Original debut |Golden Horn Finance.
Author |Zelda.
"Whoever has a factory overseas, the order will be given to whomever the order is. ”This is the consensus of the market on the management of Apple's ** chain.
More than a year after Apple suspended the production of the Air Pods Pro2, the Chinese "fruit chain" giant Goertek announced the opening of a factory in Vietnam.
On January 15, 2024, Goertek announced that in order to meet the needs of the company's business expansion and long-term operation in Vietnam, the company's wholly-owned subsidiary, Hong Kong Goertek, intends to set up a wholly-owned subsidiary in Vietnam with its own funds, with a total investment of no more than 2800 million US dollars (equivalent to about 19.9 billion yuan.)900 million yuan).
This investment of nearly 2 billion yuan is not small. You must know that Goertek's net profit attributable to the parent company in 2022 will be less than 1.8 billion yuan, and less than 900 million yuan in the first three quarters of 2023, which meansGoertek took out more than a year's profits to invest in Vietnam.
Back at the end of 2022, Goertek announced that it had received a notice from a major overseas customer to suspend the production of one of its intelligent acoustic products. The industry generally believes that the big customer is Apple.
After being cut by Apple, Goertek's performance also fell off a cliff.
In that year, Goertek made an asset impairment provision of nearly 1.8 billion yuan due to "the impact of a major overseas customer notifying the company to suspend the production of one of its intelligent acoustic products", and the net profit attributable to the parent company fell by nearly 6% year-on-year; The situation will continue to deteriorate in 2023, and the net profit attributable to the parent company in the first three quarters will be nearly 8%.
As for the reasons behind Apple's cut orders, the market has different opinions, both speculating about demand factors and thinking that it is production reasons. But more importantly, it's actually a reflection behind itApple's trend of moving some of its chains out of China and accelerating its shift to Vietnam and India is unstoppable.
StillApple's transfer of the first chain is intended to diversify the risk, but it is China's "fruit chain" enterprises that bear the risk.
In the context of Apple's "relocation", China's "fruit chain" enterprises inevitably need to cooperate with Apple's investment layout in emerging markets such as India and Vietnam. Some Apple ** chain manufacturers said that Apple clearly requires its company to set up factories in Vietnam or India within a certain period of time"The scale of production capacity is not required, but it must be there."
However, whether it is India or Vietnam, China's "fruit chain" enterprises are facing huge difficulties in the process of relocation. India has geopolitical pressure, while Vietnam's labor and land costs have skyrocketed several times, and there is little investment dividend left.
This means that for Goertek, setting up a factory in Vietnam is a big gamble under the dilemma.
"Parasitic" apples
Goertek, Lixun Precision, and Lens Technology are known as the three "fruit chain" companies in A-shares, and they are all following the footsteps of Apple's products and growing into industry giants.
Among them, Goertek began to cut into the "fruit chain" around 2010, for Apple's first speaker module, microphone, wired headphones, etc. From 2010 to 2017, Goertek's revenue soared by more than 8 times.
In 2018, Goertek won the order for Apple's pioneering product AirPods, and the stock price (before the resumption) skyrocketed, from about 6 yuan per share, to nearly 60 yuan at the end of 2021, but has now fallen back to below 20 yuan per share.
The turning point occurred in 2022, on November 8 of that year, Goertek announced that it had received a notice from a major overseas customer to suspend the production of one of its intelligent acoustic products, which is expected to affect the revenue in 2022 not exceeding 3.3 billion yuan, accounting for about 4% of the company's revenue in 20212%。The industry generally believes that the big customer is Apple.
Affected by this, Goertek made a total asset impairment provision of 179.7 billion yuanIn 2022, the net profit attributable to the parent company will fall by nearly 6% year-on-year.
Stepping into 2023, the situation continues to deteriorate.
In the first three quarters of last year, although Goertek's revenue scale remained in the top three in the industry (Shenwan** industry - consumer electronics components and assembly).However, the net profit attributable to the parent company increased by nearly 8% year-on-year, ranking second to last among the top enterprises (with revenue of more than 10 billion yuan in 2022 and ranking among the top 10 in scale), and it is also far lower than the median of the head enterprises - a positive growth of 1477%。
Similarly, there is core profit (revenue - operating costs - taxes and surcharges - sales, management, profits, research expenses).From 2020 to 2022, Goertek's core profits were in the range of 3 billion to 4 billion yuan, but after the first three quarters of last year, this data was only slightly higher than 500 million yuan.
It is worth noting that the biggest negative impact of Apple's cut on Goertek shares is not revenue (revenue in the first three quarters of last year only fell by 0 year-on-year.)28%), ratherApple cut off the part of Goertek's orders with better profits, resulting in Goertek's gross profit margin continuing to deteriorate.
From 2020 to 2022, the gross profit margin of Goertek shares will be. 12%, which fell below 10% in the first three quarters of 2023, only 84%；In contrast, the median gross profit margin of the top companies were: 57% and 1158%。
The data shows that in the past few years, Goertek's gross profit margin has declined year by year, and it has been slowly thrown away from leading the industry in the early years.
In terms of specific business, Goertek's products are mainly divided into three parts: precision components, intelligent acoustic machines and intelligent hardware. According to the 2023 Interim Report,Gross profit margins declined in all three business segments
Among them, it is the Air Pods Pro2 manufactured by Apple, which belongs to the intelligent acoustic machine business. Affected by Apple's order cut, the revenue of this business increased from 123 in the first half of 2022400 million yuan fell to 92 in the same period of 2023500 million yuan, while the gross profit margin increased by 912% halved to 405%。
In addition, the intelligent hardware business brought nearly 30 billion yuan of revenue to Goertek in the first half of last year, and this part of the business is mainly to provide VR, AR and other product OEM services for head customers. After Apple suspended Goertek's production of Air Pods Pro2, the company had pinned its hopes on a breakthrough in the smart hardware business.
However, due to the price reduction of large customers, the gross profit margin of the smart hardware business was also cut in half, from 1279% fell to 587%。
As for Goertek's third largest business, the precision components business, due to the recession in the consumer electronics industry, revenue and gross profit margin both declined.
Gross margin** ultimately affects the profitability of the company's business.
In the first three quarters of 2023, Goertek achieved revenue of nearly 74 billion yuan, but the core profit from operating income was only 51.5 billion yuan, accounting for only 07%, that is, only 0. for every 100 yuan of business$7 pre-tax profit. In comparison, the median of the industry's top players is 355%。
It can be said that after being cut by Apple, the remaining business of Goertek seems to be difficult to make a profit.
The reverie of the OEM headset
For Goertek, the future partnership with Apple is crucial, including whether the production of Air Pods Pro2 can be resumed, and even whether it can be added to the Apple headset ** chain.
As early as February 2023, Guo Mingchi, an analyst at Tianfeng International, who is known as "the most Apple-savvy", said that Goertek would resume the production of Air Pods Pro2. However, on May 10, 2023, Goertek publicly responded that the product had not resumed production as of the first quarter of 2023.
Recently, Goertek in Vietnam in the announcement of the establishment of a factory mentioned that the business scope of Goertek Electronic Technology in Vietnam is the production of headphones, smart watches, VR&AR consumer electronics, and only a few days ago on January 8, Apple just announced that the headset Apple Vision Pro will be officially launched on February 2. The future partnership between Goertek and Apple is once again in reverie.
In response to investors' inquiries, Goertek did not clearly respond to the question of whether the establishment of a subsidiary in Vietnam is Apple's OEM headset equipment, and only said that it was due to tax considerations.
In fact, when Apple's headset Apple Vision Pro was first released, it was only reported that the product would be exclusively manufactured by Pegatron. However, Kuo Ming-chi believes that Pegatron may transfer production resources to Likai Precision, a joint venture with Luxshare Precision. Since Likai Precision is dominated by Lixun Precision, it is equivalent to Pegatron giving up the OEM qualification to Lixun Precision.
At present, the news has not been officially recognized by Apple, and it is not yet known who is qualified for Apple Vision Pro foundry of Apple headsets, and Goertek has recently set up a factory in Vietnam, which has made the OEM battle for Apple's headset confusing again.
Even if Goertek can obtain the OEM qualification of Apple Vision Pro for headset devices from Apple, it may be difficult to turn the company's performance around.
Unlike Air Pods, Apple's headset Apple Vision Pro is expensive. According to related reports, the starting price of Apple's headset Apple Vision Pro is $3,499, which is equivalent to more than 2 yuan50,000 yuan.
Due to the high price tag, the market is not optimistic about the sales of Apple Vision Pro, and TrendForce will sell about 500,000 to 600,000 units of Apple Vision Pro in 2024. In comparison, in 2022, Air Pods sold 85 million units.
Moreover, for the first-chain manufacturers, the OEM price difference between headphones and headsets is not as great as the price of retail terminals. According to the relevant institutions**, the single OEM of Apple Vision Pro** is 130 US dollars, and according to Guoxin**, the OEM of Air Pods** is 93 US dollars, which is not much lower than that of Apple Vision Pro OEM.
This means that the headset has a small volume and the foundry cost** is limited. If the headset order cannot be recovered, even if Goertek can participate in the headset chain, it will not be of much help.
What is the solution to apple dependence
Over-reliance on apples is a common problem for "fruit chain" companies. In addition to keeping an eye on Apple's orders, for Goertek, how to get rid of Apple dependence is also the key to future development.
From 2019 to 2021, Goertek's revenue from Apple accounted for 4065% rose to 4249%。
This is not an isolated case, the other two of the three major A-share fruit chain companies, Luxshare Precision and Lens Technology, are also in a similar situation.
Among them, in 2019, the revenue proportion of the top five customers of Lixun Precision is. 89%, and in 2021 the proportion were: 62%。Apple, the largest customer, has increased its revenue share by nearly 19 percentage points in two years.
The proportion of Lens Technology's orders from Apple to revenue increased from 43 in 201907% rose to 66 in 202149%。
"A small factory will go all out to ** Apple after entering the Apple ** chain, and the support for other customers will be weak. Apple is likely to be the sole pillar of the company's revenue. ”According to industry insiders.
It is not difficult to understand that "fruit chain" enterprises pour resources into apples.
An Apple business executive said that although the profit of Apple's orders is not necessarily the highest, it will definitely provide reasonable profits to the company, and there will be no reduction in product quality due to the squeezing of the first chain. At the same time, in the eyes of the industry, Apple's orders are relatively stable income, and other "non-fruit chain" merchants are under greater pressure.
In addition, Apple's management and innovation ability of the ** chain, as well as the industry benchmarking effect of entering the "fruit chain", and the recognition of the capital market, can bring gains beyond orders.
StillAs can be seen from the situation of Goertek, the risk of over-reliance on Apple is also obvious
Apple pursues the JIT (just in time) chain model of "low inventory and order at any time", and achieves this model to the extreme through fine management.
In general,Apple only provides the ** chain with the demand forecast in the next three months, which requires a quick response from the ** business. An Apple chain person told that when the market demand is good, Apple needs to be quickly increased in a week or even less; On the contrary, if the market response of a product is not good, Apple will directly cut the order.
According to the above-mentioned Apple ** chain source, Apple has very strict requirements for product yield, and if the yield rate cannot meet the standard during the trial production process, Apple will quickly switch to the first supplier.
"Apple is very good at using the 'catfish effect'. In the same link, Apple usually finds more than two ** business cooperation, even if one of them may be small, Apple provides technology and gives some small orders in the first two or three years can quickly be supported, there is nothing irreplaceable. ”He further pointed out that because Apple is meticulous in the management of the first chain, and even many materials need to be purchased through Apple, the first business has no secrets in front of Apple.
It is worth noting that Ming-Chi Kuo once broke the news that Goertek's lost order for Air Pods Pro2 was taken by the company's competitor Luxshare Precision.
Apple's first-generation Air Pods were launched in September 2016. In July 2017, in a test, Luxshare Precision won the first order of Apple's first-generation Air Pods with a yield rate of nearly 100%. Since then, Luxshare Precision has been the largest OEM of Apple's Air Pods, accounting for 60% of the market share.
Goertek began to manufacture Apple Air Pods in 2018, and the company has always been the second largest OEM of Apple Air Pods, accounting for 30% of the market share.
Fruit chain migration pressure
In the context of Apple's move from China, the "fruit chain" giant will inevitably fall into a dilemma.
In recent years, unexpected factors have caused a temporary shortage of Apple products, coupled with the pressure of the United States on Apple, for the sake of chain security, Apple has accelerated the transfer of the chain to Vietnam and India, and the trend of moving out of China has been unstoppable.
India's Minister of Commerce and Industry, Piyush Goyal, has publicly stated that Apple wants to increase the proportion of iPhone production in India from the current 5%-7% to 25%, and will assemble new Apple phones in India in the future.
JPMorgan Chase also pointed out in the research report that Apple will complete the target of 25% of the Indian assembly share by 2025. Ming-Chi Kuo believes that Apple's medium- and long-term goal is to produce 40%-45% of iPhones at Foxconn in India.
A person from an Apple chain manufacturer told him that Apple's contact person clearly told himHis company is required to set up a factory in Vietnam or India within a certain period of time, and the scale of production capacity is not required, but it must be.
In addition, many fruit chain people even saidApple's strategy is simple, a certain percentage of orders must be transferred overseas, and whoever has a factory overseas will be given orders.
Apple's transfer of the ** chain is intended to diversify the risk, but it is a group of "fruit chain" companies that bear the risk. In the context of Apple's "relocation", China's "fruit chain" enterprises inevitably need to cooperate with Apple's investment layout in emerging markets such as India and Vietnam.
But China's "fruit chain" giants have yet to find a successful formula in the above-mentioned emerging markets.
In India, one reason why Chinese mainland ** chain enterprises cannot expand in India is that after the Sino-Indian border conflict in 2020, India ** has strengthened its scrutiny of China's mobile phone manufacturers to application service providers, and tightened access permits for Chinese companies.
According to relevant reports, it was not until January last year that India approved the expansion license of China's "fruit chain" companies Luxshare Precision, Sunny Optics and YUTO Technology in India.
The company made a corresponding layout in India five years ago, and is still in a state of observation, and needs to be cautious, after all, the state of India is different from China, and the improvement of its industrial chain ecology is related to the construction of the country and the cultivation of talents. Wang Laichun, chairman and general manager of Lixun Precision, said that the layout of India is to value its huge domestic market, and for Chinese enterprises, Vietnam, which borders China and has more convenient logistics, is a better choice.
There are also "fruit chain" industry insiders bluntly said:"The Indian market is huge, but whether India's national conditions can make the company develop in the long term is a question mark. At least for now, Chinese mobile phone manufacturers have been punished in India, you have made money in India, can you take it? ”
In addition to Goertek, China's "fruit chain" enterprises currently set up factories in Vietnam also include Lens Technology, Luxshare Precision, Lingyi Intelligent Manufacturing, Meiyingsen, Bourne Optics, YUTO Technology and other enterprises, and the business has gradually extended from assembly to upstream parts, including glass covers, structural parts, etc.
However, as China's "fruit chain" enterprises continue to move to Vietnam, Vietnam's investment environment is also much worse than before.
The first is that the local cost advantage is decreasing.
A Chinese-funded entrepreneur in Vietnam said that more than two years ago, OPPO bought the right to use 40 hectares of land in Vietnam for 50 US dollars per square meter, and then this land has not been developed, and in 2023, it will be transferred to Goertek for 170 US dollars per square meter, an increase of more than 3 times.
At the same time, Vietnam's most competitive cost factor, labor**, has also risen.
10 years ago, the comprehensive cost of ordinary workers around Hanoi, Vietnam, was about 700-800 yuan, and by 2023, it has risen to 3200-3600 yuan, which is still advantageous compared with the cost of workers in the Pearl River Delta of about 6000-6500 yuan, but the monthly salary of Indian workers is only about 1500 yuan.
In addition, when the industrial chain is far from complete, Vietnam has even shown signs of labor shortage. A person in charge of a Chinese-funded enterprise in Vietnam said that it is becoming more and more difficult to recruit local workers, "one or two hundred people are easy to recruit, but it is also a little difficult to recruit more."
"Some factories in the south also have to recruit workers from Cambodia. ”Another Chinese-funded business person added.
"The policy dividend period for investment in Vietnam is three to five years at most, and it is basically at the end. ”There is a judgment of the person in charge of a Chinese-funded enterprise in Vietnam.
If you don't move, Apple will cut the order. Relocation, whether in India or Vietnam, is a big gamble. For Goertek and other Chinese "fruit chain" giants, I am afraid that they will continue to face this embarrassing dilemma in the future.
Reference: The forefront of entrepreneurship "Apple's new product is about to be listed, Goertek's investment in setting up a factory leads to conjecture".
Caixin, "Fruit Chain" Wayfinding".
Finance Eleven "Fruit Chain Relocation, a Big Gamble".