On April 15, Shannon Xinchuang ( Anhui Julong Transmission Technology Co.Ltd(300475) ) released its annual report for 2021. During the reporting period, the listed company achieved an operating revenue of 9.206 billion yuan, a year-on-year increase of 337671%; The net profit was 224 million yuan, a year-on-year increase of 247.76%; Earnings per share was 0.53 yuan, a year-on-year increase of 247.13%.
In July 2021, Shannon Xinchuang completed a major asset restructuring, which is the first annual report of Shannon Xinchuang after the asset restructuring. The annual report combines the performance of Lianchuang Tai in the second half of the year.
Since July last year, lianchuangtai has been included in the consolidated statement of Shannon Xinchuang, and its main business has changed from the deceleration clutch of washing machine to the distribution of electronic components. The market competition of the original business washing machine deceleration clutch is becoming more and more fierce. Although the products are medium and high-end, protected by patents, and the customer trust of the downstream washing machine is high, the core patent of the company’s dual drive deceleration clutch has expired on April 1, 2022, and the gross profit margin of the company’s medium and high-end products is still at risk of decline. After the merger and acquisition, the integration progressed smoothly. During the reporting period, the distribution revenue of electronic components accounted for more than 96% of Shannon core’s revenue. The company successfully realized business transformation.
In 2021, the global semiconductor market achieved substantial growth. According to the report released by the American Semiconductor Industry Association (SIA) on February 14, 2022, the global semiconductor market reached US $555.9 billion in 2021, a year-on-year increase of 26.2%, a record high; China remains the world’s largest semiconductor application market, with total sales reaching US $192.5 billion in 2021, a year-on-year increase of 27.1%; In terms of semiconductor category, memory chip is one of the categories with the highest total sales, reaching US $153.8 billion, a year-on-year increase of 30.9%.
According to public data, SK Hynix, Shannon core’s main partner, also achieved a new high in 2021. The annual consolidated revenue was about US $34.9 billion, a year-on-year increase of 35%, and the operating profit was about US $10.1 billion, a year-on-year increase of 148%, of which the storage chip business accounted for more than 90%.
Looking forward to the future, Shannon Xinchuang aims to create an innovation ecology of the whole industrial chain of high-end semiconductors. The distribution of electronic components is an important link in the whole electronic components industry chain. The wholly-owned subsidiary United ChuangTai has worked deeply in this field. It is China’s leading high-end technical service platform for electronic components, provides demand matching, inventory buffer and information value for the whole industry, and maintains good cooperative relations with upstream and downstream customers; The joint-stock companies Haoda electronics, Yongsi electronics, micro conductive nano technology and Bi Ren technology are also excellent enterprises in various subdivided fields. From upstream materials, design and manufacturing to downstream application and consumption, Shannon Xinchuang has gradually built a virtuous cycle ecosystem, effectively promoting the wide flow of knowledge, information and capital in the industrial chain.
Since 2020, Shannon Xinchuang and its subsidiaries have participated in a number of semiconductor companies, involving a variety of links in the semiconductor industry such as design, packaging and testing, equipment and so on.
Shannon Xinchuang plans to expand and strengthen its main business in the future, gradually become a leading international electronic component distribution enterprise, actively explore the possibility of cooperation between the company and the invested enterprise, broaden the company’s agent product line, and learn from the successful experience of the invested enterprise, so as to lay a foundation for the company’s future extension to the upstream and downstream of the semiconductor industry chain. There will be no new equity investment business in the future, but if there are new establishment and M & A opportunities with Industrial Synergy around the upstream and downstream of the industrial chain to obtain technology, raw materials or channels in line with the company’s main business and strategic development direction, the company will implement them after fulfilling the review procedures and information disclosure obligations. For the equity investment currently held by the company and its holding subsidiaries, it is planned to gradually sell the equity in due time according to the repayment plan of M & A loans and the situation of the invested enterprises.
According to the Research Report of Ping An Securities, compared with the international market, the market shares of global industry concentration CR3, CR10 and Cr20 are 14.72%, 18.40% and 19.36% respectively, and only 2.41%, 5.22% and 6.84% in China. There is still huge development space for local distribution manufacturers. From the development path of chip enterprises such as iResearch electronics and Will Semiconductor Co.Ltd.Shanghai(603501) etc., there is also huge space for horizontal and vertical M & A integration in China’s distribution industry in the future.
