The penetration rate of fingerprint recognition function in smartphones in 2016 increased from 20% to 40%;
In 2016, Shenzhen Huiding Technology (603160) successfully completed the A-share IPO. That year, the company reached cooperation with first-line mobile phone brands such as Huawei , VIVO, and Xiaomi. In the year of listing, the company's revenue increased by 175% year-on-year, and the net profit attributable to the parent company increased by 126% year-on-year! In 2016, investors who were lucky enough to win the new shares of Huiding Technology can earn up to 158,600 yuan! It is equivalent to the down payment in a first-tier third-tier city! It is known as "the most profitable new stock in history."
, which has opened up its performance, continues in the first quarter report. Huiding Technology IFS hidden fingerprint recognition technology has been successfully equipped in Huawei P10 and Lenovo ZUK Edge, leading its competitors Fingerprint Cards AB (hereinafter referred to as FPC, FPC's revenue in the first quarter report of 2017 fell 54% year-on-year). However, behind this glamorous performance is the company's continued decline in gross profit margin, which has dropped from 66% before listing to 47%.
has a strong competitor Swedish FPC in front, and behind it is a domestic fingerprint chip manufacturer such as ATV, Mindray Micro, and Feenger. The challenges facing Huiding Technology cannot be underestimated. The net profit of 857 million yuan supports the total market value of 44 billion yuan, which is equivalent to the capital market's belief that Huiding Technology's annual profit growth rate will continue to exceed 50%. Is this expectation a bit high?
Indeed, in such a single and narrow market as fingerprint recognition, the company has obtained such a high valuation. This expectation is high! The higher the expectations, the heavier the fall.
In the past 10 years of rapid development of smartphones, mobile phone functions have been continuously enriched and improved. Although various functions and novel and interesting gameplay are recommended to consumers by whole machine manufacturers, most of the innovation drives are realized by component manufacturers. The speed of innovation of component manufacturers determines the perfection of the application experience. Fingerprint recognition technology is one of the most eye-catching and rapidly popularized technologies in the entire industry. Although the application of
fingerprint recognition to mobile phones was first implemented by Motorola, the poor experience did not attract consumers' attention until the release of the iPhone 5S in September 2013. Apple has optimized the fingerprint recognition function very well and expanded the fingerprint unlocking to applications such as payment outside of boot-up. Only then did the fingerprint recognition user experience truly impress consumers and the industry's popularity has greatly accelerated. After the iPhone 5S became popular, Huawei mate7 also achieved great success. Subsequently, flagship models from various companies have been adopted, and it has been popularized on 1,000 yuan models today. At this point, the mobile phone fingerprint recognition industry, which started with the iPhone 5S, has gone from its origin to maturity in more than three years.
In the rapid growth of mobile phone fingerprint recognition, the first half was led by Authen Tec and Fingerprint Cards AB. The former was acquired by Apple and exclusively applied to Apple's iOS devices, while the latter monopolized Android devices after its success on Huawei mate7. The temporary technology monopoly and explosive market demand have enabled the two companies to obtain unprecedented excess returns.
Driven by huge demand and huge commercial interests, fingerprint recognition technology quickly showed up many technological development routes: capacitive, optical, ultrasonic, capacitor + optical hybrid... Even the iris recognition , which does not rely on fingerprint, also joined this melee. During this period, many Chinese companies led by Huiding Technology (603160) joined the battle, officially announcing that this industry has entered the mid-market showdown.
Huiding Technology has developed rapidly since joining the battlefield. It was first widely used and recognized in mid-range models of various manufacturers, and then quickly adopted in flagship models of various companies. The victory of Huawei's flagship P10 in the first half of the year and Xiaomi's flagship Mi6 in the first half of the year is a milestone success, marking that Huiding Technology has officially entered the first camp of the industry.
The explosive growth performance is reflected in the company's stock market performance. After IPO, Huiding Technology has gained 20 daily limits, and it rose to 150 yuan in the short term. However, with the decline of the speculation of secondary new stocks, the company's stock price is now still around 90 yuan, and the total market value is stable at 40-50 billion yuan.However, if you want to become a technology bull stock that continues to grow, you cannot be blindly optimistic. Many unfavorable factors are affecting the growth of Huiding Technology:
First, as a technology-oriented industrial company, Huiding Technology is a typical single-product company. Compared with platform companies, single-product companies will stagnate once their technological advantages no longer develop. Its peer and rival Fingerprint Cards AB is a typical example. The main business encounters obstacles and no other business can make up for the losses, so there is no way to achieve the loss. Therefore, single-product companies are often short-lived and have few foundations.
Secondly, compared with competitors, Huiding Technology's leading advantage is not obvious. After Authen Tec was acquired by Apple, it was separated into the independent market of iOS. It was not technically backward, and no matter how good Huiding did, it could not seize its market. Although Fingerprint Cards AB lost its monopoly position, it did not decline, and its technology and market performance were still the style of giants. Samsung's iris recognition and the ultrasonic recognition solutions promoted by Qualcomm + Xiaomi also have their own advantages, and they can compete with Huiding's technology; more than a dozen competitors in mainland China and Taiwan, including Siliwei, Mindraywei, Duntai, Yilong, etc. are also striving to catch up. There are tigers in front and wolves behind, and they are fighting on a very small stage. It is hard to laugh at the end of the funeral.
Third, the smartphone market has disappeared, the mobile phone market has entered the second half of competition, and a situation where a few oligopoly monopolizes will soon form. According to data from survey agency TrendForce, smartphone shipments in 2016 were 1.36 billion, an increase of only 4.7%, and growth is expected to be slower in 2017. When the market enters an oligopoly pattern. As a component manufacturer, if there is no monopoly technical advantage (such as Samsung's OLED screen), its bargaining power with the whole machine manufacturer will become very weak and profits will become difficult. This situation has happened repeatedly in the era of analog machines and digital machines, and it is hard to say that it will be an exception in the era of smart machines.
Will Huiding Technology become a bull stock that continues to grow? It doesn't seem to be very optimistic.
to be continued...
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