On April 12, in the wave of new stock breaks, another "star enterprise" - Weijie Chuangxin, the company not only wears the aura of "the first domestic PA share", but is sought after by the four major domestic smart phone manufacturers "Huami OV", and has been "locked" by MediaTek for nearly 30% of the shares before listing. However, such a company born with a golden spoon has been questioned by investors for breaking its stock price due to profit difficulties.
Since April, the tide of A-share breaks has intensified, 9 listed new stocks, 6 of which are currently in a state of breakout, and one of them is not only sought after by the four major domestic smart phone manufacturers "Huami OV", but also has been "locked" by MediaTek nearly 30% of the shares before listing.
On April 12, the first listing of the Weijie Chuangxin Science and Technology Innovation Board was nearly 30% lower, facing the dilemma of breaking. According to the company's prospectus data, the company's issue price is 66.6 yuan / share, as of the close, the company's stock price is 42.60 yuan / share, a decline of up to 36.04%.
This also means that the loss of the successful investors will exceed 10,000, and compared with its 0.04% winning rate, it has made many netizens complain that "now losing money is also based on luck."
For this situation, some investors believe that "the reason why Weijie Innovation broke down is mainly due to the company's continuous losses." The data shows that during the period from 2018 to 2021, the company's cumulative loss reached 210 million yuan."
However, is this really the case?
By MediaTek "Dongfeng",
Weijie Chuangxin was successfully listed
According to public information, the company was founded in 2010 by the "queen of cottage machines" Rong Xiuli, the main business is the research and development, design and sales of RF front-end chips, and the products are used in mobile terminals such as smart phones, tablet computers, and smart wearable devices.
According to the company's prospectus, the company was not founded for a long time, but the company's products have been successfully introduced into the four major domestic smart phone factories "Huami OV", and at the same time, these well-known smart machine manufacturers are also shareholders of the company.
According to the prospectus, Huawei's Hubble Investment holds 3.57%, OPPO Mobile holds 3.39%, Xiaomi Fund holds 1.74%, and Kunwei Management holds 1.5%. In addition, SMIC Haihe and Huaxin Investment are also shareholders.
Among these shareholders, MediaTek can be said to be the "nobleman" of Weijie Innovation and even Rong Xiuli's life.
In 2002, Rong Xiuli officially established Beijing Tianyu Langtong Communication Equipment Co., Ltd., hoping to enter the domestic mobile phone market. At the beginning of its establishment, due to the backwardness of Tianyu Langtong in technology, it once led to a loss of nearly 80 million yuan for Rong Xiuli.
After experiencing such a heavy blow, Rong Xiuli understood the importance of technology and pulled Foxconn to work with MediaTek to operate in the form of OEM production.
In the case of quality assurance, Tianyu mobile phone once became a "hot model" at that time, in 2008, Tianyu mobile phone shipments reached 17 million units; in 2008, Rong Xiuli was on the Hurun IT rich list with a wealth of 4.2 billion yuan, ranking 11th.
However, with the advent of the wave of 3G mobile phones, Tianyu mobile phones did not catch up with this wave of intelligence, which also led to the later Tianyu mobile phones being abandoned by the times.
Although Tianyu mobile phones are in decline, Rong Xiuli has not lost her words, and in 2010, Weijie Chuangxin turned out to specialize in the field of PA modules.
The company did not receive much attention in its early days. It was not until these years that the company once again held hands with MediaTek and successfully introduced "Huami OV" before it was widely favored by capital.
On April 30, 2019, Weijie Chuangxin and Gaintech, a subsidiary of MediaTek, signed the "Gaintech Capital Increase Agreement", stipulating that Weijie Chuangxin will add 19.098 million shares, accounting for 40% of the total share capital of the company after the capital increase and expansion, and all the new shares will be subscribed by Gaintech for 40 million US dollars or the equivalent of RMB at a capital increase price of 2.09 US dollars per share, which is converted according to the actual payment date exchange rate, that is, RMB 14.70 per share.
Even if the company has broken down so far, based on the closing price of Weijie Chuangxin on April 12, the floating profit ratio of the company's shares in the hands of MediaTek is still as high as 289.8%, which can be described as a lot of profit.
It is worth noting that MediaTek's allocation price is much lower than the capital increase price of other institutions participating in the capital increase in the same batch, and the company has also been subject to regulatory inquiries.
In this regard, some insiders believe that "this kind of low-priced introduction of strategic investors seems understandable." Due to the fierce competition in the current mainland PA market, the introduction of powerful strategic investors has become the "secret recipe" to stand out from it.
As a world-renowned mobile phone chip manufacturer, MediaTek is undoubtedly the best "admission ticket" of Weijie Chuangxin. With MediaTek's industry position, the promotion of Weijie Chuangxin related products in mobile phone manufacturers should be much smoother. ”
This is also the case, in 2019, the company successfully introduced huami OV four major mobile phone manufacturers. According to the company's prospectus data, vivo, OPPO, xiaomi, Wingtech, Huaqin, Longqi and other six customers accounted for 95% of the company's revenue.
According to the prospectus data, from 2018 to the first half of 2021, the company's operating income was 280 million yuan, 580 million yuan, 1.81 billion yuan and 1.7 billion yuan, of which the average annual compound growth rate of 2018-2020 was 152.48%.
According to the specific listing criteria selected by the company in the prospectus, the company included "the expected market value of not less than 3 billion yuan, and the operating income in the most recent year is not less than 300 million yuan" as the listing standard, and the company did not meet the listing standard before the introduction of MediaTek and the introduction of products into "Huami OV".
It can be said that without MediaTek, there would be no Weijie Chuangxin today. However, although Weijie Chuangxin has become a giant in the domestic PA field through MediaTek, if it relies solely on the single product of PA module, Weijie Chuangxin's road cannot go very far.
PA business "internal and external troubles",
It is difficult for Weijie Chuangxin to make a profit
According to the company's prospectus data, the company's operating income during the reporting period is all derived from the main business income, and its main business income composition includes PA modules, RF switch chips and Wi-Fi RF front-end modules.
However, compared with the proportion of revenue from the PA business, the contribution of the company's other two businesses is very limited. The data shows that in 2020, the sales of PA modules have accounted for 99.20%, which also leads to the company's performance will be largely dependent on the PA module business.
Although, in recent years, the global PA module industry has grown steadily, according to Yole Development's forecast, the global mobile RF front-end market size is expected to reach $25.4 billion in 2025, of which the RF power amplifier module market size is expected to reach $8.931 billion.
However, the entire PA market is still dominated by overseas manufacturers, and according to YoleDevelopment data, in 2018, Skyworks, Qorvo, and Broadcom accounted for 93% of the global PA market share.
This also leads to the living environment of domestic PA module manufacturers is still relatively bad, and it is necessary to seize the market with a low-cost strategy. This also leads to the company's gross profit margin being much lower than that of its peers.
According to the prospectus data, during the reporting period, the company's gross profit margin was 21.89%, 18.04%, 17.92% and 26.61% respectively. In the same period, the average gross profit margin of peer companies was 37.11%, 36.23%, 33.08% and 39.1%, respectively.
The end result of low gross profit is that the company has always had difficulty making a profit. During the reporting period, the company's net profit attributable to the owners of the parent company after deducting non-recurring gains and losses was -40.2832 million yuan, -32.9544 million yuan, -100.8 million yuan and -165 million yuan, respectively.
On the other hand, the company's 4GPA module products with lower gross profit margin account for a relatively high proportion of main business revenue is also a major problem.
According to the prospectus data, the company's 4GPA module revenue accounted for 92.16%, 96.09%, 88.59% and 71.57% respectively during the reporting period, which was the main source of sales revenue; in 2020 and January-June 2021, the revenue of 5G PA modules accounted for 10.54% and 25.70% respectively.
At present, the domestic 5G network has been fully rolled out, 4G has gradually become the past tense, and the main revenue of Weijie Chuangxin is still based on 4GPA products. With the gradual elimination of 4G products, if the company cannot embrace the 5G era, it will not only face the risk that the gross profit margin of 4GPA products will further decline, but also the 5GPA market share that belongs to the company will also be eroded by other companies.
However, in the process of conversion to 5G, the research and development of Weijie Chuangxin has not made further breakthroughs. According to the prospectus, there is no patent on 5G in the patent applied for by Weijie Chuangxin, and the patents are all from previous years, and no core patents have been formed in recent years.
That is to say, on the surface, the reason for the company's break is that the company has always had difficulty in making profits, but after tracing back to the source, it can be seen that the company's gross profit margin is difficult to recover due to the squeeze of overseas manufacturers and the high proportion of low-end products.
In addition, the company is also facing the domestic PA module industry in the up-and-coming stars to catch up, it can be said that the company's current situation belongs to "internal and external troubles".
At present, the domestic well-known power amplifier design enterprises mainly include Weijie Chuangxin, Feijun Technology, Tsinghua Unigroup Zhanrui, Onry Micro, Huizhi Micro, etc., of which Feijun Technology entered the science and technology board listing counseling in June this year.
In addition, domestic RF switch manufacturers, the secondary market value of more than 100 billion Zhuoshengwei, has also begun to get involved in the PA field, has developed WiFi PA, can be used for mobile phones, routers, Internet of Things modules and other terminal products.
Responsible Editor | Cao Jingchen