Wentai Technology'S "Ambition" And "Hidden Trouble" Of 2.42 Billion In Apple'S Industrial Chain

Although ofight has been confirmed to be removed from the industrial chain by apple, Wentai technology is determined to acquire the assets of "supplying camera related business to specific overseas customers".

On the evening of March 29, Wentai technology announced that it had signed a relevant agreement with ofight on the same day, intending to purchase 100% equity of Guangzhou delta Imaging Technology Co., Ltd. and relevant equipment owned by Jiangxi Jingrun Optical Co., Ltd. with cash of 2.42 billion yuan.

Wentai technology said that the target assets need to wait for the completion of the transaction to pass the factory audit of specific customers before re obtaining orders, and there is still uncertainty whether the final order can be obtained. But judging from the market news, it is very likely that the target assets will re-enter the apple industrial chain.

According to reports, the premise of Wentai technology's acquisition of the above assets is that it has fully communicated with apple; after acquiring the relevant assets of ofight, it will soon restore the supply of front cameras to apple, and the supply of rear cameras is also in progress.

Wentai technology is a leading enterprise of mobile phone ODM. It became famous in the first World War by purchasing the world famous semiconductor company anser group in 2019. After the acquisition, Wentai technology extended from ODM company to the upstream semiconductor device field.

And the purpose of this acquisition is also very clear, is Wentai technology to further extend the industry chain behavior.

However, with the overall downturn of Apple's industrial chain, it is still full of unknown whether Wentai technology's acquisition of an object rejected by apple is an opportunity or a chicken rib.

6. Purchasing at a discount to improve the industrial chain

From this point of view, this acquisition is absolutely cost-effective for Wentai technology.

According to the previously disclosed "purchase intention agreement", both parties agree that the pricing principle of the target asset is: the purchase price = 10 × a + B, and the transaction price is the price including tax (a is the net profit of Guangzhou delta after audit in 2020). B is the transaction price of operating assets).

According to the latest announcement, the net profit of Guangzhou delta after audit in 2020 will be 339 million yuan, and the net value of relevant equipment evaluation of Jiangxi Jingrun will be 638 million yuan. According to the above calculation method, the transaction price is about 4.028 billion yuan. The final transaction price was 2.42 billion yuan, which was 60% of the original price.

Among them, the transaction price of 100% equity of Guangzhou delta is based on the evaluation value, which is determined as 1.7 billion yuan through negotiation; the transaction price of the subject equipment owned by Jiangxi Jingrun is determined as 720 million yuan (including tax) after negotiation based on the evaluation value.

However, it is worth noting that the predecessor of Guangzhou Delta, formerly Sony Electronics South China Co., Ltd., was acquired by ofight in 2016 at a price of USD 234 million (equivalent to RMB 1.58 billion according to the exchange rate at that time). Compared with the trading price at that time, the sale of ofight still has a premium.

As for Wentai technology, once the apple business originally owned by ofight is included, it is expected to gain 10 billion revenue increase performance.

According to the public information disclosed by ofight, according to the audit, the operating revenue from the related business of specific customers in 2019 is 11.698 billion yuan, accounting for 22.51% of the total audited business income in 2019, and 30% in 2020. In the first three quarters of last year, Wentai technology's revenue was 38.3 billion yuan, and its net profit was 2.26 billion yuan. After the above targets are included, the revenue scale of Wentai technology is expected to reach a higher level.

More importantly, from the business level, Wentai technology will expand from product integration business to upstream electronic components strategy and build customer service capability of the whole industry chain through the acquisition of relevant assets of ofight.

"On the basis of overall planning the development of product integration business and semiconductor business of Anshi group, the company can further extend to the upstream of the industrial chain through this acquisition, and carry out the layout and integration of industrial vertical fields, so as to better seize the development opportunities of rapid growth in demand in 5g, IOT and intelligent automobile fields, and promote the long-term sustainable growth of listed companies' performance." Wen Tai Technology said.

"With the acquisition of specific customer assets by Wintech, the company will open a new camera module business segment in 2021. As one of the most valuable components of a single machine, the camera module has a market space of 10 billion yuan. With the guarantee of follow-up orders from major customers, Wentai is expected to explore new markets in the optical field. " Founder Securities electronic industry analyst Chen Hang pointed out.

Lin Zhi, chief analyst of witdisplay, believes that Wentai technology's acquisition of the camera module business of delta in Guangzhou can make up for the shortage of Wentai technology's supply chain, reduce the OEM cost and obtain greater profits. "What's more, the core selling point of smart phones at present is the camera function, that is, camera module, image sensor, etc. the acquisition of Guangzhou Delta company is equivalent to seizing one of the core of the mobile phone industry."

Is apple business still good?

So, how likely are the above targets acquired by Wentai technology to re-enter Apple's supply chain system?

Many market participants believe that Wentai technology has already communicated with apple before acquiring Guangzhou Delta company.

"The target asset needs to wait for the transaction to be completed and then go through the factory audit of a specific customer before re obtaining the order, and there is still uncertainty about whether the order can be obtained in the end." Wen Tai Technology said.

This also means that after Wentai technology takes over, as long as it passes the evaluation of apple, it is still expected to continue to get orders.

On March 30, the reporter repeatedly called Wentai technology to inquire about the progress of the negotiation with apple, but the phone was not connected.

According to a person familiar with the matter, there are two processes for supplying apple. First, you have to enter the list of Apple suppliers to get "tickets", and then you need to do NPI (new product import) for specific products. Having obtained the "ticket" is actually the premise of Wentai technology's acquisition of assets. However, as for the products, the NPI import is still needed for the front camera and the post camera.

According to the person familiar with the matter, with the support of specific customers, the import link is highly deterministic, and it is expected that the supply of goods will be resumed soon. It is reasonably estimated that the time for re obtaining overseas specific customer orders is within 4 months after the completion of equity delivery.

21st century economic reporter learned that Wentai technology itself also supplies apple. It once said on the interactive platform that the company's shipment to Apple was mainly products in the field of mobile and wearable devices.

However, the following problem is that with the experience of "withdrawing from the group" of ofI light, the doubts of market participants about the uncertainty of fruit chain target business are also increasing. Investors are worried about whether Wentai technology, even if it enters the fruit chain, will face the same risks as ofight?

"As long as Apple's supply chain is at risk of being abandoned by apple, Wentai technology has no irreplaceable core technology. If you enter the apple supply chain, the focus is not on profitability, which may help the stock price even more. " Lin Zhi said in an interview with a reporter from the 21st century economic report.

Judging from the performance of the secondary market, since Wentai technology announced its acquisition on the evening of February 7, its share price has indeed risen in a short period of time, and even got the limit on the second trading day. But more than a month later, the share price has fallen back to the previous level. On March 30, the stock price of Wentai technology opened higher and closed at 99.53 yuan / share, up 1.15%.

Wentai technology reminds investors that after the completion of the transaction, in addition to the risks of factory audit and re obtaining orders, the target assets may suffer from continuous losses and asset impairment risks, and may face the risks caused by various uncertain factors, such as intensified market competition, technology R & D unable to meet customer requirements, and changes in political and economic environment at home and abroad.

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