The vertical integration of the industrial chain is accelerating, on the one hand, based on fluctuations in raw material prices this year, and on the other hand, the need for future cost control.
Recently, Hongli Zhihui announced that it will jointly purchase Dongguan Jinjin, which is jointly owned by Lin Lizhen, Lin Longzhen and Zhu Yili, with a wholly-owned subsidiary, Dongguan Liangyou Hardware Products Co., Ltd. (hereinafter referred to as “Liangyou Hardwareâ€). 70% equity of Hardware Co., Ltd. (hereinafter referred to as "Golden Hardware").
After the completion of the transaction, Liangyou Hardware and the company held 51% and 49% equity of Jincai Hardware respectively. The announcement said that in order to further develop the advantages of the wholly-owned subsidiary Liangyou Hardware in the injection molding and hardware industries, the industrial chain layout of Liangyou Hardware was broadened.
The announcement shows that the total value of the acquisition of Jincai Hardware is RMB 30,000, and the total amount of equity transfer is RMB 210 million. Pricing is based on a ten-fold P/E ratio of 30 million committed net profit for 2016.
At the same time, Hongli Zhihui will provide a loan or entrusted loan of no more than RMB 100 million to Jincai Hardware after the completion of the equity delivery of this transaction, which is dedicated to expanding powder hardware and purchasing CNC processing machines.
Jincai Hardware is mainly engaged in the development, production and sales of metal powder injection molding (MIM) products, providing services such as vacuum surface treatment (PVD) and CNC automatic machining (CNC). Metal Powder Injection Molding (MIM) is a new type of metal part forming technology that introduces modern plastic injection molding technology into the field of powder metallurgy.
Jincai Hardware's products are widely used in automobiles, power tools, medical equipment, electronic products, new jewelry products, etc., mainly used in the production of complex shapes and various small metal parts and micro parts.
According to the announcement, Jincai Hardware's revenue for the first three quarters of this year was 43.386 million yuan, and the net profit was 142.228 million yuan, completing 187.18% of the full year 2015 net profit.
The counterparty promised that the audited net profit of Jincai Hardware in 2016, 2017 and 2018 should not be less than RMB 30 million, RMB 36 million and RMB 45 million respectively. Hongli Zhihui said that after the completion of the transaction, the company's operating income scale and net profit indicators will be improved.
In recent years, Hongli Zhihui has continuously expanded its packaging capacity, automotive lighting and automotive-related vehicle network diversified business through the layout of the supply chain, which has enabled the company's operating scale and profitability to continue to increase.
According to the data of Hongli Zhihui's third quarterly report, the company's operating income from January to September 2016 was 1.571 billion yuan, up 38.51% year-on-year. The operating income for the quarter increased by 4.29% compared with the previous quarter; the net profit attributable to shareholders of listed companies was 193 million yuan. The year-on-year growth was 87.21%. The company's net profit for the quarter was down 23.75% from the previous quarter.
Hongli Zhihui said that in the first three quarters of 2016, market demand grew steadily, the company's business scale continued to grow, and its main business maintained steady growth.
In the main business of LED packaging, Hongli Zhihui continued to increase investment in lighting LEDs after its integration into Smect, and actively launched products such as flip-chip and COB packaging. The subsidiary Smect continued to expand its production capacity and strive to develop EMC. Packaging business.
In addition, through the acquisition of the bracket manufacturer Liangyou Hardware, further reduce the packaging cost and improve the overall product profitability.
Behind the depth of the supply chain is the stable performance of the company's product gross margin. The data shows that as of the first half of this year, the gross profit margin of Hongli Zhihui's overall products was 26.36%, an increase of 0.36% over the same period of the previous year.
Among them, the average gross profit margin of LED packaging products is 22.67%, which is basically the same as last year. This shows the effect of supply chain cost control in the context of the continuous decline in the overall price of the packaging industry.
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