On February 14, Lixun Precision opened nearly 2% higher, and at one point it rose more than 6% in intraday trading. By midday, the share price was at 42.35 yuan per share, up 3.17%. Last Friday night, Lixun Precision announced that it planned to set up a joint venture with Chery to enter the new energy vehicle market.
According to the research summary released by Lixun a few days ago, under the news of "car building," the total number of institutions that came to the door at the weekend reached 221, in addition to Tanshui Spring, Social Security Fund, and Goldman Sachs. Cinda Australia Bank Feng Mingyuan, Xingsheng Global Xie Zhiyu, Castrol Fund Gui Kai and other fund managers also appeared on the research list.
Lixun made it clear in the survey that the company does not build complete vehicles, but cooperates with Chery New Energy to develop ODM business-building good cars for others, and this cooperation will also create a global ODM business precedent.
From a medium-to long-term point of view, Lixun's goal is still the key parts area-to become auto parts Tier 1, supply directly to the mainframe factory.
Lixun revealed that at present, the automotive business of listed companies is mainly auto parts, and in addition to traditional products such as connectors / connectors, low / high voltage vehicle wiring harness and special wiring harness, intelligent driving, power module, vehicle networking and other services have been added, and customers include Volkswagen, GM, Tesla, BBA and three major Japanese brands.
In addition, Lixun's research also explains several issues of concern to the market:
1. What is the specific situation of the joint venture company?
The joint venture company is mainly engaged in ODM platform development and vehicle assembly; the main target business will be the business of foreign traditional brand car companies and the new domestic SmartEV brand business. The company will be dominated by Chery, while Lixun Precision will cooperate in business, customers and other aspects.
At present, the ODM business has a relatively clear landing project, which is expected to be put into production in the next 12-18 months.
two。 Why choose ODM mode?
Both Lixun and Chery believe that "the arrival of (automobile) contract manufacturing mode is inevitable."
Most new smart car players have advantages in electric and intelligent technology, but they lack the basis of traditional cars, including platform development capabilities and experience, manufacturing qualifications and capabilities, supplier resources, distribution channels and so on.
ODM model can effectively shorten the problems of brand customers in terms of time to market and output, and "can choose high-quality customers to cooperate".
3. Why did you choose this time?
With the rapid development of electric and intelligent cars, Lixun said frankly that if it only depends on its current pace and speed, it is worried about missing the window; especially when there is an opportunity for ODM, the company is also worried about losing the opportunity to enter key parts.
The weak consumer electronics market has become a cross-border choice to build cars.
Some people believe that this cooperation will help Lixun open up new growth points and prepare for the rumored Apple car contract manufacturing business, but others believe that the new energy car racetrack is already too crowded, and Lixun has lagged behind its peers at the time of entry.
Indeed, Hon Hai (Foxconn) has already taken action to form an electric vehicle alliance, lay out car chips, and build cars in joint ventures in Saudi Arabia, Thailand and other places.
According to a report in Taiwan's Economic Daily today, Hon Hai's first electric car, Model T, will be officially delivered in early March, with a total of 30 to 50 units, and the commercial launch of electric vehicles will be officially launched. In addition, its Q3 will also deliver the first electric pickup passenger car, Endurance, to the US electric car company Lordstown.
At the same time, Lance Technology, Changying Precision and other A-share "fruit chain" manufacturers in the performance forecast, net profit growth in 2021 has declined compared with the same period last year. Under the worry of the low gross profit margin of mobile phone products and the weak demand in the consumer electronics terminal market, the new energy track profit space gives supply chain enterprises a new direction, and "cross-border" has become the choice of most consumer electronics manufacturers.
For the consumer electronics enterprises represented by the "fruit chain", will car-building be the solution? This time, can Lixun and Hon Hai gamble right? Puyin international analysts said that consumer electronics companies' strong electronic manufacturing capacity is urgently needed for car intelligence, and is optimistic about the relevant manufacturers "cross-border" new energy vehicles.
