5G Business Outbreak Eve: Capital Hungry, Senior Executives, Mobile Phone Industry Chain Shock Intensified

In June 18th, a few days ago, the interactive reply made ZTE's H-share price soared. Due to the setting up of the price limit, the H-share price rose by about 22% as of the end of the day, and the A share price also hit a 9.48% gain.

This is due to the introduction of ZTE's public investors' progress in chip design. ZTE said, "the company has chip design and development capabilities, 7Nm chip scale production, has been commercially deployed in the global 5G scale deployment, 5nm chip is technology import."

Although this is a very old news, ZTE is only a regular reply, but it will undoubtedly show that the underlying technology reserve to 5G is the direction of market enthusiasm.

Mobile phone industry chain manufacturers have quietly opened up their reserves. In twenty-first Century, the economic news reporter found that since the beginning of this year, the head mobile phone supply chain listed companies have launched frequent and multi-channel financing steps, including the issuance of long and short term corporate bonds, fixed increase, etc., and the industry chain company has completely replaced the business deployment which is no longer suitable for the 5G era after the completion of the acquisition.

At the same time, some enterprises have launched a shift to key executives. Cai Rongjun, the "soul figure" of Ophelia, recently announced his resignation as chairman of the board. The successor was Zhao Wei, the general manager of the post-80s generation. The adjusted ZTE terminal office ushered in the new general manager, Ni Fei, who was also the president of ZTE's brother brand Nubia.

In the test of the key nodes transferred to 5G and the superimposed epidemic on the industrial chain in the first half of the year, this series of actions has become meaningful. What are the signs of these dynamics in industry chain manufacturers?

Behind the frequent financing

This year, mobile phone industry chain manufacturers are particularly active in the capital market, which is in sharp response to the frequent adjustment of the industry chain orders by terminal manufacturers during the epidemic.

Judging from the announcement recently disclosed, GoerTek TWS, the key manufacturer of the TWS headset, has completed its 6 year, Switching Company bond which does not exceed 4 billion yuan. ZTE has completed the issuance of 7 billion yuan ultra short term financing since March this year, and has completed the 13 billion fixed year increase that has been delayed for many years. Ou Feiguang, Dongshan precision and so on also announced the fixed increase plan during this period.

From the announcement, we can see that behind the frequent financing is closely related to 5G's remolding of the industrial chain ecology and the increasingly urgent demand for new technology iteration.

In the analysis of the necessity of issuing convertible bonds, GoerTek pointed out that as Chinese manufacturers increasingly become an important participant in the global consumer electronics field, the original EMS/OEM (OEM) industry mode is gradually replaced by JDM (joint design and manufacture) mode. This requires China's consumer electronics industry to increase investment in R & D and enhance its position in international industrial competition.

At the same time, in the era of 5G, AR/VR will have great development as an important 5G application terminal. Mastering the development and manufacture of its core components will determine the success or failure of China's AR/VR industry.

ZTE's issuance of ultra short term financing coupons is different from each other, but basically it refers to the two directions of repaying company bank financing and replenish working capital.

On the way to the 13 billion increase in the near future, the company also points out that about 9 billion 100 million yuan will be used for technology research and product development projects for the evolution of 5G network, and 3 billion 900 million yuan will be used to supplement liquidity.

On the whole, there is no need to expand 5G oriented technology deployment and terminal applications. As for the industrial chain, the greater impact has hit the original hardware ecosystem, which is not only related to the change of the foregoing research and development mode, but also once caused some metal structure manufacturers to face a survival crisis.

"A few years ago, driven by Apple mobile phones, the structure of mobile phones shifted from the plastic back cover to the metal back cover, which directly led to the collapse of many manufacturers. The most popular sensation was HUAWEI's first level supplier, Fu Chang electronics." An industry insider told reporters that it seemed to be a tiny change in the shape of the phone, but in fact it had a huge impact on the whole industry.

Today, the new challenges are opened again, and the rear cover of the metal is "not fragrant". The glass back cover has become a new trend. Metal structure manufacturers urgently need to find the next direction of development.

For example, just recently announced the structural plan of the fixed increase plan, the manufacturer is smart, and has just crossed the threshold. The company recently announced that it will be renamed "Genesis", which has completed the acquisition of rival intelligence in recent years. According to the company's announcement, Jinsheng will put the core of its business into developing high-end intelligent equipment business and cultivate intelligent manufacturing service business, and integrate the divestiture of consumer electronic precision structural business.

Senior management considerations

Since the adjustment of business has become the inevitable effect of the 5G spring tide, then some of the executives will also open new adjustments to meet the needs of industrial innovation and explore business models.

As a link of Apple's ecological chain, Ou Feiguang has attracted close attention from industry in recent years, regardless of business deployment, financing behavior, renamed or even chairman changing.

So after the announcement of the chairman's change notice, the industry once appeared, "is Ou Feiguang still the Ou Feiguang?" Question. You know, the industry generally believes that former chairman Cai Rongjun led Ou Feiguang out of the 10 years of high growth, the 5G node adjustment, it is inevitable that there are concerns.

Moreover, after the new and old product line business has been gradually adjusted, Ophelia is still under great pressure. In the announcement, the company pointed out that from 2017 to the end of the first quarter of this year, the debt ratio of the company continued to be within the scope of 70%-77%, which belonged to a higher level.

It is explained that this is related to the continuous expansion of the company's business scale in recent years, but sustained high liabilities may also reduce the overall competitiveness of the company. In order to maintain the long-term stable development of the company, it is necessary to meet the capital needs of the company in the form of equity financing and enhance its ability to resist risks.

In response, Sun Yanbiao, President of the first mobile phone Research Institute, believes that Ou Feiguang's actions are more like giving new people more opportunities. After all, Zhao Wei joined the company in 2005. He was promoted from the position of deputy general manager to the general manager at the beginning of this year.

According to Ou Feiguang's disclosure, although Cai Rongjun resigned, he still worked in the company, mainly responsible for leading the company's Central Academy of research to carry out business innovation and product technology upgrading, showing the importance of the company executives to focus on future exploration of innovative business.

ZTE's terminal business line executives understand better. Statistics show that Ni Fei, a successor, joined ZTE in 2001, and participated in the establishment of Nubian brand in 2012. He has sufficient experience both in the open market and in the market dominated by overseas operators.

Terminal business as an indispensable part of 5G ecological closed-loop, although it has been adjusted in recent years, it is still highly valued by ZTE. With the opening of 5G ecosystem, this will open up a larger emerging market system besides mobile phones.

Previously, Xu Feng, senior vice president of ZTE and President of terminal business division, briefed reporters on twenty-first Century economic report. ZTE will continue to invest in terminal technology innovation, focusing on the two major development directions of communication capability and video algorithm. Besides mobile phone products, mobile broadband Internet products and IoT products will also be promoted.

Sun Yan Biao told reporters that the minority brand Nubia has been playing the title in the game cell phone market in recent years, showing that under the leadership of Ni Fei, the vitality of the new brand can be opened. The exchange of terminal business lines will open up the imagination for ZTE to get rid of the traditional mode of operators.

5G+ challenges in the future

Sun Yan said to the twenty-first Century economic report reporter that the spread of the first quarter of the epidemic caused the shipments of the mobile phone manufacturers to be sluggish and sales declined. The decrease in terminal revenue will inevitably be transmitted to the capital chain level. For the industry chain manufacturers, it means that the payment and settlement cycle is prolonged and the cash flow is relatively tight in the short term.

This is one of the reasons why manufacturers are doing so frequently this year. But Sun Yanbiao pointed out that for some manufacturers, this is also a good time to expand against the trend. "For example, smart watches, TWS headphones and other industries are emerging market growth points outside the mobile terminal market. In order to match these new business needs, the industry chain will match the expansion and financing actions."

Standing in the middle of 2020, the current node needs to go all the way to the hardware industry chain.

Since the beginning of this year, many changes have taken place in the macro conditions. The epidemic has prolonged the pace of expansion of the terminal manufacturers, and the global consumption sentiment is still gradually improving. In the current most concentrated and fierce competition in China, the market is hard to grow again, which is bound to make the whole industry chain face the Matthew effect.

Therefore, in such a complex environment, balancing the R & D capability and financial strength and expanding the new ecological closed-loop is a new topic for all manufacturers.

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