AAC Technologies , currently a world-renowned acoustic device manufacturer, has grown rapidly since becoming an Apple supplier. As of 2017, its revenue and share price have skyrocketed. In terms of stock price, it has risen from 42 yuan per share in early 2016 to The highest peak in 2017 was more than 180 yuan per share, an increase of more than 4 times! If calculated from 22 yuan per share in 2013, it has risen more than 8 times!
Luxshare Precision is also an Apple supplier, mainly providing connectors for Apple. In addition, this year it is producing AirPod headphones. Not long ago, Cook and visited Luxshare Precision. Its development is also very fast in recent years. In terms of stock price, it has risen from less than 3 yuan per share in early 2013 to the highest peak of 25 yuan per share this year, and the increase has also reached more than 8 times!
Merry, also a supplier of acoustic components for Apple, as early as 2015, Merry introduced Luxshare Precision through a private equity plan, and then Luxshare Precision acquired a 25.40% stake in Merry, so that Luxshare Precision has become a part of the company. However, as a leading company in acoustic components in Taiwan, the deal ended in failure.
Subsequently, the transaction between the two continued to unfold in a curve, and Merry signed an agreement with Luxshare Precision to sell 51% of the shares of Meite, a Suzhou factory whose main business is micro speaker modules, to Luxshare Precision, and Apple’s orders will be provided by Taiwan Meilu receives the order and then transfers it to Meite for production. In other words, this year Luxshare Precision produced AirPods for Apple, and its main credit is actually Merry!
Kangkong started out as a connector business, and is currently an acoustics manufacturer, and has stepped into the plastic lens market. In order to increase the share of Apple's orders, Merry also invested in the upstream supplier Kangkong at the end of 2016, increasing its shareholding in Kangkong from 6% to 16% at a price of no more than 800 million yuan, and became Kangkong's No. The three major shareholders and the largest legal person shareholder (Goertek Acoustics, another Apple acoustic supplier, is also a Kangkong customer).
From the perspective of AAC Technologies, since acoustic devices have long accounted for more than half of the company’s revenue, and its competitors are developing rapidly, it needs to be in the market both from the perspective of market competition and the company’s future growth. Accelerate the expansion to new businesses, such as glass back cover and optical lens are its new businesses, but as far as these two markets are concerned, it can be said that it is a market where capital competes, and the competition is very fierce!
Battle of Acoustics: Meryl and Luxshare Kangkong’s three-way battle with AAC
Let’s take a look at the development of AAC Technologies in recent years. It was originally mainly engaged in acoustic products. It can be said that it is a company that started with acoustics. After Apple's orders became the latter's supply chain , its growth is very rapid, which can be seen from its revenue growth; and its business has also expanded from the initial acoustic products to the current touch motor, wireless radio frequency, Optical lenses and other markets! In terms of its revenue,
has more than doubled its revenue in the past five years. In 2012, its revenue was 6.283 billion, but in 2016, its revenue increased to 15.507 billion; its net profit also From 1.98 billion to 4.633 billion! Overall, AAC Technologies recorded a strong performance in the first half of 2017, and both the acoustic and non-acoustic segments showed continuous growth momentum. In the first half of the year, its total revenue was 8.644 billion yuan, a year-on-year increase of 55%, and its net profit was 2.126 billion yuan, a year-on-year increase of 57%. In terms of
’s product structure, AAC’s main business is acoustics, accounting for more than 50% of its revenue for a long time. With the rapid development of its haptic motors, wireless RF structural parts and other businesses, the sales ratio of non-acoustic business has been increasing year by year. In 2017 In the first half of the year, non-acoustic business (touch motors and radio frequency structural parts) accounted for 48.5% of the total revenue, and its acoustic business accounted for 48% of the total revenue.
In its semi-annual report, AAC Technology stated that its acoustic business is mainly dynamic devices, which are active sounding devices, including micro speaker modules, speakers and receivers. In the first half of 2017, the distribution of dynamic devices Revenue was 4.141 billion yuan, accounting for 48% of total revenue, an increase of 22% year-on-year. Micro speaker modules contributed the main revenue, accounting for 30% of total revenue, while receivers and speakers accounted for 13% and 5% respectively. The overall gross profit margin exceeds 40% under the constantly changing platform portfolio with a good specification upgrade cycle. The sales revenues of the three main product lines of
dynamic coil devices are different year-on-year, reflecting that they face different product specification upgrades.There are differences in the market share of the level cycle and penetration of different customers: Compared with the first half of 2016, micro speaker modules and receivers increased by 32% and 28% respectively, while speakers fell by 26%.
Let’s take a look at Luxshare Precision. The main business of Luxshare Precision is connectors. It entered Apple’s supply chain very early. Driven by Apple, Luxshare Precision made a strong rise: In 2014, its annual net profit was 650 million , a year-on-year increase of 91.35%; the annual net profit of 2015 was 1.077 billion, a year-on-year increase of 71.01%; the annual net profit of 2016 was 1.157 billion, a year-on-year increase of 7.23%; Net profit in the first half of the year was 682 million, a year-on-year increase of 70.07%. At present, Luxshare Precision is already the listed connector company with the highest market value and income in China. As the main supplier of Apple,
has greatly benefited from Luxshare Precision, but with the emergence of the domestic mobile phone brand , Apple's influence has been greatly reduced. Therefore, Luxshare Precision is actively transforming, and its traditional business has begun to expand to the domestic brand market. It is reported that in addition to being the core supplier of Apple lighting cables, Luxshare Precision is also the main supplier of domestic mobile phone brands such as , Huawei, , OPPO, and vivo. supplier. The annual report shows that the domestic sales of Luxshare Precision products increased significantly last year, with a year-on-year increase of 61.06%.
And its business has also expanded from connectors and wiring harnesses to communication base station antennas, mobile phone antennas, wearable devices, auto parts and subsystem products, FFC/FPC, original wire cables and acoustic products.
From the perspective of Luxshare Precision’s business, it actually has nothing to do with Merry’s acoustic business. After entering Merry from an investment perspective, Merry’s customers are interested in its customer base. After all, Luxshare’s connectors The customer base includes the world's top mobile phone customers such as Apple, Huawei, OPPO, and vivo!
At the end of 2015, Merry announced that it would introduce Luxshare funds and form an alliance through the private placement of 63 million shares. Luxshare will use this to acquire 3 directors and 25% equity of Merry. occupancy rate. However, even though this investment project can actually boost Merry’s position in the global electro-acoustic industry and narrow the distance with AAC and Goertek, the investment review committee still regards Merry as the leader in the electro-acoustic industry in Taiwan. "For the reason, in July 2016, Luxshare's application for investment in Meilu was rejected, and Meilu and Luxshare had to make a detour.
Then Merry announced on July 18 that it signed a letter of intent for cooperation with Luxshare, selling 51% of the shares of Mite in Suzhou, which mainly produces micro-speaker modules, to Luxshare. For special production, Met became a company invested by Merry using the equity method, and Luxshare became the most important rich dad of Met, and Luxshare was responsible for all the capital expenditures required for the establishment of automated production lines. At the beginning of December 2017, Luxshare Precision once again established a joint venture with Meilu Electronics Co., Ltd. Guangdong Luxshare Meilu Electronics Co., Ltd. The former invested 102 million yuan to account for 51% of the shares, and the latter invested 98 million yuan to account for 49% of the shares!
In order to increase the proportion of Apple’s orders, in addition to introducing Luxshare Precision, Merry also took a stake in Kangkong. At the end of 2016, Merry and Kangkong jointly announced that Merry’s board of directors decided to participate in the private placement of Kangkong case, the total investment amount will not exceed NT$800 million. After the subscription is completed, if the number of subscriptions of Merry reaches 10,000, the shareholding in Kangkong will increase from the previous 6% to 16%.
It is understood that Kangkong is an upstream supplier of electro-acoustic components of Merry. It started from the connector business. Merry decided to subscribe for the private placement of Kangkong in order to vertically integrate the industry, master key technologies and ensure the production quality of electro-acoustic components. After Merry subscribes to Kangkong Private Equity, it will become the third largest shareholder and also the largest legal person shareholder. The purpose of the combination of the two is undoubtedly to grab Apple's new smartphone supply chain, which has been proved to be a success! With the assistance of Luxshare Precision and Kangkong, Merry has undoubtedly achieved great success in Apple orders. From the perspective of its revenue, its cumulative revenue in the first 11 months of this year increased by 56.06% compared with last year! And Kangkong's performance this year has also increased significantly compared with last year!
However, in the recent period, Merry has applied for the shareholding of Kangkong twice in a row, and there are also rumors in the market that Kangkong has suffered customers to cut orders! Merry's twice application for Kangkong's shareholding is intriguing! However, recent healthControl releases good news in the field of lenses, and in one fell swoop get rid of the smog caused by the shareholding of MLS!
AAC's new business is caught in an "ambush": 3D glass back cover and lens market are full of strong competitors
Among Apple's acoustic suppliers, there are mainly AAC, Merry and GoerTek, facing the strength of Merry Attack, AAC Technology is naturally preparing for the battle. It can also be seen from the investment direction of AAC Technology in new businesses in recent years. On the one hand, it has strengthened its layout in the 3D glass back cover market. In early 2017, it invested 12.8 billion yuan in the market. On the other hand, it also hopes to enter Apple's 3D camera supply chain. mobile phone newspaper online has repeatedly reported its layout in the glass lens market.
However, in terms of the two major businesses of AAC Technologies, in the 3D glass back cover market, a large number of domestic listed companies are strengthening their layout, including some glass cover manufacturers before, such as Lens Technology, , Xingxing Technology Wait, there are also some manufacturers of precision structural parts, such as BYD electronics, victory precision , etc.!
As for the lens market, apart from Largan among Apple suppliers, it is rumored that AAC is cooperating with Apple, but in this market, Kangkong is also competing with AAC!
Let’s take a look at the 3D glass back cover market first. In this market, AAC Technologies hopes to launch an integrated solution in the future, namely: 3D glass front and back cover + amorphous alloy middle frame bracket + speaker BOX + receiver + optical lens Among them, 3D glass, amorphous alloy middle frame bracket and optical lens are the newly expanded business of AAC Technologies!
In the 3D glass back cover market, as early as February 12, 2017, AAC Technology’s smart phone 3D glass and other micro precision components project started construction, with a total investment of 12.8 billion yuan, which is the largest single project in Wujin District, Changzhou City so far. The foreign-funded manufacturing project is expected to achieve an annual sales income of 15 billion yuan after it reaches its full capacity. The planned land for the project is 460 acres, and it will form an annual production capacity of 100 million pieces of 3D glass and 12 million pieces of micro precision components such as metal radio frequency modules.
In addition to AAC Technologies, on June 30, according to the announcement of Shengli Precision, the company plans to build a smart terminal 3D cover glass production line in Shucheng, Anhui. The sources of construction funds are self-owned funds, raised funds, bank loans, etc. Once the project achieves an effective breakthrough in the market and obtains the first opportunity, it will create favorable conditions for the company's subsequent expansion of the 3D cover glass business.
BYD will also plan to invest 600 million yuan to build a 3D glass project using the existing factory buildings. The first phase is planned to reach mass production conditions by the end of this year. Up to now, the cumulative investment has completed about 200 million yuan. At the same time, Lens Technology, Oufeiguang, , Xingxing Technology, etc. are also making great efforts in the 3D glass market!
The second is the lens market. In terms of optical lenses, AAC Technology has launched a wafer-level glass lens (MLL). It is understood that the multiple advantages of wafer-level lenses compared with existing solutions, the company's glass wafer-level lens (WLL) will become a disruptive solution. Its main advantages are mainly in four aspects:
First, the MLL solution has a smaller size: a smaller WLL can help 3D remote sensing camera modules fit into the narrow side of a full-screen smartphone, which is especially important because More and more lens modules are installed on smartphones.
Second, more excellent optical characteristics. Glass lenses have better optical properties than plastic lenses, such as better light transmission and refractive index. In addition, glass lenses are also better at high temperature than plastic lenses, so glass lenses can withstand more coatings than plastic lenses to improve optical characteristics. AAC WLL is an aspheric lens, which is thinner than traditional spherical lenses. Therefore, the hybrid lens can reduce the height of the lens group while providing better optical performance due to the reduced number of lenses used.
It is understood that the 3D lens solution provided by the WLL program of AAC Technologies is entirely made of glass. AAC Technology emphasized that other 3D sensing products in the same industry use polymer + glass solutions, which cannot completely avoid the defects of plastic lenses. Glass lenses, on the other hand, can withstand high temperatures, making certain operations in back-end production easier, such as reflow soldering. AAC Technologies' hybrid lens has entered the customer inspection process and received positive feedback. It is shipping the hybrid lens to Chinese customers.
third, has a lowerthe cost of. The two-inch wafers can be cut into more than 100 lenses, helping to reduce costs compared to traditional glass lens production processes. The fourth is to avoid potential patent disputes. Since other lens suppliers do not provide hybrid solutions, AAC's hybrid lens solution can help avoid potential patent disputes. Customer base for plastic lenses expanded. Currently, AAC has 5-6 plastic lens customers, and the customer base will further expand in the second half of 2017. The main type of plastic lens shipment is 5P/13MP. It is currently cooperating with a client in Korea on a 6P project that utilizes the client's 6P patent. For this Korean customer, AAC Technologies firstly meets the customer's design and needs, and then gradually proves the company's design and production capabilities to gain a larger share.
In the lens market, AAC has many competitors, not to mention the lens kings Largan and Sunny Optical. The first is Qijing and Qualcomm . In fact, as early as September 30, Qualcomm and Qijing jointly announced that they will combine the technologies of the two to jointly launch the Slim (Structured Light Module) 3D camera overall solution. The product is expected to be released next year. Mass production in Q1.
Qijing said that the cooperation with Qualcomm will accelerate the development of high-resolution, low-power consumption and active 3D depth-sensing camera systems, providing computer vision functions including face recognition, 3D reconstruction and scene perception, which can be applied in mobile Devices, Internet of Things, Security Monitoring, Automotive, Augmented Reality (AR) and Virtual Reality (VR) and other fields.
In the first half of this year, according to Qijing, operating expenses increased in the first half of this year, 50% of which was used to expand wafer-level optical lens (WLO) production capacity, and WLO products were to attack future 3D products. An important tool, the new production capacity is expected to begin to increase in the third quarter.
is the WLO production capacity, and Hiking will build a new factory. The new factory is located near the headquarters of Hiking Tainan Shugu Park. It mainly accommodates 8-inch glass WLO product lines, next-generation 12-inch wafer LCOS, and provides urgent The new factory will be completed in early 2018 for the additional office space needed, and the new WLO production capacity is expected to increase in the third quarter of this year. Himax emphasized that the wafer-level optical lens (WLO) product line, due to the suspension of shipments by major augmented reality AR customers, led to a continuous decline in revenue in the second quarter.
Next is Kangdazhi. It is understood that Kangdazhi, a subsidiary of Sharp, has been a lens supplier for a major Japanese mobile phone manufacturer since 2002. For a long time in the past, Kangdazhi was unwilling to be controlled by Apple, even if the order came to the door, it was unwilling to expand production . Until 2016, Kangdazhi entered the Apple supply chain for the first time!
According to the confirmation of Kangdazhi headquarters, Kangdazhi will greatly expand its production in Lianyungang this year. According to Morgan Stanley's report, Kang Dazhi will expand production by 30% this year and another 50% next year. Taiwan media pointed out that "Kang Dazhi's expanded production capacity in Xinpu Economic Development Zone will supply iPhones through Sharp and Hon Hai ". Kang Dazhi has also become a lens supplier for Tesla.
At the same time, Hon Hai is also investing in various lens technology innovation teams in various places. In addition to light field camera technology that does not need to focus, it also invests in next-generation lens technology. Corephotonics, etc., a general manager of an optical factory revealed that Hon Hai has set up two lens research and development teams in Taipei and Hsinchu, Taiwan this year, and has also invested in Zhongyang Optoelectronics, a lens mold factory. From
to the beginning of 2017, according to the announcement of Hon Hai’s investment in Sharp, it is expected to convert the convertible corporate bonds it holds in Kangdazhi into stocks on January 1 next year. At that time, Sharp’s shareholding in Kangdazhi will increase from the current 44.3%. The increase to 53.5% is equal to the official acquisition of Kangdazhi's dominance. The outside world also believes that the target of Hon Hai's sword is Largan.
It is understood that Sharp currently holds a 44% stake in Kangdazhi, which was acquired in December 2016, and later bought it from Kanematsu Co., Ltd., a Japanese general trading company, for about 1 billion yen (about NT$260 million). Kangdazhi convertible corporate bonds. Dai Zhengwu, vice president of Hon Hai and president of Sharp, revealed in his year-end open letter to employees at the end of last year that he will continue to develop electronic components. In addition to Sharp's continuous sprint OLED, another electronic component is the camera mirror.head off. The
legal person pointed out that Sharp holds 44% of Kangdazhi's shares. In other words, after Hon Hai integrated Sharp, it also took over Kangdazhi. Although industry insiders believe that from the perspective of production, Largan’s production capacity in 2015 is about 1.1 billion, while Kang Dazhi’s is only about 200 million, which basically cannot threaten Largan. However, the legal person pointed out that if Sharp continues to invest in Kangdazhi, the company’s production capacity may continue to expand. With Hon Hai’s strongest cost control strategy, Kangdazhi cannot completely replace Largan, but it will shake Largan’s position in Apple’s supply chain. position is not impossible.
The third is Kangkong. As mentioned earlier, AAC Technology mainly promotes optical lenses, and Himax Optoelectronics is the same. However, according to market expectations, in the future, Apple lenses will mainly be "glass + plastic". Apple mobile phones to 12 million pixels, stacked 6 pieces of plastic lens, the thickness has exceeded the body, this year the popular hybrid lens p plus g, that is, glass plus plastic. The industry is called Hybrid lens, or silicone optics. Conversely, Kangkong has launched a silicone solution and has sent it to semiconductor manufacturers for certification, prompting its stock price to soar for two consecutive days! In addition to the above-mentioned companies increasing their efforts in the lens market, it is worth mentioning that OFILM recently announced its entry into the lens market, and most of the above-mentioned companies are Apple suppliers!
On the whole, in terms of competition from Apple suppliers Luxshare Precision, Merry, Kangkong and AAC Technologies, in the field of acoustic devices, Merry and Luxshare have greatly increased their order share in Apple's orders. For example, in the 3D glass back cover market, AAC Technology undoubtedly wants to enter the Apple supplier, but in this regard, Lens Technology and Victory Precision are also Apple suppliers, and they also invest heavily in the 3D glass back cover market. AAC Technologies is a major competitor; and in the lens market, as a new business of AAC Technologies, it also faces competition from a large number of manufacturers, and the most noteworthy one is Kangkong!
Of course, for AAC Technology, if it can successfully launch the integrated solution of "3D glass front and back cover + amorphous alloy middle frame bracket + speaker BOX + receiver + optical lens", it will still have a great competitive advantage!
It is worth mentioning that it has become the norm in the industry to use the parent company or a joint venture company to enter into Apple's supplier strategy. According to online observation, judging from the current market, this trend will become stronger and stronger. Many listed companies, as Apple suppliers, have acquired some companies to expand new product lines, and further enter the acquired product lines into Apple's supply. As a result, the competition among Apple suppliers is bound to be intensified. In other words, the integration of Apple suppliers is also accelerating!
At the same time, in the past two years, domestic mobile phone manufacturers Huawei, OPPO, vivo, and Xiaomi have risen rapidly. Although the shipments of individual companies are not as good as Apple, the total shipments have been greatly reduced. The total volume of Apple and Samsung . Therefore, we can also clearly see that the supply chain is paying more and more attention to the cooperation of the top domestic mobile phone manufacturers, and this trend will continue to strengthen as the shipments of the top few mobile phone manufacturers continue to increase!