After leaving the apple industry chain, Ofilm Group Co.Ltd(002456) ( Ofilm Group Co.Ltd(002456) . SZ) is working on the smart car business.
Recently, 21st Century Capital Research Institute noted that Ofilm Group Co.Ltd(002456) frequently replied to investors’ topics related to automobile business on the interactive platform. It said that the company’s on-hand orders related to intelligent automobile business have increased rapidly, and has obtained the qualification of first-class supplier of more than 20 Chinese automobile enterprises.
At the 2021 annual performance presentation held recently, Ofilm Group Co.Ltd(002456) executives also said: “the company takes the smart car business as the key business area, increases the resource allocation from R & D, marketing and production, and strives to achieve the industry-leading scale of smart car business revenue by 2025.”
As the leader of the “fruit chain”, how did Ofilm Group Co.Ltd(002456) perform in the first report card after leaving apple? Can the automobile business form new support? Is the new exit right ahead?
smart car business stands out
Consistent with market expectations, Ofilm Group Co.Ltd(002456) performance is still in a “painful period”. According to the data, Ofilm Group Co.Ltd(002456) achieved a revenue of 22.844 billion yuan in 2021, with a significant year-on-year decrease of 52.75%, and a net profit loss of 2.625 billion yuan, which has been losing for two consecutive years.
In the first quarter of 2022, the net profit of Ofilm Group Co.Ltd(002456) revenue fell again, the operating revenue decreased by 37.65% year-on-year to RMB 4.593 billion, the net profit attributable to the parent decreased by 341.33% year-on-year, and the loss was RMB 186 million.
The company explained in the annual report that the decline in performance was affected by many factors. First, it terminated the procurement relationship with specific overseas customers; The smartphone business of customer h was subject to restrictions such as chip supply interruption, resulting in a sharp year-on-year decline in the shipment of many products of the company; The company arranges optical and optoelectronic businesses of products in new fields such as smart cars, smart homes, VR / AR, industry, medical treatment and sports cameras, with large R & D investment; In addition, there are investment losses, provision for asset impairment, etc.
According to the financial report, Ofilm Group Co.Ltd(002456) has three product series: optical and photoelectric products, microelectronic products and intelligent automobile business. Among them, only the smart car business has achieved performance growth, while the other two core businesses are declining.
Among them, Ofilm Group Co.Ltd(002456) the largest business optical optoelectronic products achieved a revenue of 16.454 billion yuan, a year-on-year decrease of 55.07%, microelectronic products achieved a revenue of 5.093 billion yuan, a year-on-year decrease of 46.11%, and the two products contributed more than 90% to the total revenue.
Smart car products outstripped others, with a revenue of 1.025 billion yuan, a year-on-year increase of 32.02%. However, this business accounted for only 4.49% of the total revenue in 2021 and 1.61% in 2020. In addition, it should be noted that the gross profit margin of the business in 2021 was 1.48%, compared with 15.71% in the same period last year.
For the decline of gross profit margin, the company explained at the recent investor meeting, “the global chip supply continues to be tight, the smart car industry has problems such as rising raw materials and supply shortage, and the market competition is becoming increasingly fierce. The above factors have an impact on the gross profit margin.”
It is not difficult to see from the above financial data that Ofilm Group Co.Ltd(002456) smart car business is developing rapidly, but its contribution to the company as a whole is still small.
automotive electronics layout
In fact, Ofilm Group Co.Ltd(002456) had expanded in the field of smart cars long before it left the apple industrial chain. According to the 21st Century Capital Research Institute, the company established Shanghai Oufei intelligent car service Co., Ltd. in 2015.
In March 2016, Ofilm Group Co.Ltd(002456) participated in BAIC new energy company and became a Tr1 supplier of BAIC new energy. In June of the same year, he acquired East China steam and power and Nanjing Tianqing. In November of the same year, the company completed a non-public offering, raising 1.367 billion yuan, of which 800 million yuan was invested in the construction project of intelligent automobile electronics.
According to the Ofilm Group Co.Ltd(002456) acquisition announcement, East China auto power focuses on the R & D and sales of auto parts, and its products involve body electronics, active and passive safety, energy management, Internet of vehicles and other fields. With the qualification of front loading supplier from more than 20 high-quality vehicle manufacturers, it is a Saic Motor Corporation Limited(600104) strategic partner and a core supplier of BAIC group. It maintains long-term close cooperation with Guangzhou Automobile Group Co.Ltd(601238) , Anhui Jianghuai Automobile Group Corp.Ltd(600418) , Shanghai GM and other customers.
At that time, according to the analysis of people in the industry, the biggest threshold for electronic hardware manufacturers to cut into automotive electronics is the supply channel of vehicle manufacturers, which can only be secondary and tertiary suppliers, with weak dominance and voice. The acquisition not only complements Ofilm Group Co.Ltd(002456) the product line in the field of automotive electronics, but also quickly introduces other product lines based on the excellent qualifications and teams of East China automobile power and Nanjing Tianqing.
In 2018, Ofilm Group Co.Ltd(002456) acquired Fuji Tianjin lens factory, including 985 patents and patent application rights related to Fuji film’s mobile phone, vehicle lens and camera; Fuji China has 55 patent licenses in the fields of mobile phones, car lenses and cameras.
Statistics show that Fuji Tianjin is a company responsible for the manufacturing and sales of various optical products dominated by vehicle lens operated by Fuji film worldwide. This acquisition is mainly to improve the company’s design and production capacity of vehicle lens.
After several years of development, Ofilm Group Co.Ltd(002456) automobile field is divided into three branches: intelligent central control, ADAS (intelligent driving) and body electronics.
In terms of intelligent driving system, there are car camera, millimeter wave radar, lidar and other products; In terms of intelligent central control, we have developed intelligent cockpit and all digital intelligent instruments. The 2019 annual report disclosed that we have mass produced the self-developed dual screen intelligent cockpit system. Ultrasonic fingerprint recognition and face recognition are also applied in the intelligent central control system.
Body electronics is working on software and producing its own hardware at the same time on May 18, Ofilm Group Co.Ltd(002456) disclosed to 21st Century Capital Research Institute, “The company continues to decouple the software and hardware of smart cars. Under the condition that the hardware remains unchanged, it can carry out OTA upgrading and continuous evolution of software. In addition, it actively carries out the development of SOA architecture to meet the design needs of more service-oriented architecture of main engine manufacturers in the future. The revenue of body electronics sector has increased steadily, and the customer group covers major Chinese independent brand manufacturers and some joint venture OEM manufacturers.”
optical business based
The 21st Century Capital Research Institute previously pointed out in several reports that there are inherent advantages and foundations for the transformation of consumer electronics manufacturers into automotive electronics. As far as Ofilm Group Co.Ltd(002456) ‘s resource endowment is concerned, the on-board camera is the basis for its layout in the field of intelligent vehicles.
According to the analysis of a Securities researcher, ” Ofilm Group Co.Ltd(002456) used to start with consumer electronics, which is very suitable for making vehicle parts. There are technical genes. It depends on the extent to which he can achieve. Generally, the overall gross profit margin of vehicle parts is stable at 15% – 20%.
”
The company disclosed that the progress of vehicle mounted camera products is obvious, Ofilm Group Co.Ltd(002456) 2m forward-looking three eyes and 8m forward-looking two eyes will be mass produced soon; 3M and 8m perimeter rear view cameras have been mass produced; 1m and 2.5m look around cameras have been mass produced; 2m electronic exterior rearview mirror camera with heating function has been mass produced; DMS and OMS cameras in the cabin, 1m and 2m have been mass produced, and 5m is under development. In addition, the event driven camera module is also under close development.
From the perspective of prospect, the market of on-board cameras is relatively broad. According to yole data, the global average number of lenses per vehicle will increase from 1.5 in 2018 to 3 in 2023. In the future, on-board lenses will contribute significantly to the lens industry. According to allied market research, the global car camera market was about US $11.4 billion in 2017 and is expected to reach US $24.1 billion in 2025, corresponding to a compound growth rate of 9.7% from 2018 to 2025.
However, at an investor meeting in December last year, Ofilm Group Co.Ltd(002456) admitted that the pixels of the company’s car camera and lens products ranged from 1mp, 2MP, 5MP and 8mp, but from an industry perspective, the pixels of the car lens were still at a low level compared with those of the smartphone lens.
Some analysts also pointed out that, “compared with consumer electronics, the requirements for software and hardware of vehicle specification level cameras are extremely strict, and the barriers to entry are high. Entering the automotive industry must have a variety of certification standards, and it takes about 2 to 3 years for manufacturers to enter the supporting system of vehicle manufacturers. In addition to obtaining certification, entering the automotive front loading market requires a lot of capital and R & D time from market promotion to signing contracts and mass production.”
In addition to the automotive business represented by the on-board camera, Ofilm Group Co.Ltd(002456) is also comprehensively upgrading the optical business. “Based on the steady development of the optical industry, the company will accelerate the development of innovative businesses such as smart cars and new fields, extend upstream of the industrial chain, explore new markets, and build a business architecture system of smart phones, smart cars and new fields.” Ofilm Group Co.Ltd(002456) relevant person in charge told 21st Century Capital Research Institute.
The latest reply on the interactive platform shows that the company also intends to catch the express train of “meta universe”. It said that it has established a meta universe business department to be responsible for the assembly and manufacturing of optical lenses, image modules, optical and mechanical modules and complete machines in the field of VR / ar.
From the current strategic layout of Ofilm Group Co.Ltd(002456) the company is actively expanding more business applications and extending to the upstream of the industrial chain. However, it still needs time to verify the effectiveness.
