Great to be � 50 million purchase of development in Finland EMS foundry giant

China EMS (Enhanced Short Message Service) E-foundry foundry industry might again arise a giant, comparable to the size of their income Foxconn and BYD. Yesterday, the Great Wall Material Co., Ltd. (hereinafter referred to as the "Great Wall Development) announced the company on July 21 with the Finnish listed company Elcoteq SE (Elcoteq Group) signed an agreement intended to invest 50 million euros, under certain conditions, to subscribe for its the proportion of newly issued shares of not less than 30%, yet the specific issue price after the debt restructuring negotiations Elcoteq decided.
"Elcoteq is the world's sixth-largest EMS foundry giant, if the completion of the acquisition, development will be the Great Wall, the single largest shareholder of Elcoteq. Kaifa secretaries Ge Weiqiang CBN, told reporters yesterday, the Great Wall development has been established at the end of 2015 into the forefront of the EMS industry's strategic objectives, and if the acquisition is successful, will be completed ahead of the company's strategic objectives.
Loss of the foundry giants
"Great Wall of development itself is an EMS OEM business, the acquisition of Elcoteq's aim is to make himself more powerful the EMS industry chain. Ge Weiqiang car diagnostic tool suppliers said Elcoteq EMS chain owned by the Great Wall of development than the longer form of better business and has distribution in the global market.
The Great Wall of development in the 2008 annual report also said the company is implementing vertical integration, injection mold industry intends to extend forward and backward to provide logistics services. The acquisition Elcoteq, apparently in line with development plan developed by the Great Wall.
Elcoteq with original design manufacturing (ODM) capabilities for its customers' products throughout the product life cycle to provide product development, supply chain management, new product introduction, manufacturing and service solutions for the global point to point. Its customers, including mobile phones and its components, set-top boxes, flat panel TV electronic components, base stations, tower-top amplifiers and microwave systems.
And its global service network across Europe, obd ii code scanner the Americas and Asia Pacific, 15 countries, including the distribution in Russia, India, China, Mexico and Brazil and other manufacturing plants, product development unit and new product introduction center, currently employs about 15,000 people.
However, Elcoteq's operations from 2007 into a valley, loss of 106.5 million euros in 2007, 2008, loss of 64 million euros, the size of its revenue from 4.043 billion euros in 2007, shrinking to 3.443 billion euros in 2008. As of March 31, from Elcoteq's total assets of 1.163 billion euros in 2006 shrink to 7.47 billion euros and total liabilities of 657 million euros.
2008, Elcoteq started restructuring plan, the merger of manufacturing operations in Europe. In June this year, Ericsson also spent � 30 million acquisition of part of Elcoteq's manufacturing operations in Estonia, and has 1,200 employees transferred to Ericsson, Elcoteq original. Earlier, Ericsson, Elcoteq is also the supplier.
Acquisition risk
However, the behavior of the Elcoteq acquired the development of the Great Wall is also a very big test. Because the ongoing financial turmoil has affected the development of the Great Wall of overseas business.
Great Wall Development 2008 annual report, 2008, the Great Wall development income 13.947 billion yuan, and in 2007 an increase of 6.52%, net profit of 316 million yuan, down 55.38%. The first-quarter results, revenue in the first quarter of 1.974 billion yuan Kaifa, down 49.89%, net profit of 40.34 million yuan, down 42.84%.
What is more worrying is that the Great Wall of China, developing business income accounts for only 10.75% of total revenue, the Asia-Pacific region (excluding China) accounted for 39.61% of revenue, while North American revenue accounted for 48.72%.
"In fact, the second-quarter revenue and profit status has been restored Ford KM tool by OBD to the level of last year. Ge Weiqiang said.
"The acquisition of Elcoteq, will rapidly expand the scale of the Great Wall revenue development, allowed to advance into the top 10 EMS OEM Guotai Junan Securities analyst Weixing Yun pointed out that, in addition to harvest market, Elcoteq also has APC, Nokia, Ericsson and Huawei a large number of quality customers, "one of the risks should be primarily from fluctuations in future operating Elcoteq financial impact.
Great Wall currently developing the EMS business customers include Epson, Kingston, Samsung, ZTE, ResMed and so on. Among them, the Samsung phone orders last year reached 800 million units. From June, the Great Wall every day Development Samsung 4.3 million units shipped, while the Great Wall developed the capacity for Samsung to prepare for the scale of 200 million units per month.
2008 Foxconn International (02038.HK) income $ 9.371 billion, while shares of BYD (01211.HK) revenue of 26.788 billion yuan last year. Elcoteq in accordance with the Great Wall last year to develop and calculate the income scale, if the successful development of the acquisition of the Great Wall Elcoteq, its revenue will likely exceed the size of BYD.