Weifeng Electronic GEM IPO, focusing on industrial control connectors, BYD is customers for customers

Recently, the GEM Municipal Party Committee issued an announcement that Weifeng Electronics (Guangdong) Co., Ltd. (hereinafter referred to as “Weifeng Electronics”) will be launched on April 8th.

Weifeng Electronics is mainly engaged in the research and development, design, production and sales of industrial control connectors, automobile connectors and new energy connectors. The company’s products are mainly used in industrial control and automation equipment, new energy vehicle “three electric” systems, photovoltaic inverter Systems and other series of application scenarios.

The company plans to raise approximately 600 million yuan for the construction project of the Intelligent Manufacturing Center of South China Headquarters, the R & D Center of the South China Headquarters R & D Center, and supplementary funds.

As of the issuance, Weifeng Electronics’s controlling shareholder was Li Culture, which directly held 41.71%of the company’s shares, and indirectly controlled the company’s 15.17%of the shares through Kangnete; Luo Shaochun, the wife of Li Culture, held 22.75%of the company’s shares; Li Ruixin, the son of Li culture, directly holds 7.58%of the company’s shares, and the three of them directly or indirectly control the company’s 87.21%of the shares to be the company’s common actual controller.

The subdivision industry in Weifeng Electronics is the connection device industry in the electronic component industry. From the perspective of the distribution of the application field, communication, automobiles, consumer electronics, industrial control, and rail transit are the main application areas of the connector. In 2020 The proportion accounted for 23.08%, 22.55%, 13.32%, 12.31%, and 6.93%, totaling 78.19%.

At present, China is the world’s largest connector market. In 2020, China’s market share accounted for 32.18%of the global proportion. According to statistics, the scale of China’s connectors increased from US $ 14.719 billion in 2015 to US $ 20.933 billion in 2018, and in 2019, it fell, and the market size in 2020 was 20184 million US dollars.

Due to the continuous improvement of the requirements for supporting electronic components in the downstream market, international first -class manufacturers with strong strength are more prominent, resulting in a higher and higher concentration of global connectors markets. The market share of the world’s top ten Dalian pick -up companies increased from 41.60%in 1995 to 61.44%in 2019.

In China, most of the low -end products in China, and the market concentration is also increasing rapidly. The market share of the top five major companies in China increased from 5.15%in 2010 to 42.77%in 2018.

Compared with internationally renowned companies, there is a large gap in Weifeng Electronics in terms of business scale and market share; among A shares comparable to listed companies,

The company’s revenue scale is also slightly weak.

In terms of performance, from 2019 to 2021, Weifeng Electronics achieved revenue of 232 million yuan, 273 million yuan, and 409 million yuan, respectively, with net profit of 43.4297 million yuan, 610.568 million yuan and 10 billion yuan, respectively.

The company’s revenue and net profit are on the rise.

From the perspective of the product classification of revenue, the sales revenue of industrial control connectors products in each phase of the reporting period accounts for more than 70%, which is the main part of the company’s revenue.

In the past three years, the gross profit level of Various products of Weifeng Electronics has fluctuated slightly, showing a trend of rising first and then downward. The overall is slightly higher than the comparison company level in the same industry.

The company’s main business gross profit margin was 45.33%, 47.83%, and 45.59%, respectively.

Among them, the company

The gross profit margin of the car connection device is higher than other products

, To reach more than 50%, mainly because the company’s core products represented by the “three -power system” are relatively high and gross profit is relatively high; The company entered a large -scale car factory direct supply system represented by BYD, and the manufacturing advantage and cost advantage were reflected.

Generally speaking, in the market with a larger scale and a higher degree of localization, the fierce product competition, the relatively low gross profit margin. At present, there are many listed companies in China with connectors as the main business. In the future, it is not ruled out that due to the slowdown in the growth rate of the downstream market, market competition has intensified, which leads to the downward pressure on the company’s product prices. There will be a risk of decline.

In addition, according to regional classification, Weifeng Electronics has both domestic sales and export, of which

Domestic customers include Huichuan Technology, BYD and Kaifu Electronics. Overseas customers mainly include Tyco Electronics, Hong Kong Kichenda, W├╝rth Group, etc.

During the reporting period, the company’s overseas sales revenue was 94.38 million yuan, 114 million yuan, and 147 million yuan, respectively, accounting for 41.06%, 41.96%, and 36.36%of the company’s main business revenue, respectively. As the trade environment and policies of the connection device industry are easily affected by international economic and political forms, there may be a certain risk of policy changes and the risk of exchange rate fluctuations in the future.

Conclusion

At present, Weifeng Electronics mainly adopts a differentiated strategy to compete with international first -class manufacturers, but the company’s current scale is still not large, which is not conducive to the company’s better scale economy. With the increasingly fierce competition in the industry, the company urgently needs to expand the overall scale on the basis of ensuring the advanced technology, thereby increasing comprehensive competitiveness.

The above is the introduction and description of M19 connector, I hope it can be helpful to you.

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