Big news! Shenzhen Huaqiang may establish semiconductor group

The focus of work in 2018 will be on the semiconductor group

Shenzhen Huaqiang said that after years of transformation and development, the company has become a pivotal enterprise in the domestic electronic component distribution industry. The company's business volume, industry status, market influence and management ability in the distribution industry have basically equipped it with the conditions to directly negotiate with important original factories at home and abroad about the cooperation of production line agents. The establishment of the semiconductor group will help integrate the internal resources of the company's existing distribution companies, improve operational efficiency and capabilities, unify the operation and management platform, improve the ability to negotiate and cooperate with important international original production lines, and strengthen the company's endogenous in the distribution industry. The development of kinetic energy, change the current development mode mainly relying on outsourcing and mergers and acquisitions, so that the company's management and development path is more scientific and balanced.

Another focus of work is to build a long-tailed demand service platform for electronic components: in 2018, the company will further develop and develop based on the efficient trading system built by Jieyang Xunke, combined with the website back-end system of Huaqiang Electronic Network Co., Ltd. This system is upgraded to B2B and B2R (engineer) trading service platform, mainly serving the long tail demand of electronic components.

Huaqiang Semiconductor Group's specific plan

When it comes to specific planning, Shenzhen Huaqiang intends to transfer the equity of its authorized distribution companies to Huaqiang Semiconductor Group. Through the establishment of Huaqiang semiconductor group, the influence of Huaqiang brand in the authorized distribution industry of electronic components will be further strengthened externally. At home, each distribution enterprise will still operate independently. Huaqiang semiconductor group will provide support from the aspects of strategy, warehousing and logistics, information system, FAE, finance and capital. In the future, if a new agent line is added, it can be operated by a suitable distribution company or directly operated by Huaqiang Semiconductor Group according to actual conditions.

At present, the company's key industries are offline distribution of electronic components, online trading of electronic components, offline trading of electronic components and electronic terminal products, online distribution of branded terminal products, innovative entrepreneurship services and other properties.

Since the implementation of the new strategy in early 2015, the company has successfully landed 6 projects so far, including the issuance of shares in October 2015 and the payment of cash for the acquisition of Xianghai Electronics, the December 2015 cash acquisition of Jieyang Xunke, 2016 10 Monthly capital increase holding Hong Kong Qing Porcelain, January 2017 cash acquisition of Pengyuan Electronics, July 2017 cash acquisition of Sino Technology, April 2018 cash acquisition XinFei Electronics.

Through the implementation of the new strategy, the company's main business extends to the distribution of electronic components, directly into the transaction link itself, through the participation in transactions, direct service to the original factory and customers, has accumulated more and more valuable channel resources and transaction data. After the acquisition of the distribution companies entered the Shenzhen Huaqiang platform, they all showed a more-than-expected growth trend, exceeding the performance commitments and achieving an excellent series of mergers and acquisitions.

Current status and trends of the domestic semiconductor industry

Regarding why we chose to establish a semiconductor group at this time, Shenzhen Huaqiang spoke about the following:

(1) In recent years, domestic semiconductor companies have gradually cut into various domestic application fields and occupied a dominant position in some market segments, such as the security field and the digital TV field, which is the key development of Sino Technology. Domestic brands occupy a major market share. Huawei Haisi and Beijing Zhaoyi have become international first-line brands.

(2) In recent years, the state has strengthened its policy support for the domestic semiconductor industry and promoted the development of the domestic semiconductor industry.

(3) In recent years, the semiconductor industry sector has a relatively obvious phenomenon of capital and talent transfer from Silicon Valley to China.

(4) The local semiconductor design and manufacturing industry and local agents promote each other and develop synergistically. Local agents are an indispensable part of the local semiconductor industry chain. They are an important link between the upstream semiconductor design manufacturers and the downstream electronics terminal market. The development of local agents will accelerate the development of the local semiconductor industry.

(5) Domestic customers are increasingly aware of the importance of local products and resources in maintaining and promoting their stable development, especially strategic resources.

(6) The state regards the semiconductor industry as a strategic industry development. While focusing on the design, manufacturing and packaging and testing fields, it also increases support in the relatively lagging semiconductor materials and equipment, and begins to pay attention to the development of local distribution. For the entire semiconductor industry chain, it will usher in a historical opportunity of rapid growth.

Shenzhen Huaqiang 2017–2018 revenue

According to the 2017 annual report released by Shenzhen Huaqiang in March this year, its operating income has reached a new high since its listing. In 2017, Shenzhen Huaqiang's operating income was 8.298 billion, up 43.74% year-on-year; net profit was 577 million, up 30.96% year-on-year. The industry average operating income was 3.255 billion in the same period last year, up 34.11% year-on-year; the industry average net profit was 252 million, up 39.97 year-on-year. %.

The first quarterly report of 2018 released in April showed that its operating income was 2.13 billion Yuan, a year-on-year increase of 69.61%; the net profit attributable to shareholders of listed companies was 135 million Yuan, an increase of 72.17%.

The page contains the contents of the machine translation.