At the beginning of this month, Beidou Star issued the "Announcement on the Reply to the Inquiry Letter on the Restructuring of the Shenzhen Stock Exchange" in response to the company's wholly-owned subsidiary's proposed sale of 15% of the equity of its subsidiary Beidou Star Telecom Technology Co., Ltd. (hereinafter referred to as Beidou Telecom). for further interpretation.
According to the previous plan, 15% of the equity was priced at 252.9 million yuan. After the completion of the transaction, the company's indirect equity stake in Beidou Zhilian was reduced from 33.21% to 18.21% and will no longer be included in the company's consolidated statements.
Data shows that in 2021, 2022 and January-May 2023, Beidou Zhilian’s main business (vehicle smart cockpit) revenue was 1,386,630,600 yuan, 1,944,180,600 yuan and 1,014,783,100 yuan respectively. The main customers are Changan, Geely, BAIC, SAIC-GM-Wuling, Chery, etc.
At the same time, during the above-mentioned reporting period, Beidou Zhilian's comprehensive gross profit margin continued to decline. The main reason was that the changes in the automobile market in the first half of 2023 caused fierce competition. Automakers implemented a price-for-market share strategy in the consumer market and carried out price reduction adjustments for complete vehicle products.
At the same time, Beidou Zhilian’s customers (car companies) passed this price reduction upward (supply chain), resulting in a decrease in the relative sales price of smart cockpit products. In addition, smart cockpits are in a rapid centralized upgrade cycle of electronic architecture, and the company still needs to continue to increase investment in technology research and development to ensure product competitiveness.
Beidou Zhilian said that it is currently actively optimizing the product structure, expanding the product lines of existing customers, seeking more orders from high-quality customers, and increasing the revenue share of mid-to-high-end products (such as cockpit domain controllers).
Regarding the sale of assets, Beidou Starcom said that although the industry to which Beidou Telecom belongs has good development prospects, it also faces factors such as large capital investment, fierce industry competition, and customers' strong price reductions on suppliers.
According to the latest released data, from January to September this year, Beidou Zhilian’s operating income was 1.983 billion yuan, and its net profit was a loss of 96.2161 million yuan. In 2022, the company will achieve operating income of 1.820 billion yuan and a net profit of 65.7589 million yuan.
According to the Gaogong Intelligent Automobile Research Institute, this asset sale comes at a time when the smart automobile track has entered a critical transformation and upgrading cycle. Taking the cockpit as an example, the traditional low-value entertainment host market has entered the saturation stage, while the cockpit domain control market has entered the stage of settling down.
Data shows that from January to June 2023, 8.5613 million passenger cars with front-mounted standard central control entertainment systems were delivered to the Chinese market (excluding import and export), and the penetration rate of front-mounted standard equipment has exceeded 90%, reaching 92.13%. Among them, the proportion of hosts supporting the Internet of Vehicles function has exceeded 80%, reaching 83.03%.
In the high-end market, 1.1767 million cockpit domain controllers were delivered as standard, a year-on-year increase of 67.98% (the pre-installed installation rate exceeded 10%, reaching 12.66%), becoming the main incremental market in the next few years; at the same time, cabin parking integration , cabin-driving integration and other forms have begun to take shape.
At the same time, the competition for cockpit domain controllers has gradually extended from early pure hardware design (including OS, BSP, middleware and other low-level software development) to chips (self-developed), multi-modal human-computer interaction, and upper-layer integration functions Develop and develop more high-value businesses in a new cycle.
The Gaogong Intelligent Automotive Research Institute predicts that this year will continue to be a year in which cockpit domain controllers are accelerated and installed on more than 3 million vehicles throughout the year; among them, the Qualcomm platform is the main force driving the increase of cockpit domain controllers in this round. military.
Currently, Desay SV, Bosch (Connected Cars), and Visteon account for half of the Qualcomm platform cockpit domain controllers. Beidou Zhilian, which started late, did not enter the top ten.
In the domain controller track, some manufacturers are competing for the market dividend window of next-generation high-performance SoCs such as Qualcomm 8295. For example, while PATEO is delivering the 8155 platform on a large scale, the 8295 smart cockpit platform provided to a new car manufacturer is expected to be mass-produced in 2024.
Data shows that in the first half of this year, the gross profit margin of Beidou Zhilian's automotive business was only 6.54%, a year-on-year decline of 4.16 percentage points; in comparison, the smart cockpit of Desay SV, the industry leader The gross profit margin of the business reached 19.62%.
Public information shows that Desay SV’s third-generation smart cockpit domain controller is currently in mass production on the models of Li Auto, Chery and many other customers. The fourth-generation smart cockpit domain controller has received multiple project orders. More differentiated cockpit domain control solutions and other new products are also being launched.
Previously, Beidou Star has publicly stated that the main reasons for the company's automotive business's continued losses are: first, insufficient scale, and second, low gross profit.
The Gaogong Intelligent Automotive Research Institute believes that as smart cockpits enter a new round of change cycle, with trends such as the large-scale introduction of domain controllers into vehicles, further integration of vehicle electronic architecture, and cabin-driving integration, the R&D investment of relevant companies still needs to be maintained. higher level.
In this regard, Beidou Star publicly stated that with the increase in revenue scale, Beidou Zhilian's demand for capital investment is also increasing. In the current environment of increasingly fierce automotive competition, market-oriented financing channels are needed to support the company's further development.
According to the plan, after the completion of this asset transaction, the new controlling shareholder of Beidou Zhilian will be changed to Huarui Zhilian. The latter has continuously invested in upstream and downstream companies in industries such as Horizon and Black Sesame in recent years, which will help Beidou Zhilian establish a good industry ecological environment;
On the other hand, Huarui Zhilian has always been the second largest shareholder of Beidou Zhilian, and is familiar with the historical situation of Beidou Zhilian, which is conducive to achieving a smooth transition of company management and operations. In addition, Huarui Zhilian itself has strong financial resources and the ability to continue to support The capital requirements for Beidou Zhilian investment.