Today, with the rapid global development of 5G and the rapid rise of the IOT (Internet of Things) industry, Fibocom (300638), as a provider of Internet of Things wireless communication products and technology solutions that has been in the industry for many years, is the world’s leading wireless communication model. Leading companies are "walking against the wind": In the first half of the year, the global COVID-19 pandemic and the tightening of restrictions on Chinese technology companies by the United States led Fibocom to achieve a year-on-year growth of more than 70% in net profit, and its share price also doubled during the year. .
"Fibocom has developed very well in the past few years, mainly because the track is good, but it still has to work hard." Recently, the high-quality development of listed companies in the Securities Times has entered the Guanghetong. Securities Times Deputy Editor-in-Chief Wang Bingyang and Guanghe Zhang Tianyu, the chairman of Tongtong, started an in-depth dialogue.
Interview: Wang Bingyang, Deputy Editor-in-Chief of Securities Times
Guest: Zhang Tianyu, Chairman of Guanghetong
The "little giant" that broke out against the trend
Since the beginning of this year, the sudden outbreak of new coronavirus pneumonia has disrupted the pace of the world. For a time, many industries such as catering, tourism, aviation, clothing, etc. have fallen into difficulties, and they are still in a state of "recovery".
The Internet of Things industry was also in chaos early this year, but they are different from the aforementioned industries in that they do not have no orders, but are affected by the epidemic. Foundry workers did not arrive on time and the company was unable to supply products to customers on time.
Guanghe Tongbian is a typical case. The company is mainly engaged in the design, research and development and sales services of wireless communication modules and communication solutions in the application industry. Its wireless communication modules are mainly used in mobile payment, mobile Internet, car networking, smart grid, security monitoring and other fields. Two market segments, POS machines and notebook computer IoT modules, are in a leading position.
"After the outbreak of the epidemic at the beginning of the year, our domestic production had problems because all the company's products were produced by outsourcing, and they had long-term entrusted manufacturers such as BYD and Hengchangsheng to carry out production and processing. Their workers were not on duty and the products could not be produced normally. , But the company had a lot of orders, so the pressure on our supply chain was particularly high at the time. In order to ensure the normal supply of products, the company and the factory worked hard to overcome difficulties and worked overtime.” Recalling the scene at the beginning of the year to reduce the impact of the epidemic on the company, Zhang Tianyu, who majored in science and engineering, did not speak endlessly, but the words "anti-epidemic is not easy" behind it were difficult to conceal. "After domestic production returned to normal, overseas epidemics broke out again, and the company fell into supply chain crisis such as overseas chip shortages."
The crisis brought about by the epidemic is now difficult for everyone, but Zhang Tianyu clearly understands that " although the epidemic is dangerous, it is also organic ."
The epidemic really opened another window for Guanghetong. According to Zhang Tianyu, the laptops that used the company’s wireless communication modules were mainly high-end business laptops to meet the needs of business people to access the Internet and work anytime and anywhere. However, after the large-scale outbreak of the epidemic, the demand for remote office and online education in overseas markets has greatly increased. Drive the company's notebook computer related module orders to increase more than expected.
But for Guanghetong, it is now ushering in a bigger development opportunity-the Internet of Things. With the acceleration of 5G construction, the Internet of Things, as one of the inevitable trends in the future, has quietly pressed the fast forward button. GSMA statistics show that as of the end of 2018, the scale of global cellular IoT connections exceeded 1 billion; in 2019, my country exceeded 1 billion. In January 2020, the number of global NB-IoT connections exceeded the 100 million mark, and the growth driver came from China; in February, the number of NB-IoT connections in China exceeded the 100 million mark.
The relationship between the Internet of Things Tuyere and Guanghetong can be summarized in one sentence: the Internet of Things industry continues to grow at a high speed, and wireless communication modules, as a bridge to realize the function of "things" and "things", will also usher in rapid growth.
At the “Light Up Shenzhen, 5G Smart City” press conference held recently, a reporter from Securities Times·e Company learned from a number of wireless communication module companies on the scene that the industry’s demand for 5G NB-IoT related modules began in the second half of last year. A big increase, generally showing a multiplication trend.
Opportunity awaits those who are prepared. Years of intensive cultivation in the field of wireless communication modules have created the Internet of Things. As the advent of the Internet of Things, Fibocom can quickly undertake a wide range of wireless communication module market needs, and years of intensive cultivation in the Internet of Things such as notebooks and POS machines. , And it is also destined that after the outbreak of the epidemic, most of the demand for the Internet of Things modules such as notebooks and POS machines will eventually flow to Guanghetong.
The recently disclosed Fibocom semi-annual report further proves everything. In the first half of this year, Fibocom achieved operating income of 1.266 billion yuan, a year-on-year increase of 47.42%, and net profit of 138 million yuan, a year-on-year increase of 70.78%. The company stated that the Internet of Things industry is developing well. The company actively promotes the resumption of work and production, seizes market opportunities, further increases R&D investment in new technologies and new products, and strives to expand domestic and foreign markets to ensure stable business growth.
Corresponding to the company's performance, Guanghetong's stock price also skyrocketed. As of August 18, Fibocom has risen by more than 110% so far this year, becoming one of the few A-share doubling stocks this year. Its market value has also approached 18 billion yuan. In the same period, the A-share Shanghai Stock Exchange Index rose by about 13 %, the ChiNext index rose by about 50%, Guanghetong has far outperformed the market. Currently, Fibocom’s latest closing price on September 11 is 58.34 yuan per share, up nearly 70% from the beginning of the year.
Addition "calculation" with the Internet of Vehicles
On the track of the Internet of Things, there is a very certain subdivision field that will be applied first, that is, the Internet of Vehicles, that is, the vehicle is used as the information perception object, and the new generation of information and communication technology is used to realize the car and X (That is, the network connection between cars and cars, people, roads, and service platforms) provides users with safe, comfortable, intelligent and efficient driving experience and traffic services.
Fibocom has continued to become an active stock in the capital market this year, which is also inseparable from the company's layout in the Internet of Vehicles.
It is understood that Fibocom has been involved in the Internet of Vehicles for more than ten years, and the company's Internet of Vehicles communication modules occupy a leading position in the industry. The company once provided Intel Asia-Pacific R&D Co., Ltd. with a reference design for a special solution for the Internet of Vehicles. After the listing, the company raised funds for the "Car-level wireless communication module construction project", focusing on providing vehicle-level LTE wireless communication module products for pre-installation customers of the Internet of Vehicles. .
In terms of customers, Fibocom has many high-quality customers in the field of Internet of Vehicles, such as automotive system suppliers SEG Navigation, Boshijie, Huabao Technology, BYD, etc. Especially in the field of front-mounted vehicles, some BYD models have been equipped with company products.
In late July this year, Guanghetong announced that it is increasing the Internet of Vehicles. Fibocom intends to increase the capital of Shenzhen Ruiling Wireless Technology Co., Ltd. (Ruiling Wireless), a company that Fibonacci shares, with Shenzhen Venture Capital and Shenzhen Qianhai Red Soil M&A Fund for 229 million yuan. After completion, Guanghetong will occupy Ruiling Wireless has a registered capital of 49%. After the capital increase is completed, Ruiling Wireless plans to acquire the related assets of the in-vehicle pre-installation business of Sierra Wireless, the world's leading wireless communication module company, for approximately RMB 1.154 billion.
According to Fibocom’s announcement, the current industry leaders in the automotive OEM market are mainly Sierra Wireless, LGE, Continental, Huawei, Gemalto, Telit and other leading companies. According to information provided by Sierra Wireless, the target business in 2018 will be in the field of automotive OEM cellular modules. The market share is about 20%, ranking first in the industry.
"Through this acquisition, the company quickly completed the layout of global automotive communication modules and can quickly enter the global automotive supply chain. It originally took 3-5 years to complete the road, but now it only takes 1-2 years to complete it. "Talking about the company's car networking business, Zhang Tianyu is confident, "We are very optimistic about the company's future development in the field of vehicles."
Fibocom also pointed out in response to the inquiry letter from the Shenzhen Stock Exchange that the customer certification and introduction cycle for the automotive OEM market is relatively long, usually 1-2 years. Overseas OEMs have more stringent technical requirements and the qualification certification cycle takes 3 years. about. Therefore, on the whole, the automotive front-mounted communication module market has higher industry barriers, and the industry has an obvious first-mover advantage. The target business has many stable and high-quality customers in the field of Internet of Vehicles, including VW (Volkswagen Group), PSA (Peugeot Citroen Group) and FCA (Fiat Chrysler Automobiles) and other world-renowned automakers. Good customer resources provide a guarantee for the continuous and stable development of the target business, and the 5G era is expected to set sail in the field of Internet of Vehicles. In the long run, the underlying business is expected to maintain its market first position for a long time and continue to expand its market share.
Fibocom is serious about the layout of the Internet of Vehicles. Stepping into August, Fibocom added to the Internet of Vehicles and announced a strategic investment in Xi'an Liancheng Intelligent Technology Co., Ltd., which is committed to the application of Internet of Vehicles C-V2X.
According to industry research reports, the current global annual car sales are about 80-90 million vehicles, and the global networked car penetration rate is low. Under the influence of external and internal factors, the penetration rate of network connection is expected to continue to increase, and the penetration rate of global car networking is expected to exceed 40% in 2022. Internet connection will become the standard configuration of future automobiles, and the Internet of Vehicles will cause huge changes in the automotive industry. Especially as 5G enters the peak construction period in 2020, the Internet of Vehicles has attracted more attention.
The vehicle-mounted front-mounted cellular module integrates chips, PN-type devices, crystal devices, resistance-capacitance sensing components and other structural components on a printed circuit board to provide a networking interface for downstream car networking OEMs. It is the Internet of Things access network and positioning Key equipment. Under normal circumstances, each additional number of connected cars will add 1-2 communication modules. According to data from the Ministry of Industry and Information Technology and industry research reports, the market size of automotive front-mounted cellular modules in 2020-2023 is expected to be 6.5 billion yuan, 9.7 billion yuan, 13.3 billion yuan and 16.3 billion yuan, respectively. The overall market prospects are broad.
Counterattack from trader to technology leader
The growth history of Guanghetong is also full of legends.
The company started as a trader. During the nearly ten years from 1999 to 2008, Fibocom's main business was the agency of Motorola's wireless communication modules and positioning modules (GPS).
Interestingly, in March 2017, when Fibocom successfully landed on the Growth Enterprise Market and became the first domestic IoT module manufacturer to land on the capital market, its revenue and net profit in 2016 were only 344 million yuan respectively. , 40.32 million, but as early as ten years ago, Guanghetong’s revenue was over 100 million.
"When we first acted as an agent, the days were actually pretty good. There were not many people. There were more than 20 people with a sales of 100 or 200 million a year, and then a profit of 10 or 20 million. Because at that time, the Motorola brand was very good. The company uses our products and does not require much technical input, just technical support.” Recalling his entrepreneurial journey, Zhang Tianyu slightly missed the comfortable days when he was an agent.
After the smooth development, Fibocom has further deepened its cooperation with Motorola. In 2005, Fibocom extended the cooperation to the technical level and established the Motorola Asia-Pacific M2M Technical Service Center in China; in 2008, Fibocom began to provide Motorola ODM.
But the weather is unpredictable. "If we want to talk about a turning point in the company's development, in addition to being listed in 2017, 2008 is a major turning point." Zhang Tianyu told a reporter from Securities Times and e Company.
According to reports, in 2008, Motorola’s mobile communications department was acquired by Telit, a foreign company. The original contract between the department and Guanghetong was completely invalidated. At that time, there were only two roads for Guanghetong, or they agreed to Telit’s request. Acquisition, or transform to independent research and development, and take the road of independent brand.
Zhang Tianyu chose the latter. In 2008, Fibocom officially promoted its own brand Fibocom wireless communication module, mainly using products developed based on the original Infineon platform.
“It’s been a great time as an agency. When it comes to independent development, it’s too difficult. The most important issue is talent.” Zhang Tianyu said that at that time China actually had a lot of communication talents, but as an unknown company, it had to attract It is difficult for some outstanding talents to come in, so fortunately the company had some colleagues who were automatically on duty at the time, and the company had made some equity incentives, and everyone started a business together.
Another difficulty in starting a business is funding. "We mortgaged our house to the bank for a loan. Looking back on the first two or three years, it was really difficult. Fortunately, everyone worked together to persevere. From 2010 to 2011, the company's development situation slowly opened up, and the company started in 2012. Planning for listing." Zhang Tianyu said that after going public in 2017, the company has entered a period of accelerated development.
Turning the clock back to the present, in 2019, Fibocom has revenue of 1.915 billion and net profit of 170 million. So far, Guanghetong has achieved positive growth for ten consecutive years, which is rare in the communications industry. That year, the company's module shipments were 15 million sets, ranking 6th in the world. According to predictions from relevant agencies, after the company announced in July that it plans to acquire Sierra’s in-vehicle business assets, Fibocom will be promoted to the second place in the world and sit firmly in the first camp of global module manufacturers.
Of course, the development of Fibocom has been inseparable from its continuous high R&D investment over the years. In 2019, R&D expenditure exceeded 200 million yuan, accounting for 10.67% of the company's operating income during the same period. In the first half of this year, the company continued to increase R&D investment, totaling 141 million yuan, accounting for 11.13% of the company's revenue during the same period. As of June 30, 2020, the company has 1,058 employees, of which R&D personnel account for more than 60%.
In terms of research and development results, as of the end of 2019, the company has accumulated 29 invention patents, 41 utility model patents, and 2G/3G/4G/5G communication protocol stack software development technologies for wireless communication modules and their application industry communication solutions. 46 computer software copyrights.
"In the 2G, 3G, and 4G era, the company's technology has always been in the stage of catching up with global technology, and by 5G, the company's technology has risen to the stage of leading global development." Zhang Tianyu introduced.
Looking forward to the future, Zhang Tianyu’s goal is determined: "The company is on a very good track. The Internet of Everything has just begun. In the future, 5G will also achieve Industry 4.0. A large number of devices around the world need to be connected. This provides the company with room for rapid development. We are based on the company’s own business communication module, deeply digging into industry needs, and doing thorough research in some subdivided vertical fields."
Reporter's observation: The last laugh is often those companies that can actively respond
As a listed company with a market value of close to 20 billion, from the outside world, Guanghetong is currently successful, and the secret of its success is also eager to crack.
the Rainbow comes after the storm. I believe that when talking about the secrets of Zhang Tianyu, Chairman of Guanghetong, about his business success, maybe a book is hard to carry, because behind every successful person, there may be countless unknown stories.
However, from this brief, less than one-hour exchange with Zhang Tianyu, the author noticed that Zhang Tianyu has relatively understated the difficulties experienced by the company or personal experience in the past, such as the difficulty of starting a business, the pain of transformation, and the share of an overseas market. How did more than half of the companies with chips as their main raw material achieve a significant increase in net profit against the trend under the impact of the new crown epidemic, and so on.
In his dictionary, the author heard the most words, the first is "believe", the second is "race track".
"I believe that our car networking sector will be able to show better development", "I believe that as long as we insist on independent development and increase investment in research and development, I believe that our products should go farther and better, and do better", " I believe that through our channel layout and overseas layout, the coverage of the company’s products will become wider and wider in the future.”...
Regarding the track, the first sentence we met was Zhang Tianyu, "The company has developed very well in the past few years, mainly because the track is good." At the end of this dialogue, Zhang Tianyu also casually mentioned "The company's track is very good, and the Internet of Everything era has just begun."
On the surface, what we hear are two ordinary words, "track" and "believe", but in fact, there may be Zhang Tianyu's character, management, and philosophy behind it.
The track, in other words, is the time of the day, that is, the development of the enterprise must advance with the times and follow the trend. "The good wind can send me to the sky with its strength", which is similar to Lei Jun's famous saying "Standing on the wind, pigs can fly". Wonderful.
"Believe" represents an optimistic, upward, positive response to changes, and the belief that things are man-made. This is very important for entrepreneurs, because any company must experience too many changes in the world, technology, and industry to become a century-old store. If an enterprise shrinks its head when it encounters changes, stands still, waits for nothing, and does not actively transform, then such an enterprise can easily be eliminated by the times.
Looking back at Fibocom’s growth history, the company has always been a force to make progress, from bidding farewell to the "comfortable life" of the agency in 2008, refusing to be acquired, transforming to independent research and development and promoting its own brand, to breaking through the bottleneck of talent, capital and technology step by step. , To become the industry technology leader, to advance the deployment of the Internet of Things field, as well as the current continuous increase in the Internet of Vehicles layout, are the performance of the company's active response to changes and taking advantage of the trend.
It is said that the last laugh is often not the person or company with the strongest ability, but those who can actively respond to changes.
Judging from the industry changes brought about by the development of new media in recent years, when a large number of traditional media closed their doors, companies such as Douyin and Pinduoduo, which have captured user habits and video dividends, have risen against the trend.
No matter how the technology iterates, it is always important to be happy to see the future.
Reprinted from e company official micro