Can The High Growth Road Of Wentai Science And Technology Be Sustained?

More than a month after the unconditional meeting on the acquisition of the remaining equity of Anshi semiconductor, Wentai technology released the report card of the interim report.

On July 19, Wentai technology announced that it expected to realize net profit of 1.6 billion yuan to 1.8 billion yuan in the first half of the year, with a year-on-year increase of 715.50% - 817.44%.

Boosted by the news, Wentai technology's share price rose and closed at 142.94 yuan / share, up 6.9% at the end of trading.

Wentai technology said that the reason for the performance increase in advance was that on the one hand, it benefited from the strong growth of the communication business, on the other hand, it consolidated the statements with the shareholding ratio of 74.45% of Anshi group, resulting in a substantial increase in net profit.

Among them, Wentai's acquisition of Anshi group has a significant impact on its performance and share price. Thanks to the consolidation of Anshi group, its performance in 2019 has increased significantly; its share price has risen since this year after breaking through 100 yuan, reaching 171.7 yuan per share, and the market value has soared from 20 billion yuan a year ago to more than 160 billion yuan today.

In June this year, Wentai technology's acquisition of the remaining equity of Anshi group was unconditionally approved by the China Securities Regulatory Commission. So far, Wentai technology holds 98.2% of the shares of Anser, becoming the largest semiconductor listed company in China. Analysts generally believe that after the company's accession to Anshi, the two companies have synergy in many aspects such as downstream market, products and technology, so as to realize the simultaneous development of communication and semiconductor business.

Performance growth exceeded expectations

The net profit of parent company increased by - 714.4 billion yuan in the first half of this year, and the net profit of parent company increased by - 714.4 billion yuan on year-on-year basis.

On the other hand, compared with the first half of last year, Aetna group has achieved a strong increase in the number of international customers in the same period of last year. On the other hand, Aetna group has achieved a strong increase in the number of international customers in the first half of 2020 74.45% was included in the consolidation scope, resulting in a substantial increase in net profit.

This achievement was called "beyond expectations" by market participants.

"In the macro environment, the industry environment is not very prosperous, the company's performance can be said to achieve adverse growth, mainly because of the company's progress in expanding business, looking for big customers, especially in expanding overseas business." On July 20, the person in charge of Wentai science and technology told the reporter of the 21st century economic report.

After the completion of the annual report in 2019, the proportion of shares of Aetna's overseas journalists increased from 53.74% in the previous year to 45.74% in the annual report. With the spread of overseas epidemic this year, Wentai technology, as the leader of consumer electronics ODM (commissioned design and manufacture), seems not to be affected by the epidemic.

"Despite the global impact of the epidemic, the company is still shipping as usual," the person in charge said

"I'm afraid the performance is more from abroad. In addition, anser's profits are very important and should be a major contribution. " Zhang Xiaorong, President of the Institute of deep science and technology, former senior vice president of CITIC Securities and chief Internet analyst, said.

And industry insiders believe that due to the impact of the overseas epidemic, on the contrary, there is a supply gap. Tianfeng securities research report pointed out that due to the impact of the epidemic, the supply capacity of overseas international semiconductor device companies has declined, and Italian semiconductor, Infineon and Amphenol have all reduced the operating rate, and some factories have even stopped production. In addition to the Philippines and Malaysia factories with limited production capacity due to epidemic prevention and control measures, the Hamburg wafer plant in Germany, Manchester wafer plant in the UK and Guangdong sealing and testing plant in China are all in normal production and operation.

Therefore, due to the decrease in the supply capacity of overseas semiconductor devices, the industry is expected to benefit from the shortage of semiconductor devices and increase the price this year. It is optimistic that the profitability of the company's Anshi semiconductor will be enhanced.

Synergy needs to be enhanced

It is worth noting that just in June this year, Wentai technology's acquisition of the remaining equity of Anshi group was unconditionally approved by the CSRC, and Wentai technology's shareholding in Anshi rose to 98.2%. Up to now, the consolidated equity ratio of Anser is 74.45%.

In other words, with the further integration of Anshi group into Wentai science and technology report, the latter's performance will also increase.

"The detailed time node will be announced later. The latest progress is that the final delivery has not been completed. Once the delivery is completed, the remaining equity will be included in the statement." The relevant person in charge of Wentai technology told reporters.

In 2019, Wentai technology completed the acquisition of 79.98% (after penetration) equity of Anshan Group with 26.854 billion yuan, and became famous in the first World War. The latter is a world-famous semiconductor company and occupies a leading position in the industry. Since then, Wentai Technology launched another acquisition, with 6.334 billion yuan to acquire the remaining equity of Anser, with the shareholding ratio increased to 98.2%.

"Leader + customer increase + share expansion + capacity increase are all good news, which is conducive to long-term development. Therefore, they have also carried out equity incentive, which is also conducive to stabilizing the team." Zhang Xiaorong said.

From the perspective of the industry chain, it is generally believed that the industry chain will play a synergistic role after the acquisition.

According to the data, Anshi Group maintains a leading position in the subdivided fields of diodes, transistors, ESD protection devices, logic chips, MOSFETs, etc., and its products are widely used in mobile phones, PC, IOT, automobile and other fields, and its customers include midstream manufacturers and downstream electronic brand customers. Wentai technology is in the middle of the industrial chain, providing R & D and intelligent manufacturing services for global mainstream electronic brand customers. Its upstream main suppliers include electronic components including semiconductors. Therefore, Aetna's technology industry is in the upstream and downstream.

"At present, Anshi quickly cuts into the domestic supply chain to replace overseas components, mainly due to the introduction of existing customers of Wentai technology and the domestic substitution. Due to the shortage of production capacity, Anshi semiconductor has greatly expanded its production capacity at home and abroad, and its profitability will be significantly improved after the capacity is opened. At the same time, Anson semiconductor has been developing overseas for many years. Wentai technology will ensure the independence of Anson and further realize the internationalization of Wentai's business map. " Tianfeng securities research paper pointed out.

From the business point of view, after the completion of the acquisition, Wentai's ODM business and semiconductor business will also go hand in hand.

"ODM business is expected to maintain rapid growth. With the global epidemic turning point, the future consumer demand is expected to continue to warm up. On the semiconductor device side, it is expected that the semiconductor companies will continue to benefit from the increase in semiconductor device prices A semiconductor industry analyst said.