smart home products may be one or more of speakers, lighting, cameras, doorbells, air detectors and other products.” But this does not mean that Wentai can rest easy. “Even if Wentai gets Apple smart home orders, the gross profit of product integration business is generally not high, not the cooperation in core devices, so the substitutability is also relatively high.”
semiconductor business has long been associated with apple
The semiconductor business of Wingtech Technology Co.Ltd(600745) has long been associated with apple.
Initially, Wingtech Technology Co.Ltd(600745) was known as ODM company. In 2016, it has become the largest ODM company in the world. However, Wingtech Technology Co.Ltd(600745) odm business is large, but its profitability is not strong. Profit pressure prompted Wingtech Technology Co.Ltd(600745) to actively transform. In 2018, Wingtech Technology Co.Ltd(600745) acquired ANSYS semiconductor and entered the semiconductor track.
Anse semiconductor (Anse for short), formerly known as the standard parts business division of nxpi. NASDAQ in the Netherlands, is a supplier of semiconductor standard devices. It is upstream of the electronic industry chain and its business is distributed in Asia, Europe and the United States. Its customers include midstream manufacturers and downstream electronic brand customers, including Bosch, Huawei, apple, Samsung, etc.
In 2017, Zhilu capital and Jianguang assets acquired NXP’s standard parts business for us $2.75 billion and renamed ANSYS semiconductor. In 2018, the public transfer of Anse’s main equity caused a number of enterprises to bid.
Wingtech Technology Co.Ltd(600745) said in October of that year that it would take 75.86% equity of Anse with RMB 25.154 billion.
At that time, the total market value of Wingtech Technology Co.Ltd(600745) was less than 20 billion yuan.
The “snake swallowing elephant” acquisition case has been questioned by many, including whether the high acquisition funds can be paid smoothly, whether the financing risk can be solved, and whether the value-added rate of Anse group as high as 154.80% is reasonable.
But judging from the results, the acquisition has brought changes to Wentai.
The transaction also allows Wingtech Technology Co.Ltd(600745) to join hands with apple. In October 2020 Wingtech Technology Co.Ltd(600745) said on the interactive platform that the company’s Anse group is the world’s leading standard device semiconductor IDM enterprise. The company’s products are widely used in automotive, wearable devices and other fields, and customers in mobile and wearable devices include apple.
The Pacific Securities Co.Ltd(601099) securities research report said that ” Wingtech Technology Co.Ltd(600745) will supply power devices for apple after the acquisition of Anson semiconductor in 2020″.
Backed by high-quality semiconductor assets, Wentai’s share price has made rapid progress. By the end of 2018, the market value of the company was about 20 billion yuan, and by the end of 2020, the market value had exceeded 100 billion yuan.
The greater contribution is also reflected in the company’s net profit Wingtech Technology Co.Ltd(600745) 2019 third quarter report said that ANSYS semiconductor is expected to be included in the consolidation scope in the fourth quarter of 2019, and the net profit will increase significantly. According to the annual report, the net profit growth rate of Wentai in 2018 was – 81.47%, and the net profit growth rate of the company in 2019 after the acquisition reached 195437%.
Today, the semiconductor sector has become the most profitable business of Wentai. The financial report of the first half of 2021 shows that the semiconductor business has achieved a revenue of 6.773 billion yuan, accounting for 27.34% of the total revenue and a net profit of 1.310 billion yuan, accounting for 66.6% of the total net profit of the parent company.
comprehensively expand the automotive field
In the previous research on the target of fruit chain, the market often expressed concern about the stability of apple supply chain. However, as far as Wingtech Technology Co.Ltd(600745) is concerned, the biggest difference is that it does not form a large dependence on apple. Its huge business volume determines that apple is only one of its many customers.
So what does Apple mean to Wentai?
Major general Ding said, “Wentai’s entry into the fruit chain is directly helpful to the improvement of brand value and revenue level, but it also brings some business risks, including difficulties in general use of special production lines, low ODM profit margin and insufficient core competitiveness, leading to high substitutability. Therefore, the diversified expansion of business and customers and advancing upstream of the industrial chain are still issues to be considered in the medium and long term.”
Lin Zhi, chief analyst of witdisplay, also pointed out in an interview with 21st Century Capital Research Institute, “Apple’s supply chain has the risk of being abandoned by apple, and Wingtech Technology Co.Ltd(600745) has no irreplaceable core technology. If you enter Apple’s supply chain, the focus is not profit, which can help the stock price more.”
If losing Apple customers may be a disaster for the targets of other fruit chains, winning Apple customers is just “icing on the cake” for Wingtech Technology Co.Ltd(600745) .
From a larger perspective, consumer electronics, including apple, is just a corner of Wingtech Technology Co.Ltd(600745) downstream applications, and its automotive electronics business is bringing more imagination.
The 21st Century Capital Research Institute previously reported that since 2020, the lack of core in the automotive industry has triggered a global chain reaction, especially the trend of automobile electrification and intelligence, and the demand for vehicle specification semiconductors has further increased.
From the perspective of the company’s profits and recent action layout, the semiconductor business with Anse as the main body is making more achievements for Wingtech Technology Co.Ltd(600745) contribution. In the first three quarters of 2021, anser’s profitability reached an all-time high.
In terms of downstream applications, the automotive sector, including electric vehicles, is the main source of revenue for Wingtech Technology Co.Ltd(600745) semiconductor. According to last year’s interim report, Anse’s revenue from automobile, mobile and wearable equipment, industry and electricity, computer equipment and consumption accounted for 45%, 22%, 22%, 6% and 5% respectively.
According to Tianfeng electronics, Anshi’s core downstream customers include Bosch, Byd Company Limited(002594) , Continental, Delphi and other automobile factories.
Relying on Ansteel, Wentai increased investment in new products and expanded production capacity in the automotive semiconductor expansion strategy on the one hand.
In March this year, Wingtech Technology Co.Ltd(600745) had a business breakthrough. It was announced that anser established the China Research Institute in 2021 to focus on the R & D direction of new products such as high-voltage power devices and analog IC. At present, the series of insulated gate bipolar transistors (IGBT) independently designed and developed by anser have been successfully streamed.
Huatai Securities Co.Ltd(601688) said that the R & D investment of Wingtech Technology Co.Ltd(600745) semiconductor business segment is expected to reach more than 15% in the next few years, mainly in the fields of medium and high voltage MOSFET, third-generation semiconductor and IGBT.
In addition to the research and development of new products, Wingtech Technology Co.Ltd(600745) intensively expanded the production capacity of vehicle wafers under the environment of lack of core.
In April 2021 Wingtech Technology Co.Ltd(600745) announced that it would invest 12 billion yuan to build a 12 inch vehicle scale wafer factory in Shanghai to produce discrete devices such as power chips and transistors for electric vehicles. The plant is expected to be put into operation in July 2022, with an annual capacity of up to 400000 wafers. It is reported that a number of new energy vehicle enterprises have gathered around Shanghai Lingang Holdings Co.Ltd(600848) City, including Tesla, SAIC, Yanfeng automobile, etc.
Wingtech Technology Co.Ltd(600745) chairman Zhang Xuezheng previously announced the company’s goal in an interview and planned to promote the output value of ANSYS semiconductor to exceed US $10 billion in 10 years.
Wentai’s other two businesses are also expanding to the automotive field.
Wingtech Technology Co.Ltd(600745) said that in 2022, the product integration business will not only improve the mobile phone business, but also significantly contribute to the laptop, server, IOT (such as TWS headset and smart watch) and automotive electronics business. The optical business will also expand from a single customer to multiple customers, covering mobile phones, laptops, IOT, car cameras and other fields.
Huatai Securities Co.Ltd(601688) believes that Wingtech Technology Co.Ltd(600745) odm and optical module business is expected to gradually increase the market share of specific customers, gradually expand to new fields such as servers and automobiles, and become one of the core suppliers of front and rear camera modules for specific customers. The revenue in 2025 is expected to grow by 78.4% compared with 2020.
