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On December 2, Lixun Precision announced that the company's board of directors deliberated and passed the "Proposal on Terminating the Non-public Offering in 2022". Lixun Precision said that since the announcement of the non-public offering, the company has been actively promoting relevant work with intermediaries, and the relevant proposed fundraising projects have been implemented through the company's own funds. After careful evaluation by the company's board of directors and management, the company's current stock price is at a low level, and the abundant and stable cash flow situation in 2023 and the next year will be sufficient to support the continuous promotion of the non-public offering.
The termination of the private placement may cause investors to have doubts about the future development of the company. Zhu Keli, executive director of the China Information Association and founding president of the National Research Institute of New Economy, said in an interview with the reporter that the private placement is usually regarded as one of the important measures for the company to expand its scale and improve its competitiveness, and the termination of the private placement may be interpreted as an adjustment of the company's development strategy or an increase in uncertainty, causing investors to worry.
Zhu Keli further said that the termination of the private placement may also affect the company's liquidity. "The termination of the private placement means that the company is temporarily unable to raise funds through the issuance of new shares, which may affect the progress of some projects that were originally planned to raise funds through private placements. Companies need to re-evaluate the funding** and schedule of these projects to ensure smooth implementation of the projects. ”
The current stock price is at a low level
Currently, the company's share price is indeed in a downward cycle. Luo Pan, executive dean of practical finance and business, said in an interview with the reporter that Lixun Precision has cut into the "fruit chain" since its listing, and its stock price has been substantial, which once rose to 63 in 202053 yuan shares at an all-time high. But then it entered a downward range, and as of December 4 this year**, the company's share price fell to 30$99 shares.
According to public information, in February 2022, Lixun Precision released a fixed increase plan. The company intends to issue no more than 212.3 billion shares of the company. The total amount of funds raised will not exceed 13.5 billion yuan, which will be used for the construction of smart wearable device product production line and technology upgrade project, intelligent mobile terminal precision component product production line construction project, new energy vehicle high-voltage connection system product production line construction project, semiconductor advanced packaging and testing product production line construction project, intelligent mobile terminal display module product production line construction project, intelligent vehicle connection system product production line construction project and supplementary working capital.
The company said in the plan at that time that the fundraising project covered advanced packaging and testing, display modules, intelligent mobile terminals (including smart phones, smart wearable devices, smart cars, etc.) components and system assembly and other fields, showing the characteristics of multi-level and multi-field from components, modules to systems, and from consumer electronics to automotive electronics and other industries, which is the concrete embodiment of the company's all-round coordinated development of the business layout, and also enriches the company's product matrix. It is necessary to improve the company's profitability and resilience.
The concentration of customers is still relatively high
Whether it is in the terminated private placement plan or in the company's regular disclosure announcements, you can frequently see words such as "diversified development" and "cultivating new growth points". The company also admitted in this year's interim report that the company's customer concentration is relatively high, and it is mainly concentrated in the field of consumer electronics in the short term. If an important customer has serious business problems, the company will also face certain business risks.
The company said that it will further deepen the diversification route in customers, products and businesses, take process + underlying technology as the support point, continue to carry out horizontal and cross-border empowerment, and strive to develop new markets and new businesses.
Once, the identity of "Apple's top businessman" allowed the company to rise rapidly in just a few years and sit firmly in the top spot of "the first brother of the fruit chain". Nowadays, "relatively concentrated customers" has also become a major "worry" of Lixun Precision.
According to the annual report of Lixun Precision from 2018 to 2022, the proportion of revenue from the largest customer in total revenue has increased by nearly 30 percentage points in five years, of which more than 70% will be in 2021 and 2022.
On the one hand, the dependence on Apple's major customers remains high, and on the other hand, unfavorable factors such as production costs** and low gross profit margins are further highlighted. In this year's interim results report, the company's consumer electronics accounted for 84 percent of total revenue57%；The operating cost of this business was **21 year-on-year13%, gross profit margin decreased by 2% year-on-year, while in the same period last year and the same period last year, gross profit margin has fallen by 4 year-on-year26% and 206%。
Based on the above concerns, the company has actively cultivated new growth points such as new energy vehicle business and communication business in recent years to broaden the performance moat. However, according to this year's interim report, the revenue of new energy vehicle business and communication business was 320.7 billion and 613.7 billion yuan, contributing only 3 percent to total revenue27% and 626%。It remains to be seen whether the company's "second curve" will become the main engine of future growth.