Jemet: The king of mobile phone cases, finally avalanche

Success is also Huawei, and failure is also Huawei. From 2017 to 2019, Huawei, the largest customer, brought a large number of orders and revenue to Jemet, and sent it to the IPO, becoming the first stock of mobile phone cases. But at the beginning of 2020, due to the sharp drop in Huawei's orders, this changed Jemet's performance.

 n order to save performance, Jemet began to vigorously develop its own brand business, and the iPhone 14 mobile phone case it launched was extremely expensive. The gross margins of Jemet's private-label business exceed that of Apple's hardware products or even Apple.

The iPhone 14 has just been released, and mobile phone case manufacturers have already launched matching mobile phone cases.

Among them is Jemet, the first mobile phone case, whose iPhone 14 mobile phone case claims to be made of military materials, and the price is as high as nearly 600 yuan. The data shows that the gross profit margin of Jemet's own brand mobile phone case is as high as 60.93%, which is even higher than that of Apple.

However, in the first half of this year, Jemet's life was not easy, and its net profit plummeted 205.38% year on year. What happened to the once glamorous Jemet?

In the early stage of development, Jemet mainly sold a series of products such as Apple-branded mobile phone cases. Benefiting from the worldwide sales of Apple products, the company achieved good results in the early stage of development.

Later, with the rapid rise of Huawei and the strength of Samsung in overseas markets, Jemet gradually formed a product pattern based on the above three brand series, supplemented by some small brand series. Holding on to Huawei's thigh also made Jemet go public in 2020.

According to Jemet’s prospectus, Huawei has been its largest customer from 2017 to 2019. During the period, Jemet's sales revenue to Huawei was 127 million yuan, 265 million yuan, and 377 million yuan respectively, accounting for 23.47%, 40.99%, and 45.47% of operating income respectively.

Huawei's orders have made Jemet live a very nourishing life. From 2017 to 2019, Jemet’s revenue was 540 million yuan, 647 million yuan, and 829 million yuan respectively; net profit also rose year after year, 39.83 million yuan, 61.29 million yuan, and 130 million yuan respectively.

However, due to the sharp decline in Huawei's mobile phone shipments in 2020, also greatly affected Jemet's performance.

In 2020, Jemet's revenue achieved a slight year-on-year increase of 3.06%, but the net profit attributable to shareholders of listed companies decreased by 18.90% year-on-year; in 2021, Jemet's revenue decreased by 16.35% year-on-year, and the net profit attributable to shareholders of listed companies Profits fell by 75.16% year-on-year.

During this period, Jemet no longer explicitly disclosed the specific names of the top five sales customers. In 2020, the sales contributed by its largest customer will be 265 million yuan, accounting for 31% of the total annual sales; in 2021, the sales of the largest customer will be 103 million yuan, accounting for 14.37%. From the data point of view, its largest customer should still be Huawei.

It is worth noting that under the sharp reduction of Huawei's orders, Jemet did not seize new opportunities.

In May of this year, Shuyuan Technology launched a 5G mobile phone case specially designed for Huawei mobile phones, which can enable Huawei 4G mobile phones to support 5G functions. Subsequently, the company's stock price rose sharply, which also upset Jemet's shareholders.

On the investor interaction platform, some investors said that they saw Shuyuan Technology cut into the smartphone case, which changed the competition pattern and increased gross profit. As the company's professional mobile phone case, Huawei is also the largest customer. Did you hurry to keep up? Jemet replied: The company has also noticed that Shuyuan Technology has developed and produced 5G communication shells . The company will continue to pay close attention to industry trends, actively seize new market opportunities, develop business areas, and strive to improve the company's operating performance.

However, at present, Jemet has not received an order for Huawei's 5G mobile phone case.

In the early days, Jemet focused on ODM / OEM business, and produced mobile phone cases and other products for mobile phone manufacturers such as Huawei and overseas accessories brands such as Targus. Later, Jemet also began to launch its own brand business .

At present, the foundry business is still the main support of Jemet. According to Jemet's report for the first half of 2022, its ODM/OEM business revenue was 270 million yuan, a year-on-year increase of 50.46%, accounting for 75.11% of total revenue. However, the foundry business earns hard-earned money, and the gross profit margin is extremely low. The business's gross profit margin in the first half of the year was 9.55%, and it fell by 3.62% year on year.

In this context, the private label business has become the focus of Jemet's bets. At the 2021 annual performance meeting in May this year, in the face of the decline in performance, Chen Jianping, chairman of Jemet, said that he was full of confidence in the company's future development, and said that the company's own brand business has a relatively high gross profit margin and its own brand business. Construction has a certain cycle, and the company is full of confidence in the development of its own brand.

Compared with the foundry business, Jemet's own brand business does have a very high gross profit margin.

Its own brands include Juise and xdoria (Dao Rui). Sina Technology saw in the xdoria Tmall flagship store that its mobile phone case for the just-released iPhone 14 series is priced as high as 598 yuan. The product claims to be only 0.01% of the people's grade, using the military material aramid fiber used in nuclear-powered aircraft carriers, guided missile destroyers, etc.; another Huawei Mate 50 Pro mobile phone case is also priced at 568 yuan.

According to Jemet's report for the first half of 2022, the gross profit margin of its own brand business is as high as 60.93%, and it has increased by 3.36% year-on-year. In contrast, according to Apple's financial report for the third fiscal quarter (second quarter) of fiscal 2022, its overall gross profit margin was 43.3%, and the gross profit margin of hardware products was 34.5%. That is to say, the Apple mobile phone case sold by Jayme has a higher gross profit margin than Apple.

However, Jemet's two-wheel drive strategy of foundry and private brands is also facing an embarrassment, that is, the revenue of the foundry business with low gross profit margin is increasing, while the private brand business with high gross profit margin is shrinking. In the first half of this year, Jemet's own brand business achieved revenue of 89.5199 million yuan, a year-on-year decrease of 25.90%.

Under the sluggish mobile phone market demand, consumers with tighter budgets may also reduce their consumption of high-priced mobile phone cases.

With the decline in revenue contributed by Huawei and the limited scale of its own-brand business, Jemet experienced a difficult time again in the first half of this year after its performance declined in 2021.

Its recently released semi-annual report shows that Jemet achieved operating income of 360 million yuan, a year-on-year increase of 19.75%; net loss attributable to shareholders of listed companies was 16.382 million yuan, a year-on-year decrease of 205.38%; deductions attributable to shareholders of listed companies are non-recurring. The net loss of profit and loss was 36.928 million yuan, a year-on-year decrease of 369.25.66%.

For the net profit avalanche, Jemet gave three main factors. First, changes in product shipments in downstream industries and changes in downstream industry patterns. During the reporting period, the global smartphone market shipments and tablet PC market shipments both declined year-on-year, which in turn affected the market demand for protective accessories; at the same time, due to multiple environmental impacts, the competition pattern in the mobile smart terminal product industry occurred Changes, the business of some of the company's important customers has been affected.

Some of the important customers mentioned by Jemet are undoubtedly Huawei.

The second is the strategic investment in fundraising projects. With the increased strategic investment in the "R&D center construction project" and the "brand building and marketing network upgrade project" raised at the time of listing, the company's R&D expenses, sales expenses, and management expenses have increased significantly, which has a negative impact on the performance of the reporting period. have a certain impact.

Judging from the 2022 semi-annual report, Jemet's selling expenses and administrative expenses did increase by 50.14% and 31.06% year-on-year, respectively, but R&D expenses dropped by 15.48% year-on-year, which is not consistent with Jemet's description. meets the.

Third, exchange rate fluctuations have an impact on business performance. In the first half of this year, Jemet's export business achieved an operating income of 179 million yuan, accounting for 49.64% of the operating income. The company's exports were mainly settled in US dollars. The fluctuation of the RMB exchange rate had an impact on the company's operating performance.

Under the avalanche of performance, the share price of Jemet, the first share of mobile phone cases, is also avalanche.

When it landed on the Shenzhen Stock Exchange in August 2020, Jemet's issue price was 41.26 yuan per share, and its share price hit a high of 95.60 yuan shortly after its listing. As of the close on September 14, Jemet's share price was only 17.52 yuan, and the market value was 2.243 billion yuan, which has shrunk by more than 80% from the highest.

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