Automation testing industry is an interdisciplinary technology-intensive industry. As an excellent equipment supplier in an industry, it not only needs to master multiple technologies such as machinery, electronics, testing and measurement, software algorithms, but also needs to master the technological changes of the serviced industry at any time, and innovate and update design concepts as the materials and process processes of the serviced industry are changes.
In the early stages of the development of the FPC industry, its leading companies were basically Japanese companies. After entering China, they still used FPC test fixtures provided by Japanese and Korean suppliers. Oat Technology overcomes technical difficulties such as traceless grabbing, precise positioning, non-destructive probes, and visual sorting in the FPCA production and inspection process, and realizes full automation of the FPCA rear-channel inspection process, greatly improving industrial efficiency. So how good is this company? Whether there is huge room for development will be studied and discussed together.
Domestic FPCs are rapidly developing
Oat Technology is a high-tech enterprise focusing on the research, development, design, production and sales of automation and intelligent testing equipment. Based on a variety of testing technologies in the fields of precision machinery and electricity, optical, and sound, combined with automatic control, image recognition, deep learning algorithms and other technologies, it has developed a series of products such as testing fixtures, automated testing equipment, and intelligent visual inspection equipment. What I said is very unclear, but looking at the company's downstream product applications, you can roughly understand the company's business. The test equipment of the issuer of
is currently mainly used in the field of FPC, namely flexible printed circuit board testing. FPC is a type of PCB, that is, printed circuit board. In the early stage, it was mainly used for the connection parts of electronic products and partially replaced cables. However, with the advancement of materials and processing technology, the FPC process has gradually matured, and complex circuit processes such as multi-layer boards and blind holes can be made. And this kind of FPC is the following figure:
Source: Prospectus
In recent years, China has gradually become the main production area of FPC. The output value of in China's region has continued to increase. According to Prismark's data, the output value of China's FPC industry reached US$4.63 billion in 2016, and the output value of FPC (including foreign-funded enterprises) in China has increased from 23.7% in 2009 to 42.5% in 2016.
FPC customization drives the development
Because FPC has the characteristics of dense wiring, light weight, thin thickness, easy bending and easy damage to surface materials, its testing and automation face technical problems such as traceless grabbing, precise positioning and multi-type defect recognition. Therefore, it has always been difficult to design and manufacture FPC testing and automation equipment. Since its establishment, Oat Technology has been committed to helping customers improve their automation and intelligent manufacturing levels. After years of technological innovation, it has formed a series of core technologies, which have effectively improved customers' production efficiency, product quality, and production automation and intelligence.
However, FPC automation testing equipment has strong "customization" characteristics, and the product demand in downstream industries has a direct impact on the automation testing equipment industry.
Important application areas of smartphones
Consumer electronics, automotive electronics, and communication equipment are the three important application areas of FPC. Among them, consumer electronics accounts for the largest proportion among the three major fields, and the main terminal products include smartphones, tablets, PCs, smart wearable devices, etc.
Source: Prospectus
In 2017, the iPhone X model released by Apple integrates OLED full screen, facial recognition, wireless charging and other functions, breaking the single-player FPC usage to more than 20 pieces, with a value of more than US$40. The iPhoneXS released in 2018 increased the usage of stand-alone FPC to 24 pieces. Under the leadership of Apple, other brands of mobile phones are also following up quickly. The single-player FPC usage of Samsung mobile phone is about 12-13 pieces, and the single-player FPC usage of domestic high-end models Huawei, OPPO, VIVO, etc. is about 10-12 pieces, but there is still a lot of room for growth compared with Apple models. This is a major growth point in the future, and domestic mobile phone technology is still more inclined to imitate Apple.
Oatmeal Technology pointed out that with the innovation and upgrading of smartphones, FPC is required in applications such as fingerprint recognition, multi-camera, full-screen, wireless charging, and face recognition. The scale of the FPC automation testing equipment industry will grow with the increase in smartphone functions.In 2017, the iPhone X model released by Apple integrated OLED full screen, facial recognition, wireless charging and other functions, breaking the single-player FPC usage to more than 20 pieces, with a value of more than US$40. The iPhone XS released in 2018 increased the usage of stand-alone FPC to 24 pieces. Under the leadership of Apple, other brands of mobile phones are following up quickly, and the future market size is expected to grow.
gross profit margin declined, competition intensified
Oatmeal Technology achieved main business revenues of RMB 213 million, RMB 229 million, RMB 244 million and RMB 36 million, respectively, with steady growth, with an annual compound growth rate of 6.97%.
: Differentiate by product category, the company's main business revenue can be divided into three major sectors: automated testing equipment, testing fixtures, accessories and other sectors.
Among them, the proportion of the company's revenue in automation testing equipment obtained during each reporting period is 79.73%, 85.94%, 88.75% and 77.78% of the main business revenue, respectively, which accounts for a high proportion and is the main source of the company's revenue.
Source: Prospectus compiled by Daoke Chuang
Compared with industrially developed countries such as Germany, the United States, and Japan, my country's automation equipment industry started late, and its production scale, product grade, and technical level are still a certain gap with world-renowned enterprises. However, Oat Technology's customers currently cover the top seven of the world's top ten FPC companies, including Pengding Holdings, Nippon Qisaki, Sumitomo Electric, Japan Fujikura, Higashiyama Precision, Yongfeng Group, and Taijun Technology, and has developed into suppliers to Apple, Google, and other companies, the world's leading consumer electronics brands.
's high-quality leading customer resources have established the company's leading position in the FPC testing field and have become the core supplier of leading companies in the FPC industry.
consumer electronics industry, this industry has the characteristics of fast product updates, fierce competition, price sensitivity and strong cyclicality. Companies engaged in this industry often cannot sell their inventory and eliminate their technology if they cannot keep up with it. The gross profit of Oat Technology also indirectly reflects that the industry is gradually undergoing technological updates.
Company's comprehensive gross profit margins from 2016 to the first quarter of 2019 were 66.35%, 55.02%, 59.40% and 54.59% respectively, showing a downward trend overall. Compared with the same industry companies, Huaxing Yuanchuang and Changchuan Technology, the company's comprehensive gross profit margin is at a relatively high level, and the trend of change is similar.
Source: Prospectus Daoke Chuang compiled
light asset operation
The current assets at the end of each reporting period were 249 million yuan, 397 million yuan, 456 million yuan and 453 million yuan, respectively, accounting for 96.18%, 97.34%, 96.17% and 96.40% of the total assets, respectively.
issuers mainly organize production using the "sales-based production" model. After receiving customer orders or intentional needs, the issuer conducts customized research and development, design and production according to customer requirements. The company currently adopts a light asset operation model, with autonomous processing of emergency key components, and non-emergency or non-critical components mainly adopts a combination of independent production and outsourcing processing of , thus forming a product production model of "independent production + outsourcing processing".
Summary
The promotion of the mobile Internet, the upgrading of 5G communication network, the arrival of the era of digital information and big data, the market demand for emerging consumer electronic products such as mobile smart terminals has shown rapid growth, prompting electronic product manufacturers to increase their investment in production line automation equipment, effectively promoting the development of the automation equipment manufacturing industry. The overall development of the industry is still very considerable. The decline in gross profit margin is an inevitable phenomenon in the emergence of new technologies in the industry. In the face of foreign technology updates, whether products can be continuously launched is the subsequent focus of Oat Technology.
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Author: At that time Source: Daoke Chuang
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