On November 13, YAGEO, listed in Taiwan, China, hit the daily limit, while the US stock market (KEMET) closed up 12.86%. The US stock market plans to acquire US capacitor manufacturer Jimi for an all-cash transaction of US$1.8 billion and has been sought after by investors from both places. Behind the incident, what is revealed is Guoju’s integration strategy in the fields of capacitors and resistors.
both soared
Two listed companies, why did one listed company announce the acquisition of the other, and the stock prices of both companies rose sharply?
Investors expect that Guoju's acquisition will lead to a further increase in its industry control, thereby enhancing the profitability of the two companies.
KEMET, which was acquired this time, is one of the world's most well-known capacitor manufacturers. Its tantalum capacitor sales once ranked first in the world, especially in the field of passive electronic technology, and has a global sales and distribution network. At present, Jimei Electronics has two major business units: organic solid-state capacitors, thin films and electrolytic capacitors in China.
Looking at the dynamics of Guoju over the years, it is not an exaggeration to call him a "mergers and acquisitions maniac". In the past three years alone, there have been no less than ten mergers and acquisitions initiated by Guoju: For example, in June 2016, Guoju's subsidiary Zhibao acquired Kaimei; in January 2017, Guoju's subsidiary Qilixin merged Wangquan Technology for 4.7 billion yuan; in March 2018, Guoju's subsidiary Xinliqi merged Taiwan's second largest inductor manufacturer Meilei through share exchange, which is the component supplier of Tesla ; in May 2018, Guoju shares announced the acquisition of Pusi Electronics in the United States, and acquired all shares of Pusi Electronics for US$740 million...
"Giant" strategy
Industry media believes that the introduction of KEMET company is the most distinctive reaction that Guoju faces increasing market pressure in recent years. Because at present, the main market share of global MLCC belongs to Japanese, American, Korean and Taiwanese manufacturers, among which Japanese and Korean manufacturers focus on high-tech and high gross profit high-end markets, while mainland manufacturers cover mid- and low-end products. In recent years, mainland manufacturers, represented by Fenghua Hike and Torch Electronics , have also continuously launched production expansion plans. For example, Fenghua Hike invested more than 450 million yuan in 2018 to add 5.6 billion MLCC expansion projects per month. Torch Electronic raised about 447 million yuan in 2018 to be used for the small-volume MLCCh high-tech industrialization project. This has brought increasing competitive pressure to Taiwanese manufacturers, and Guoju, a representative of the Taiwanese passive component manufacturer, is naturally the first to be affected. With the addition of KEMET, Guoju will be more competitive in high-end components in the future and have greater capital in competing with Japanese and Korean manufacturers. At the same time, it is more conducive to further entering the high-end markets such as automotive electronics and industrial control, and taking the lead in mainland factories in product promotion and market strategy.
Industry insiders believe that Guoju Group's purpose is to acquire global production capacity. Time is not the focus. The key is to integrate production capacity, control the right to speak, and copy the successful model of chip resistors and MLCC. Especially Guoju Group has a wide range of sales channels, and few brand manufacturers are not their customers. Through the strategy of selling resistors, capacitors, and inductors, the status of flagship passive component giants is hard to shake.
MLCC price trend is worth paying attention to
Currently, the industry is mainly concerned about Guoju’s acquisition matters and how to affect the MLCC trend. In the second quarter of 2018, MLCC prices soared to a two-year high, with a maximum increase of 30 times shocking the world. But then the bubble burst and the MLCC returned to its origin.
This year, the MLCC market rebounded in August and September. Under the influence of the recovery of terminal demand, MLCC has finally waited for the golden moment of bottoming out and rebounding. After China's 5G officially started commercial use, the demand for MLCC increased, which is undoubtedly a major industry benefit for MLCC original manufacturers and channel vendors that have been sluggish for a whole year. In terms of
production capacity, in 2018, the passive component giant began to add MLCC production capacity, and the production time of the new production line was concentrated between the end of 2019 and 2021. Taking Japanese and Korean manufacturers as an example, Murata, Sunsuodian, TDK, and Samsung Motor did not make any expansion plans for MLCC in 2016 and 2017. Affected by the prosperity of the MLCC market, they announced their expansion plans in 2018.In addition to these four original factories, there are also Fenghua Hi-Tech , Guoju, Kyocera and Murata who all have corresponding expansion plans. The production time of the new production line will be concentrated between the end of 2019 and 2021. Among them, Japanese and Korean manufacturers are more concerned about high-end MLCC ( chip capacitor ) products for smartphones and automobiles.
The growth of the market is already certain, but the production capacity has also expanded. What is the situation between supply and demand still needs to be observed.
