Wuhan van Valley: The parasitic ambitions of Huawei's shadow

Sina tip: This article belongs to the Research Report column, only for the analysis of a stock of personal views and views, and the unofficial news report, Sina does not guarantee its authenticity and objectivity, all relevant to the stock of effective information to the Shanghai and Shenzhen Stock Exchange of the announcement as prevail, please investors pay attention to risk. Investor (reporter Liu Xiuli) in the field of communications equipment manufacturing, Huawei is recognized as "the Boss", but because it has not been listed, it also makes a lot of love Huawei investors slightly regret.　　The Wuhan Fan (002194.SZ), which has been closely cooperating with Huawei, has become the "Huawei concept stock" in the capital market. Such names come from the close relationship between the two.　　Huawei's sales to Huawei in the last 3 years accounted for 65.23%, 79.21% and 70.65% of the total revenue, which has always remained the company's first major customer. And the founder of Wuhan Van Valley--51-Year-old Mengqingnan and the 58-Year-old Wang Lili couple, although no Huawei President Ren Elder (65 years old), but two companies to start the time is similar.　　When the 1988 was not from the army after the start of his career in Shenzhen, Monteggia couples in Wuhan, a 100-square meters of the house, began their entrepreneurial road.　　20 years later, Wuhan fan-gu became China Mobile communication antenna system RF Technology device Giants, ranked fourth in the world, Huawei has become China's largest mobile communications equipment manufacturers.　　Huawei's "concept" was announced in January this year by TeliaSonera, the largest telecoms operator in the Nordic and Baltic region, to deploy the world's first LTE commercial network in the Norwegian capital, Oslo. In this regard, Wuhan Van Valley insiders on the "investor" said that the business, is still in the research and development stage. But the development of Huawei in this field, it is clear that the next step for Wuhan Valley to lay the foundation as a 3G upstream product manufacturers, seize the "big customer" is the rule of Wuhan every Valley survival.　　The company's users are large mobile device manufacturers, including Huawei, ZTE and Nokia, Ericsson, Motorola and other companies, of which Huawei has been the company's largest user, while the top five customers accounted for 97% of the company's products.　　On the one hand, with Huawei, to share Huawei's high-speed growth results, on the other hand, actively into Ericsson, Nokia and other international giant RF device procurement sequence. According to the public information, Huawei's 2008-year order sales reached 23.3 billion U.S. dollars, an increase of 45.63%.　　For Wuhan where the valley, Huawei is like a tree is still not see the marginal "tree", it can be said that Huawei to take a step forward, Wuhan, where the valley needs to take two or three steps forward.　　In addition, the huge investment from the 3G industry will certainly benefit the communication equipment manufacturers, especially among these equipment manufacturers, RF device manufacturers benefited from the front. According to the Han Ding century forecast, the global Mobile communication RF Device Market from 2007 to 2010 can maintain more than 15% annual composite growth rate, 2010 market size up to 17.5.9 billion USD.　　Global mobile communication antenna RF devices are the main suppliers of Powerwave, Andrew (U.S. Andrew), RFS (Anfersch) and other international companies, accounting for more than 80% of the industry market share, but in recent years the domestic market share of RF device manufacturers increased rapidly.　　As a A-share communication RF device leader, Wuhan Van Valley has a world-class manufacturers comparable to the strength, ranked fourth in the world. At present, international RF production has a tendency to shift to China. In addition, the company compared to domestic competitors have a clear technical and scale advantages. For a long time, the company can maintain a stable gross profit margin, basically up to 30%.　　The industry's first two major manufacturers Powerwave and Andrew's average gross profit margin is only 20%.　　In China, Wuhan Van Valley's competitors are mainly Shenzhen's rich technology and Chinese communications, one of the big rich technology is kathrein in the domestic joint venture, in 2005 to become a qualified supplier of Huawei; Chinese communication is currently focused on the carrier market wireless coverage products, in the RF devices and Wuhan Fan Valley competition is not large. Wuhan fan Gu Dong Wangqing introduced, the original Motorola, Siemens, Huawei three companies orders accounted for the company's total revenue of 97%.　　With the world's telecommunications equipment market competition, Huawei has become the company's largest customer. The highest share of the 68% Wuhan Van Valley's main products are base stations with RF subsystem, duplex and filter. The duplex device is mainly used in GSM network, RF subsystem and filter are mainly used in 3G equipment.　　Therefore, it can be expected that this year, the RF subsystem and filter sales will continue to grow rapidly, especially in Wcdma, Wuhan Van Valley's technical preparation is adequate, last year has been achieved to the Nokia Siemens bulk supply.　　In addition, due to the three major operators of Chinese mobile, China Unicom, Telecom launched in the second half of last year, so for the Wuhan Fan and other telecommunications equipment manufacturers, performance will be reflected in the 2009 earnings. May 4, Mobile launched TD three business tender singing, Huawei ranked second, occupy China Mobile This tender share of 20%.　　According to the results of the WCDMA bidding released by China Unicom in February, the main customers of Wuhan Van Valley, Huawei, Nokia, Siemens and Ericsson, have gained a total of 68.37% market share, providing 52,831 base stations. Thanks to last year's centralized release of orders and operator follow-up investment, Wuhan Van Valley's first quarter of this year's results significantly improved.　　In the first quarter, income and net profit were 386 million yuan and 71 million yuan, which grew 43.1% and 53.5%. In addition, cost pressures have slowed with the collapse in metal prices last year. According to the Wuhan Fan Gu Insider, in the company's products, raw materials accounted for 70% of the total cost, and metal materials accounted for the total cost of about 30%, of which aluminum and silver cost accounted for relatively high.　　At present, the price of aluminum and silver has dropped by about half from the high. UnderCalculates, the metal price drops half, may cause Wuhan every valley the product cost to drop about 10%. Now, Wuhan Every valley is using its own growth rate, breaking the bottleneck of development. At the beginning of the IPO, market participants generally agreed that a 20% share of the global market would be the ceiling for the company's development.　　But as communications equipment manufacturing accelerates to China, the company's strong competitive edge is trying to break previous predictions.　　Now, with 1.157 billion yuan in cash, Wuhan Every valley is the goal is through market competition, industry mergers and acquisitions and other means, will increase the international market share to more than 30%, the growth of the world's industry first enterprises. Rare industry development opportunities, in Wuhan where the valley into high-speed growth at the same time, the market also reminded that the company's customer concentration is too high, Huawei one on account of the company's business volume of 70%, if Huawei changes in the RF device procurement methods or sources, will bring the risk of revenue loss. So the company needs to expand the customer source and product line, to avoid the customer too concentrated risk.