Global smartphone market demand is weak, fingerprint chip leader Huidian Technology (603160.SH) performance fell off a cliff.

 

 

 

On August 30, Huideng Technology released its 2022 semi-annual results report. The report shows that the company achieved revenue of 1.829 billion yuan, down 37.15% year-on-year, and net profit of 21.09 million, down 94.99%.

 

 

The report explained that the main reason for the precipitous decline in net profit was the company's product dependence on the smartphone market, which led to a significant drop in market demand. In addition, the repeated impact of the epidemic caused supply chain costs to increase. The decrease in demand and increase in costs led to a significant decline in revenue for Huitian Technology.

 

 

In terms of products, revenue from fingerprint chips accounted for 44.85%, a decrease of 22.44 percentage points from the same period last year, nearly a cut. In addition to the decline in revenue, Huiteng was crushed by nearly 1.5 billion yuan of inventory waiting to be digested.

 

 

 

 

Information shows that Huideng Technology, founded in 2002 and listed on the SSE in October 2016, is a leading provider of chip design and solutions to drive the smart connection of everything, mainly for intelligent terminals, the Internet of Things and automotive electronics to provide leading semiconductor software and hardware solutions.

 

 

At present, the main customers of Huidian Technology are Samsung, Google, Amazon, Dell, OPPO, Vivo, Xiaomi, as well as Buick, Hyundai, Nissan and other brands.

 

 

In the list of "Top 10 smartwatch main control chips shipped in March 2022" released by TidePower Intelligence, Huideng ranked eighth with 460,000 chips shipped.

 

 

In the past decade, Huitian Technology has repeatedly seized the industry, from capacitive touch button chips, capacitive screen touch chips to fingerprint chips, all bringing good revenue to Huitian. Now, the decline in the cell phone market, product competition has intensified, all make Huideng Technology snow.

 

 

According to Tide Electric Intelligence statistics, the global cell phone market declined 18% in the first half of 2022, of which, cell phone shipments in the Chinese market reached 156 million units, down 23% year-on-year.

 

 

Fingerprint chip revenue nearly cut

 

 

Since 2022, the smartphone industry has been experiencing a cold spell. Previously tide electricity think tank predicted that in 2022 the global smartphone shipments do not exceed 1 billion, or perhaps even only 900 million, which is still relatively consistent.

 

 

The whole body is affected by a hair, the smartphone industry went downhill, relying on smartphone chip companies are not immune. According to the financial report, Huitian Technology's traditional fingerprint chip revenue accounted for 44.85%, a decrease of 22.44 percentage points over the same period last year.
 

 

 

 

 

Fingerprint chip design is the core link of the upstream of the under-screen fingerprint identification industry chain, which improves the accuracy and speed of identification through reasonable algorithms and structures. As early as 2014, Huideng Technology, the earliest transformed fingerprint chip, enjoyed the industry dividend. However, with a number of chip manufacturers entering the fingerprint chip market, a certain impact on Huideng Technology.

 

 

Public data show that the first quarter of 2022 global semiconductor sales of $ 151.7 billion, up 23% year-on-year; the second quarter of global semiconductor sales of $ 152.5 billion, up 13.3%.

 

 

Global semiconductor sales in the first and second quarters are still on a growth trend, which shows that Huitian Technology did not outperform the market in the first half of the year.
 

 

1.5 billion inventory to be digested

 

 

Market environment is severe, companies actively seek a way out. Huitian Technology said that it will layout multiple product lines, mainly around the "sensing, computing, connectivity, security" four core technology areas to actively layout and expand.

 

 

Huitian Technology said in the investor exchange meeting, the company is still focused on long-term development, adhere to the investment in new technologies and new product development, and constantly launch new products, to the Internet of Things and automotive field continue to make efforts. This series of initiatives, is undoubtedly Huidian technology in self-help. However, it is clear that Huitian Technology in the layout of multiple product lines too hard, there has not been a breakthrough.

 

 

It is worth noting that the inventory of Huitian Technology is about 1.5 billion yuan, accounting for 14.71% of total assets. Market demand decline, the product can not be sold is an important reason for the company's capital shortage.

 

 

The financial report shows that Huitian Technology's R&D expenses were 705 million yuan, down 21.6% year-on-year. For chip design companies, the decline in R & D expenses will lead to a lack of motivation for product development, which in turn affects the launch of new products.

 

 

In terms of stock price, Huitian Technology opened its shares at 108.14 yuan on January 7, 2022, and as of September 16, the stock price was 51 yuan, with a total market value of 23.36 billion yuan. Share price cut, from the peak of the fall from the altar, Huitian Technology's situation is not optimistic.

 

 

The current situation of the consumer electronics industry is gradually severe, Huitian Technology layout under pressure, as far as the results are very little, but whether the second half of the year can save the day remains to be seen.

 

 

Translated with www.DeepL.com/Translator (free version)