Common prosperity is not rich! Lens Technology predicts that net profit will drop by 50%

Lansi Technology, a major Chinese mobile phone glass manufacturer, recently announced its 2021 performance forecast. It is expected that the net profit attributable to shareholders of listed companies in 2021 will be 2.007 billion to 2.399 billion yuan, a decrease of 59%-51% compared with the same period in 2020. The reasons include power cuts, shortage of materials, research and development of new products, and response to the “common prosperity” advocated by the Chinese government.

In response to the earnings recession in 2021, Lens Technology listed seven reasons in its earnings forecast. The first is that power cuts have a certain impact on the production delivery and operation scheduling of orders. For example, some factories in Hunan, Taizhou, and Dongguan were forced to temporarily suspend production due to power cuts. The established production and delivery rhythms were disrupted, and employees were lost, resulting in yield fluctuations and rising costs. Production and delivery could not be completed in a timely manner according to the original plan. Task.

The second is to actively respond to the national “Common Prosperity” initiative. Since September last year, the salary standards of grass-roots employees have increased, and labor costs have increased; in addition, power cuts and production shutdowns have increased employee mobility, and company management costs and labor costs have increased additionally .

Third, after the acquisition of the Kecheng Taizhou factory, it was originally regarded as an important key to breaking into the Apple supply chain. However, Lens Technology said that with the completion of the asset delivery of the Taizhou Park, the strength of its metal business has been greatly enhanced; however, due to the low proportion of direct recruitment in the workforce structure of the Taizhou Park, there are many R&D projects newly established by customers. Labor costs and R&D expenses have risen, affecting profitability.

The fourth point is that due to the new two new parks, Huanghua and Xiangtan, which have been put into operation, the new factory, new production line, new team, etc. need to be run in for a period of time, the initial operating cost is relatively high, and the product structure is mainly based on new products, research and development. The investment is relatively high, the cost of recruiting staff and labor costs increase, so there is no benefit in the short term.

Fifth, Lens Technology pointed out that due to the strong demand for research and development of new fields, new technologies and new products from downstream customers, such as watches, VR, AR, new automotive glass, and smartphone middle frames and other metal alloy products related The significant increase in R&D projects and R&D expenditures will have a certain impact on the short-term business performance.

The sixth point is that the new crown epidemic and the global dual carbon policy have led to a shortage of raw material supply for industrial products and a sharp rise in prices, which has increased procurement costs and has a negative impact on profitability. At the same time, the new crown epidemic has led to the gradual intensification of the contradiction between supply and demand of chips and semiconductors, which has caused some customers to ship less than expected.

The last point of impact is that due to the resurgence of the new crown epidemic, the overseas business typical of Vietnam parks will continue to be affected in the second half of the year. Factors such as logistics obstruction and supply chain epidemic prevention and control have affected the production and delivery of orders.

However, Lens Technology emphasized that despite new difficulties and challenges such as repeated epidemics, limited power consumption, and supply chain shortages last year, the company took effective measures in a timely manner to keep production and operation generally stable; Business, smart terminal complete machine assembly business, and photovoltaic new energy business and other medium and long-term development strategies have continued to make progress.

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