Liquidmetal Technologies Inc (LQMT)

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Talk about Changying Precision
Confident
Confident
2019-11-22
1. Changying Precision's product layout
In the past two years, due to the overall breakdown of the mobile phone industry, metal stripes were gradually replaced by 3D glass, and profits declined. However, the company's product line has expanded very well.
Since 2017, the company has made many adjustments: in terms of product structure, it has shifted from mobile phone parts to non-mobile phone businesses, including laptops, smart wearables, e-books and smart speakers, etc., and the types of products involved A lot has been increased; in terms of customer layout, the company has shifted from focusing on domestic business to expanding overseas business, and placing international customers as the focus of future development. The adjustment of the overall situation is progressing smoothly. International customers account for more than 35% of revenue and will further increase in the future. At the same time, non-mobile phone projects have grown rapidly, accounting for more than 30%. The gradual mass production of many new projects for international customers will also be converted. Continue to rise.
The lifting camera is to solve the problem of full screen. Before the lifting structure came out, the full-screen mobile phones that everyone saw had a big or small "bangs", which was not very beautiful in appearance. The lifting structure solves this problem well. Considering the technological maturity and cost, the lifting structure is a very good solution to realize a truly full screen. This year's mainstream models of major brands have used the lifting structure. Last year, the company cooperated with customers to develop the lifting structure of NEX and Find X for the first time. This year's X27, Reno, Samsung A series, Redmi K20, realme and other scales fully use our products. The unit price of the lifting structure middle frame is higher than that of the ordinary metal middle frame.
At present, the company is cooperating with customers to develop and prepare for mass production of folding screen mobile phone hinge structure.
AR, wireless earphones, smart wearables, smart speakers, etc., companies in each sub-industry have made breakthroughs and have done very well.
Judging from the panel on November 18, regarding Huawei's folding screen, the most recognized manufacturers in the market are hinge-related, MIM, liquid metal materials, and hinge structural parts.
The layout of the folding screen industry chain of domestic A-share companies
On November 12, foreign investment and state-owned institutions went to the company to investigate. On November 13, many institutions and Shenzhen-Hong Kong Stock Connect made a big purchase.
The current dynamics are not cheap. The 5-year average profit is taken as the cycle and the current estimate is reasonable. Looking at the future, the current market value is still very cheap.
So, should investment look at the past, the present, or the future? Different people have different research depths and different methods and manifestations. Different people have different opinions.
On February 26, 2019, Changying Precision (300115) responded to investors’ questions on the interactive platform of Panorama Network on Tuesday, saying that the company is currently developing hinges for foldable mobile phones with multiple formats such as external and internal folding for customers. The company is preparing for mass production of components.
Tianfeng International Guo Mingchi, ?Apple may launch a dedicated MR device that supports AR and VR, providing a user experience of virtual and real integration (click and provide physical), and expects to build an O2O (online to offline) business model in the future; ?Changying Precision may be a supplier of mechanical components for Apple's headset. Yang Mingguang may be a supplier of optical components for Apple's headset.
On October 29, 2019, investors questioned: Does the company supply products for tws headsets?
Secretary Dong answered (Changying Precision SZ300115): Hello. The company is a component supplier of wearable products. The company’s wearable components include TWS headsets, stylus, smart watches, etc. Thank you.
2. Reasons for Changying Precision's daily limit on November 8
I thought it was a TWS headset at first, and the market thought so, and it also drove the TWS headset sector.
On November 13, 2019, Apple launched a new 16-inch MacBook Pro with a starting price of US$2399.
Everwin Precision has recently entered the Apple MacBook case supplier, referring to Guo Mingchi Tianfeng International’s "[Apple Research] The bottom of the case industry has passed, 4Q19–4Q20 growth visibility is good for 4Q19 investment focus."
It is worth mentioning that Changying Precision's revenue and profit are expected to increase significantly in 2020 due to the increase in the proportion of MacBook supply, and Kaisheng's profit is expected to grow due to improved operating efficiency.
Third, the future of Changying Precision
5G stocking is gradually started, driving the recovery of the metal parts market. Thanks to the increase in the number of antennas and changes in waterfall screen design, the ASP of 5G mobile phone metal middle frames will increase by more than 20%, which is conducive to the further recovery of the metal parts market.
Metal parts such as notebooks for overseas customers have increased significantly. In 2018, the company entered the customer's notebook computer metal case supply chain, becoming the customer's fifth metal case supplier and the first mainland company to enter the large-size case supply chain. Everwin is also a supplier of metal parts such as Samsung, Google, and Amazon.
Connectors, shields, etc. benefit from the 5G trend. Everwin is one of the main suppliers of Huawei and other Android brand connectors and shielding parts. Product lines such as C-type, RF cable, BTB connector, EMI/EMC, etc. are in the forefront of the industry, and extend to the VC heat dissipation channel.
Among the top ten shareholders is the Huaan Media Internet Hybrid Fund, which has been the best performing fund among public offering funds since October 2018. The key is that its capital is in the tens of billions.
Sega Technology, Goertek, Crystal Optoelectronics, Gongda Electroacoustic, Changying Precision, etc. The targets I have analyzed before overlap with Huaan Media Internet Hybrid Fund.
Fourth, about the hinge of Huawei's folding screen mobile phone
Huawei mobile phone launched a folding screen mobile phone, two seconds of light, the second-hand price was up to 90,000 yuan, up to 120,000 yuan.
From a market perspective, the main direction of hype is hinges and related materials.
MIM process, powder metallurgy, liquid metal are actually a new process of metal forming. The listed companies mainly include Jingyan Technology, Dongmu Stock, Yian Technology, etc. Jinsheng Intelligent and Dongmu shares participate in the same MIM company Dongguan Huajing, Dongmu shares 61%, and Jinsheng Intelligent 10%.
The MIM process is suitable for mass production of consumer electronic devices with complex shapes. In addition to producing structural parts with complex shapes, liquid metal can also provide devices with higher strength, higher elasticity, and higher hardness, which requires breakthroughs in cost control and technology.
I think the liquid metal of Yian Technology is useful for Huawei's folding screen. I don't know how many places it is used, and the value is not large.
Tianfeng International Guo Mingchi believes that Qihong is currently the most visible beneficiary of the hinge hinge of the folding machine. The reasons: (1) the exclusive supplier of the hinge hinge of Mate X, and (2) the potential supplier of Samsung Fold 2 (we expect at least If in the future potential brand customers (Oppo, Vivo, Xiaomi, etc.) who do not have a patent for the hinge design of the folding machine will also launch the folding machine, Changying Precision and Amphenol, which have design patents, have a higher chance of obtaining orders.
From the point of view of application, the hinge needs to always be smooth and without gaps on the side in contact with the screen, and form a plane when it is unfolded so that the flexible screen can cover it. The shaft must also provide a certain degree of damping and protection. The force is evenly applied during the opening and closing process of the folding screen, and the screen is protected from damage when subjected to external impact.
In short, the hinge shaft is like the "hinge" on the door of a home. The hinge design structure is complex, which puts forward higher requirements for the processing of precision parts. The answer can also be found in related patents of Huawei and Samsung. From the point of view, Huawei uses a geared hinge structure, and the hinge consists of hundreds of precision components.
Regarding the growth space of the hinge hinge business, a brokerage research report stated that due to the high entry barrier for the production of folding machine hinge hinges, it is believed that through the gradual increase in sales of folding screen mobile phones, the performance of hinge hinge suppliers is expected to be significant in the next few years Benefit from the high unit price and the rapid growth of the folding machine.
Hinge hinges are so important for folding screen mobile phones, so which companies in A-shares are involved in related businesses?
At present, the domestic companies that can mass produce hinge shafts include Corson Technology, Changying Precision; Metal Injection Molding (MIM) and liquid metal are also worthy of attention, Jingyan Technology assembles MIM manufacturing, and Yian Technology has a layout in liquid metal; for Huawei mobile phones Dongmu, which provides MIM structural parts, also has a related layout.
Yian Technology: R & D and production of liquid metal hinges at the same time
The company's announcement is that the global leader in the industrialization of liquid metals has the world's largest production line for the production of zirconium-based amorphous alloys. According to the announcement, the liquid metal FaceID bracket produced by the company has been supplied in batches to well-known internal mobile phone manufacturers such as Xiaomi, OPPO, and Huawei; the company’s 5G base station products include filters, heat sinks, etc., and are currently further cooperating with customers such as Guoren Communication. And it has established cooperative relations with Tesla, Samsung, Lens Technology, ABB and other customers.
It is worth mentioning that the company said in response to investors’ questions in September this year that the company has always had a good cooperation with Huawei, and the company is also developing and producing liquid metal chains.
Dongmu shares: cut into Huawei's mobile phone MIM structure industry chain through mergers and acquisitions
Related announcements show that the company is actively expanding into new business areas.
Specifically, in August, the company acquired Huajing Powder Co., Ltd., expanded metal injection molding (MIM) technology, and formed a good synergy with the company's integrated technology business; the target companies were mainly Huawei MIM structural parts, wearable device components, 5G routers, etc. Products, accounting for more than 65%, bring huge market space for the company to expand to customers such as Huawei. In the third quarter, Huawei’s allocation of mobile phones reached 41.5 million, with a market share of 42.4%, a continuous growth of 66%, and sustained rapid growth, which drove the company’s related business growth.
Changying Precision: preparing for the development and mass production of the hinge structure of the folding screen mobile phone
Everwin Precision, which was researched by 40 institutions in May of this year, is also known as one of the companies that "masters the core technical capabilities of hinges."
Judging from the findings, institutions generally pay attention to Changying Precision's folding screen components, new energy vehicle components, and mobile phone camera lifting structure components. Regarding the issue of folding screen components, Changying Precision responded that the company is cooperating with customers in the development and mass production of the hinge structure of the folding screen mobile phone.

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