According to international e-commerce statistics, as of September 5, 2022, all local listed component distributors and enterprises have disclosed their performance in the first half of 2022. Among the 12 listed distributors, 9 companies achieved year-on-year revenue growth of mor

According to International E-commerce Information statistics, as of September 5, 2022, all local listed component distributors and enterprises have disclosed their performance in the first half of 2022. Among the 112 listed distributors of

html, 9 companies achieved year-on-year revenue growth, more than 70%; while 8 companies achieved year-on-year net profit attributable to shareholders, nearly 70%. Overall, against the backdrop of downward economic pressure this year, listed distributors have successfully stabilized their "basic market", made comprehensive efforts from the perspective of supply chain and industrial chain, and accumulated confidence in development. In terms of operating income of

, 9 of the 12 listed distributors achieved year-on-year growth this year, and the revenue of 3 companies decreased year-on-year, and the number of growing companies accounted for 75%. Among them, the top 3 companies with year-on-year growth rates are: Shannon Xinchuang (5817.82%), Yachuang Electronics (55.42%), and Liarda (36.89%); the three companies with year-on-year declines all ranged from -15% to -20%.

year-on-year, the supply and demand of the components distribution market in 2021 were both booming, and the revenue of only one of these 12 companies declined year-on-year. But judging from the total revenue of these 12 companies, the total in 2022 did not decrease, but rose by 22.3% year-on-year compared with 2021! The total revenue of 12 listed distributors in 2022 was 43.022 billion yuan, and the total revenue of the same company in 2021 was 35.176 billion yuan.

• needs to be reminded that Shannon Xinchuang's revenue increased by 5817.82% year-on-year, due to the acquisition of United Chuangtai as a wholly-owned subsidiary in 2021, and was included in the company's consolidated financial statements since July last year. The company changed its electrical machinery and equipment manufacturing business to electronic components distribution . In the first half of 2022, United Chuangtai achieved operating income of 8.521 billion yuan. In terms of net profit attributable to shareholders of

, there were 8 distributors that achieved year-on-year growth, and 4 decreased year-on-year. Among them, the top 3 companies with year-on-year growth were: Shannon Xinchuang (170.23%), Yachuang Electronics (134.79%), and Xinzhi Holdings (57.82%); the decline was concentrated in two ranges: -5% to -10% and -25% to -35%.

You should know that the net profit attributable to shareholders of these 12 companies achieved positive growth in H1 in 2021, and even 5 companies achieved triple-digit growth, up to 320.66%. Obviously, compared with the previous year, the poor market conditions in 2022 are more likely to be reflected in corporate net profit.

As for the reasons for the above performance changes, after analysis, the reasons for the decline are similar. For example, the slowdown in global economic growth, repeated epidemics, and industrial structural adjustments have become the dominant factors; but the reasons for growth are different, focusing on the "internal causes", which can be said to be "Eight Immortals show their magical powers across the sea."

(1) First of all, although the development of the electronics industry is under overall pressure, market changes are complex, and especially the sluggish demand for electronic consumer products, new economic industries such as electric vehicles , new energy and digital infrastructure have driven the demand for electronic components , and listed distributors in related fields benefit from this.

• 2022H1 revenue and net profit both increased by the top 3, Yachuang Electronics, whose sales revenue came from automotive electronics. In the first half of the year, through active expansion with customers, the company has laid the foundation for business growth, and the electronic components distribution business and power management IC business have both increased to a certain extent year-on-year. At the same time, from February 1, 2022, Yihai Nengda officially included in the company's consolidated financial statements. From February to June, Yihai Nengda achieved revenue of 168 million yuan, contributing part of the profits to the company.
• Runxin Technology's revenue and net profit in 2022H1 both achieved a growth of about 20%. According to reports, with the rise of emerging markets such as the Internet of Things and new energy vehicles, integrated circuit design needs to integrate multiple functional modules such as wireless communication, power devices, storage, and sensors. The company customizes and develops specialized ASIC chip and modules for local market segments and key customers. In the first half of 2022, the company's new businesses in automotive electronics, smart home and other fields grew significantly.
• hard egg innovation also achieved double growth. On June 10, 2022, " Ketong Xincheng " was officially renamed "Hard Egg Innovation", becoming a platform company with chip technology services + AIoTh smart hardware. The announcement disclosed that the demand for chips has been continuously raised under the accelerated development of industrial digitalization and domestic 5G construction, especially the strongest demand for industrial chips, which has also promoted the continued acceleration of the company's chip business.
• Xinzhi Holdings' revenue increased by 18.46% year-on-year, of which the communications product business increased by 59.6% year-on-year. The reason is that the MCP memory chips and RF PA chips used for cellular IoT modules promoted and sold by this business unit maintained rapid growth in the first half of the year. At the same time, the newly expanded sales of cellular communication modules have also made progress, driving the performance of this business unit to achieve significant growth.

(2) Secondly, component distributors are constantly increasing their efforts to extend from the intermediate links of the industrial chain to the upstream IC design field. High value-added products/services have the essential characteristics of high economic benefits. Therefore, distributors actively extending to upstream design can obtain higher returns through their professional IC design service capabilities, and even "transformed" from distributors to original manufacturers.

I believe this does not need to be explained too much, Weil Semiconductor is the most classic case. According to the semi-annual report, Weil H1 achieved revenue of 11.072 billion yuan and net profit attributable to shareholders of 2.269 billion yuan. Among them, the distribution business of semiconductor achieved revenue of 1.925 billion yuan, accounting for 17.45% of the company's main business revenue, an increase of 4.01% over the same period last year.

is actively expanding into the upstream IC design field and has begun to be effective listed distributors: Torch Electronics, Ruineng Technology, Liarda, Yachuang Electronics, Yingtang Holdings, Liyuan Information , etc. The following lists the revenue share of the 2022H1 distribution business of the 6 distributors mentioned.

• Torch Electronics: a subsidiary Tianji Technology is engaged in the research, development, production and sales of microwave passive components and film integration products. During the reporting period, Tianji Technology has submitted application materials to Shanghai Stock Exchange for the initial public offering and listing on Science and Technology Innovation Board , and received an acceptance notice on June 28, 2022, and the listing preparations are being carried out in an orderly manner.
• Ruineng Technology: Release full-forming plate making software to promote the further commercialization of full-forming weaving technology; RS2 series servo drive EtherCAT bus type and CANOpen bus type products have been successfully used in the 3C, lithium battery, woodworking machinery, intelligent robotics, and laser processing equipment industries and are sold in batches.
• Liarda: The company launched the Cat.1 module based on the EC618 platform of Yixin, further improving the product line; jointly released a new STM32MP development board with ST, developed a ST TMOS infrared sensor beta version, and jointly created a power management solution for automotive domain controllers, etc.
• Yachuang Electronics: The company's IC products have been successfully imported into Geely , Great Wall, Changan , BYD , Hyundai, FAW , Kia , Chrysler , Volkswagen, Xiaopeng , Ideal and other well-known domestic and foreign automobile manufacturers, and have achieved batch shipment through Tire1 or Tire2. In the first half of 2022, the company's self-developed IC sales were RMB 82.54 million, an increase of 211.19% over the same period last year. In addition, Yachuang Electronics has always planned to expand its R&D team in China. Given that Ochuangxin is engaged in analog circuit design and the founder has a technical background, the company will purchase 60% of the equity of Shenzhen Ochuangxin Semiconductor Co., Ltd. in cash of RMB 240 million.
• Yingtang Holdings: In May 2022, the company jointly signed the "Semiconductor Industry Cluster Project Implementation Cooperation Agreement" with the Shenzhen Lequn Co., Ltd. and Shenzhen Lequn Co., Ltd., a joint subsidiary, which plans to carry out cooperation with the "Yingtang Semiconductor Industry Cluster" project. In addition, the second generation of MEMS micro-galvanometer (CG0006AR) developed by Yingtang Micro Technology for the application of vehicle-mounted LiDAR ( lidar ) has been launched in July 2022 and is expected to be put into actual use in level 4 autonomous driving vehicles.
• Liyuan Information: During the reporting period, the company launched the first MCU product based on Cortex M0+ core (32-bit) launched in the fourth quarter of 2021 received a customer order and started shipping. At the same time, the MCU series products with the same core are launched, and the automotive certification for related products has been actively promoted. Currently, three products have been launched in total, eight models.
• Runxin Technology: During the reporting period, on the one hand, the company invested and established Shanghai Runxin Chuangxin Microelectronics Co., Ltd. in the Lingang New Area of ​​the China (Shanghai) Pilot Free Trade Zone, officially entering the field of semiconductor design and testing; on the other hand, it plans to cooperate with Shenzhen Simaichen Semiconductor Co., Ltd. in the design and development of relevant automotive-grade chips, IoT simulation and signal chain chips, and invested in it, and will pay 5 million yuan (or equivalent US dollars) to Simaichen as the intention fund.

(3) Whether it is taking the path of large-scale expansion or seeking efficiency from design capabilities, capital investment is the first step. It is observed that the listed distributors in 2022H1 have all promoted their respective fundraising cases, and even split them up and listed them.

fundraising:

• announced on the evening of April 26 that Yingtang Holdings plans to issue a private placement to raise funds of no more than 290 million yuan, which will be used for the research and development and industrialization projects of MEMS micro galvanometers of Shenzhen Yingtang Intelligent Control Co., Ltd. and supplement working capital.
• On July 5, the IPO application of Lierda Beijing Stock Exchange was recently accepted, intending to raise 299 million yuan to be used for the "Xianxin Phase III IoT Module Expansion Project", "R&D Center Construction Project" and supplementary working capital.
• On August 26, Shangluo Electronics issued an announcement stating that its issuance of convertible corporate bonds to unspecified objects has been approved by the China Securities Regulatory Commission. The total issuance of convertible bonds of by the company is not more than RMB 396.5 million, which will be used for Shangluo Electronics Supply Chain Headquarters Base Project, Shangluo Electronics Digital Platform Upgrade Project and Supply Working Capital.

spin-off and listing:

• As mentioned earlier, "Ketong Xincheng" was officially renamed "Hard Egg Innovation" on June 10, 2022. During this period, Hard Egg Innovation has been approved by the Hong Kong Stock Exchange to split its chip business, Ketong Technology, which was independently listed on A shares of in mainland China, thus expanding the group's development in the domestic capital market and chip market.
• Shenzhen Huaqiang has been orderly promoting the relevant work of "Huaqiang Electronic Network Group" on the GEM listing, and submitted a prospectus to the Shenzhen Stock Exchange on June 21, 2022, striving to pass the review and registration as soon as possible. If it can be successfully listed, Huaqiang Electronic Network Group will give full play to the functions and advantages of the capital market to accelerate business innovation and development.

(4) Although the huge domestic market in China is exciting, overseas markets are also indispensable. In the first half of the year, some listed distributors showed strong international competitive advantages, while others were actively deploying overseas markets to lay the foundation for future products and services to the world.

• Thanks to the growth of market demand, Xinzhi Holdings' independent distribution business (Mingguan International) has made great progress since 2021. In the first half of 2022, demand in the domestic market began to decline, and shipment amounts dropped sharply. However, as overseas electronic manufacturing industries began to resume work and production one after another, the imbalance of overseas supply chains was relatively obvious, and the shortage was serious. The group began to actively deploy overseas markets a few years ago, so the cumulative sales in H1 independent distribution business achieved a significant year-on-year increase of 75.6%.
• Liarda said that the company is actively exploring overseas markets and introducing its products to countries or regions such as Europe, America, Japan, Southeast Asia.
• Although Torch Electronics H1's performance data is lower than expected, it still further expands its international business through industrial integration and capital cooperation. According to reports, the second-level wholly-owned subsidiary Leidu International plans to acquire 74% of the equity of Singapore Maxmega Electronics PTE LTD for US$8.5 million, and complete the share delivery on July 28, 2022. Maxmega specializes in the sales and distribution of special passive electronic components and semiconductor products, and has rich experience in distribution in Southeast Asia. This acquisition will help the company develop the electronic components market in Southeast Asia.

shows that at a time when geopolitical risk prevention and control has become the "new normal", overseas markets still contain opportunities that distributors cannot miss.

Editor: Momoz