Recently, Youfang Technology’s first launch meeting on the Science and Technology Innovation Board was only one step away from the official launch of the market. The number of members listed by domestic cellular module manufacturers has added one more. Telecommunications and Shanghai Quectel have all been listed, and GosuncnWelink, SIMCom, Longshang and other companies have also landed ashore through mergers and acquisitions by listed companies.
In the entire honeycomb module circle, there is a thriving scene.
Behind the prosperity scene is the support of performance
Domestic companies have relatively strict requirements on the size and profit of newly listed companies. Therefore, successful listing in the country means that the company’s performance has been recognized.
In fact, in recent years, mainstream domestic module companies have maintained a rapid development speed. For example, Youfang Technology. According to the data disclosed in its prospectus, the company’s 2016 performance was 328 million, and its 2017 performance It was 499 million, and its 2018 performance was 557 million. From January to June 2019, the company’s operating income was 341,295,700 yuan, a year-on-year increase of 55.89%. Even so, Youfang’s growth rate in the industry is considered relatively “moderate”.
Quectel, which went public in the early months of this year, can describe its performance as “opening”. Its 2016 performance was 573 million, its 2017 performance soared to 1.66 billion, and its 2017 performance also reached 2.7 billion. From January to June 2019, the company’s performance also exceeded 1.7 billion.
In addition, the development speed of mainstream module manufacturers such as MAG Intelligent and Guanghetong also performed well. Fibocom’s performance growth rate in 2017 and 2018 reached 63.58% and 121.75%, respectively. The 4G industry performance growth rate of Meige Intelligence in 2017 and 2018 also reached 62.92. %, 232.07%.
Behind the rapid performance of cellular module manufacturers is the result of the strong demand for the Internet of Things. Because communication transmission is an indispensable link in IoT devices, and compared with SOC solutions, communication modules have higher flexibility and can facilitate rapid product development and iteration, and are widely used by terminals. Welcome from equipment manufacturers. Therefore, logically speaking, the soaring performance of module manufacturers means that the application deployment of IoT devices is increasing rapidly.
Trend analysis of module companies
Although the module manufacturers are currently in the same glory, they are also facing the risk of serious homogeneity and fierce price competition leading to a decline in gross profit. In addition, analyzing the financial reports of all listed module manufacturers, it can be found that upstream chip purchases account for the majority of module manufacturers’ purchases. Therefore, it is self-evident that module manufacturers are affected by chip manufacturers. Therefore, in the face of these potential risks, module manufacturers are also racking their brains to improve this situation.
First of all, maintaining the research and development of new products is the way of survival that all companies attach great importance to. For traditional cellular module products, given that the competition in the entire industry is relatively sufficient, and the industrial chain is also very complete and mature, the speed at which new products are launched becomes extremely important. For example, the current hot 5G module products, as well as the NB-IoT products a few years ago, module manufacturers have launched related new products in the first time, hoping to take the lead in the market.
Secondly, it is the differentiated competition of products. On the one hand, module manufacturers are not reconciled to only play the role of chip manufacturer OEM. On the other hand, they also hope to have performance differences with other module manufacturers’ products. This requires module manufacturers to extend their capabilities. In other technical fields, for example, AI capabilities, GPS/Beidou and other satellite positioning capabilities are implanted into communication modules. This is a gameplay of current module manufacturers, and another gameplay is based on their own module products. Sink and make some terminal hardware, such as OBD and other vehicle-mounted terminals, handheld devices, and other smart hardware products. At present, this gameplay has received good feedback.
Finally, another aspect of competition is to start from the application level. In the TO-B market of the Internet of Things, each industry has its own industry barriers, and major module manufacturers generally choose to dig in a few areas and maintain themselves. Based on this unique advantage, we will go to expand the application market more.
In addition, going overseas is also a market means to face competition, because the gross profit in overseas markets is relatively high, and domestic products have obvious cost-effective advantages, and it is easy to obtain competitive advantages. At present, major module manufacturers are paying more and more attention to overseas markets.
Write at the end
The market potential of the Internet of Things has begun to highlight. As early as a few years ago, some analysts believed that module companies would be the first to benefit from the Internet of Things industry, because this industry has a high degree of concentration and high standardization. A component required for networked equipment. Judging from the development of the past few years, it can indeed be seen that the performance of module companies such as Quectel, MAG Intelligent, and Youfang Technology Guanghetong are all just as open, with rapid growth, and the performance and market recognition. Knowledge is also rapidly increasing.
Of course, the proportion of modules in the entire Internet of Things industry is still very small. The value of more hardware companies, solution companies, and data operation companies in the Internet of Things has just started. How many Internet of Things companies will be listed in the future? ? We will wait and see.