As a well-known enterprise in Apple’s industrial chain, Yang Jianwen and his wife, the founders of Bourne optics, are very low-key. They rarely accept media interviews and attend activities. How the company developed into a global leader in mobile phone screen glass and won large orders from terminal manufacturers such as apple and Samsung is a mystery to the outside world. With the disclosure of the prospectus, the “secret” company gradually surfaced.
From 2021 to 2022, Bourne optics, which continues to sprint the listing process, has set many firsts in the industry. Frost Sullivan data show that in 2020, Bourne optics is the world’s largest provider of smart device appearance, structure and module solutions by shipment value, accounting for 17.6% of the market share.
It is worth noting that at present, Bourne optics still has some hidden worries. For example, too much reliance on a single business and the top five customers. In addition, some risk events have also become important and difficult issues in front of Bourne optics: becoming the person to be executed; Failure to pay housing provident fund for employees as required, and casualties caused by accidents.
company’s six-year listing has been bumpy
According to the official website of the Hong Kong stock exchange, Biel crystal Holdings Limited (hereinafter referred to as Bourne Optics) submitted a listing application at the Hong Kong Stock Exchange on January 31, 2022 and plans to be listed on the main board of Hong Kong. The co sponsors are JPMorgan Chase, HSBC and China International Capital Corporation Limited(601995) . It is understood that the raised funds will be used not only for the development of new materials, new technologies and new businesses, but also for the development of automobile related businesses. Earlier, Bourne optics submitted a listing application to the main board of the Hong Kong Stock Exchange in July 2021.
Public information shows that Bourne optics was founded by Yang Jianwen and his wife Lin Huiying. It is a Hong Kong funded private enterprise with a company history dating back to 1987. At that time, Yang Jianwen established a production plant in Shenzhen, Guangdong Province to produce glass cover sectors for mechanical watches. In 1992, Fuji optics Co., Ltd., the predecessor of Bourne optics, was incorporated in Hong Kong.
At present, the main business of Bourne optics is the production of mineral glass panel, touch screen, camera optical glass, mobile phone metal shell and other products. In addition to supplying screens for Apple mobile phones, Bourne optics is also a supplier of Samsung, Google, Xiaomi and other enterprises. Its products are used in smart phones, tablets, AR / VR glasses, automobiles and other fields.
Looking back on the development of Bourne optics, plastic cover sectors were still widely used in mobile phones at the beginning of this century, but Bourne optics began to explore the use of glass cover sectors on mobile phones to improve their durability. This has brought new business opportunities to Bourne optics. In 2004, Bourne optics received an order from Motorola for 1 million pieces of mobile phone glass cover. Since then, the company’s business focus has shifted to providing glass cover solutions for mobile phones.
In 2007, Bourne optics ushered in the opportunity of development and growth. That year, when Apple launched the first generation iPhone, Bourne optics established a business relationship with it and provided components for iPhone products. Since then, in view of the increasing demand for glass cover sector solutions from downstream terminal manufacturers and in order to improve production capacity, Bourne optics began to expand its production and operation in Shenzhen to Huizhou City, Guangdong Province.
In 2008, Bourne optics invested more than 3 billion yuan to build Huizhou Industrial Park; In 2016, the total output value of Bourne optics has exceeded 40 billion yuan, with a total plant area of more than 1.2 million square meters in Shenzhen and Huizhou, and a total of more than 100000 employees in both places.
At present, the strongest competitor of Bourne optics is Lens Technology Co.Ltd(300433) , while Zhou Qunfei, the founder of Lens Technology Co.Ltd(300433) has a close relationship with Bourne optics. Some media reported that Zhou Qunfei worked in the Yang family business for many years and founded Lens Technology Co.Ltd(300433) . In March 2015, Lens Technology Co.Ltd(300433) expanded production capacity by listing on GEM, and Zhou Qunfei once became “China’s richest woman”.
It seems that in order to cope with the competition brought by Lens Technology Co.Ltd(300433) listing, Bourne optics also decided to go public a few months later. However, compared with Lens Technology Co.Ltd(300433) , the listing of Bourne optics is a bumpy road. At the beginning of 2016, Yang Jianwen confirmed that the company had officially launched the IPO project and was expected to raise US $2 billion by the end of 2016. However, Apple’s sales were poor that year, and Bourne optics’s listing plan was blocked.
Perhaps affected by Apple’s orders, Bourne optics’s listing plan has been delayed again and again. Until July 2021, Bourne optics made another sprint for IPO.
mobile phone cover sales decline year by year
In terms of financial data, for 2019, 2020 and 2021 as of March 31, the operating revenue of Bourne optics was HK $31.622 billion, HK $27.463 billion and HK $29.913 billion respectively, and the corresponding net profit was HK $1544 million, HK $1.850 billion and HK $3.160 billion respectively. For the six months ended September 30, 2021, the company’s revenue was HK $15.012 billion and the corresponding net profit was HK $1.52 billion.
Compared with its competitor Lens Technology Co.Ltd(300433) , Bourne optics still lags behind. From 2019 to 2021, the revenue of Lens Technology Co.Ltd(300433) was 30.26 billion yuan, 36.94 billion yuan and 45.286 billion yuan respectively; The net profit was 2.469 billion yuan, 4.896 billion yuan and 2.088 billion yuan respectively.
In this regard, a brokerage analyst who did not want to be named said that Bourne optics is more conservative about expansion and its business unity is higher than Lansi. “At present, Lens Technology Co.Ltd(300433) has made a lot of other products and assemblies”.
In terms of products, the smart phone cover solution is the main source of revenue for Bourne optics. The proportion of revenue in the reporting period (for the years ended March 31, 2019, 2020 and 2021 and the six months ended September 30, 2021) was 71.4%, 74.3%, 68.6% and 67.9% respectively; The second and third largest businesses are wearable device cover and tablet cover, but the proportion of revenue is still relatively low.
However, from the perspective of product sales of smart phone cover, the business has begun to show saturation compared with the other two products. In 2019, 2020 and 2021 (the fiscal year ending March 31) and the first half of 2021 (the six months ending September 30), the company’s smartphone cover sales fell year by year, corresponding to 504 million pieces, 481 million pieces, 476 million pieces and 242 million pieces respectively. The company said that the decrease from 504 million to 481 million was mainly due to the reduction of customer demand and orders and the impact of covid-19 pneumonia.
In addition, during the reporting period, the purchase volume of Bourne optics’s top five customers accounted for 83.9%, 83.8%, 82.7% and 82.8% of the company’s total revenue in each year / period, all exceeding 80%; The purchase amount of the first two major customers in each year / period accounts for 60%, 63.7%, 70.3% and 74.5% of the company’s total revenue respectively. The company’s “major customer dependence” is more obvious.
In this regard, Bourne optics admitted in the prospectus that the company generally did not obtain the long-term commitment of the actual quantity of products to be purchased by the customers and the renewal of the contract must be agreed and approved by both parties. There is no guarantee that the customers will continue to purchase products at the existing level or on terms favorable to the company or will not purchase products at all. If the terms of contracts or purchase orders between the company and major customers change significantly, the company’s sales volume may fall sharply, which may have a significant adverse impact on the company’s business, operating performance, financial condition and prospects.
In order to prevent risks, Bourne optics said in the prospectus that the company is actively improving its scientific and technological strength, gradually getting rid of its dependence on mobile phone cover sectors, following the development of emerging industries, increasing the research and development of new technologies and materials, actively exploring the application of new materials such as metal, sapphire and ceramics in the automotive field, and has layout in the research and development fields of precision instrument screens such as driverless imaging and optical radar.
“In the mobile phone industry, Apple’s supply chain can’t run away from relying on apple. This is a common problem in the global supply chain. The only way out is to enter other application fields.”
frequent and serious business risks
In addition to the business performance, the most important and difficult problem in front of Bourne optics may be the frequent business risks.
The main production bases of Bourne optics are Bourne optics Shenzhen and Bourne optics Huizhou. According to the data of qixinbao, the business risks of the two companies are relatively serious.
On March 2, 2022, the people’s Court of Huiyang District, Huizhou City, Guangdong Province listed Bourne optics (Huizhou) Co., Ltd. as the executee, and the subject matter of execution was about 2.7443 million yuan. As of March 18, the company involved 141 judicial cases, mostly sales contract disputes.
The situation of Bourne optics (Shenzhen) is similar to that of Bourne optics (Huizhou). According to the data of qixinbao, at present, Bourne optics (Shenzhen) involves 130 judicial cases, of which 44.54% are related to Shenzhen housing provident fund management center. This is because over the years, Bourne optics has not paid or fully paid the housing provident fund for its employees as required.
Bourne optics explained in the prospectus that the benchmark adopted by Bourne optics (Shenzhen) to calculate the contribution amount of housing provident fund did not comply with applicable laws and regulations, so Bourne optics (Shenzhen) did not pay full housing provident fund for employees. In addition, Bourne optics (Huizhou), Bourne precision (Huizhou), Bourne hi tech, Tongliao Seiko and Bourne Chuangsheng did not pay housing provident fund for their respective employees.
Bourne optics stressed: “once employees agree that we pay relevant contributions for them, we will actively arrange and pay housing provident fund for employees in accordance with applicable laws and regulations and local practices and policies. 2019 ~ 2021 (March 31) And on September 30, 2021, Bourne optics made provisions of HK $412 million, HK $383 million, HK $403 million and HK $381 million respectively for our failure to pay the full housing provident fund. We will correct the non-compliance related to the payment of housing provident fund contributions, and pay the insufficient amount of housing provident fund contributions in time at the request of relevant authorities in the future, so that relevant authorities will not impose any punishment on our non-compliance. “
In addition, Bourne optics has also had production safety responsibility accidents. Huizhou Huiyang District Emergency Management Bureau issued the investigation report on the “9.19” electric shock accident of Bern optics (Huizhou) Co., Ltd. in 2019, which said that a personnel electric shock accident occurred in the No. 6 sewage treatment station of Bern optics (Huizhou) Co., Ltd., resulting in one death and a direct economic loss of 137787 yuan, which was recognized as a general production safety liability accident.
For how to reduce the dependence on the company’s top five customers and how to improve the existing risk problems in operation, the reporter called Bourne optical’s official website, and the operator claimed to be the front desk. “You have a number. I can transfer it for you. You don’t have it and I don’t have it.” The other party said. Subsequently, the reporter sent relevant questions to the company’s email, but as of press time, no response has been received.
