On the evening of September 20th, Celestica (SH601127, stock price 75.55 yuan, market value 114.06 billion yuan) released a draft report on the major asset purchase.
The wholly-owned subsidiary, Celestica Automobile, intends to purchase 10% of the shares of Shenzhen Yinwang Intelligent Technology Co., Ltd. (hereinafter referred to as "Shenzhen Yinwang") held by Huawei Technologies by paying cash.
The transaction price for the target shares has been determined by the parties through negotiation at 11.5 billion yuan.
Celestica stated that through this transaction, it will further strengthen cooperation with Huawei, enhance the company's technological strength and market competitiveness.
The transaction still needs to be approved by the company's shareholders' meeting.
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Shenzhen Yinwang plans to substantially load according to the loading plan and principles determined by both parties before the payment of the transfer price in this transaction is completed.
After the loading is completed, Shenzhen Yinwang will take over the core business of Huawei's original intelligent vehicle solutions.
Shenzhen Yinwang mainly engages in intelligent vehicle solution business, focusing on the incremental components of the intelligent connected vehicle industry, helping the automotive industry to upgrade in terms of intelligence, connectivity, and electrification, and providing customers with products and solutions such as intelligent driving, intelligent cockpit, intelligent vehicle control, intelligent vehicle cloud, and intelligent in-vehicle lighting.
The draft disclosed by Celestica shows that Shenzhen Yinwang's team size, technical level, product maturity, commercial scale, and process system capabilities are leading in the industry, and it has the ability to independently develop and continuously innovate in full-stack core technologies.
At the same time, Shenzhen Yinwang is also one of the few companies in the world that has achieved scale revenue and profitability in the field of automotive intelligence solutions.
In this transaction, Celestica plans to purchase 10.00% of Shenzhen Yinwang's shares by paying cash, with a transaction price of 11.5 billion yuan.
The source of funds is self-raised funds, including but not limited to self-raised funds obtained from the operation of Celestica Automobile, equity financing methods such as shareholder capital increase, bank loans, or other methods.
Celestica stated that the company has actively and prudently promoted the work of raising funds, and the source of self-raised funds is sufficient, which can effectively ensure the payment of the transaction price and will not have a significant adverse impact on the financial status of the listed company.
During the reporting period, the net cash flow from operating activities of Celestica was -1.169 billion yuan, 6.398 billion yuan, and 16.36 billion yuan respectively.
During the reporting period, with the increase in the recovery of new energy vehicle sales by the listed company, the net cash flow from operating activities increased rapidly, and a stable and large-scale operating cash flow can be obtained through daily operations.
At the same time, the listed company has ample self-raised funds, which provides sufficient protection for the company's daily operations after this transaction.
"If the source of self-raised funds for this transaction ultimately includes debt financing such as bank loans, the net cash flow from operating activities of the listed company is sufficient to cover it, and it will not have a significant adverse impact on the solvency of the listed company."
Celestica stated that through this investment, the company will seize the opportunity of the iteration of intelligent driving technology, further strengthen the forward-looking layout of intelligent vehicle technology, comprehensively improve the company's advanced technology in automotive electrification and intelligent vehicle products, and achieve a dual lead in technology and products.
According to the Securities Times, Xu Zhijun, the rotating chairman of Huawei, said in a recent media interview that in April 2019, he first proposed that Huawei should be an "incremental component provider" for new energy vehicles, but there was still disagreement within Huawei at that time.
"At present, based on its profound accumulation in the field of information and communication technology, Huawei has gradually formed a consensus: focusing on 'three intelligences' - intelligent cockpit, intelligent driving, and intelligent vehicle control, from the earliest establishment of a vehicle networking laboratory, to the later intelligent vehicle solution BU, to the current establishment of Yinwang, Huawei has been working hard in this direction."
"At present, Yinwang has invested more than 40 billion yuan in R&D, and there are more than 4,000 intelligent driving software engineers.
In the most difficult period, we had a loss of more than 8 billion yuan a year.
However, after efforts, Huawei's vehicle BU can achieve profitability this year."
Xu Zhijun revealed.
Last month, Changan Automobile's AITO Technology and Celestica successively invested 11.5 billion yuan each to take a stake in Yinwang Company.
At present, the two car companies each hold 10% of the shares of Yinwang Company, and the remaining 80% of the shares are held by Huawei.
In the announcement of Celestica's plan to invest 11.5 billion yuan in Yinwang, the independent plan of Huawei's vehicle BU was first exposed.
According to the announcement at the time, as of the date of the announcement, Yinwang has not yet completed the business loading.
Huawei and Yinwang plan to complete the substantial loading according to the loading plan and principles determined by both parties before the payment of the transfer price in this transaction is completed.
After the loading is completed, Yinwang will take over the core business of Huawei's original intelligent vehicle solution.
According to the loading plan and principles, Huawei plans to load assets, personnel, intellectual property rights, etc.
to Yinwang.
As of July 31, 2024, Huawei plans to transfer patents and patent applications totaling 6,838 items, and the licensed patents include other patents required for the loading business; the technology to be transferred and licensed includes software, code, documents, and data related to the loading business; the trademarks and trademark applications to be transferred and licensed total 1,603 items, and the trademarks and trademark applications to be licensed total 1,600 items.
Based on the audited simulated statement of the loading business of Yinwang, from January to June 2024, Yinwang's operating income was 10.435 billion yuan, and the net profit was 2.231 billion yuan.
According to the Securities Times, in the latest interview, Xu Zhijun first publicly mentioned the specific timetable for the independence of Yinwang.
"At the end of this year, we hope to load all assets and personnel of Huawei's vehicle BU into Yinwang to achieve the independent operation of Yinwang.
When the second batch of investment partners will come in, there is no clear plan at present.
We hope that Yinwang will become an independent company with diversified equity.
In the short term, there will be no upper limit on the number of partners of Yinwang, and Yinwang will continue to open up equity to strategic partners."
Xu Zhijun said.
As for the situation after Yinwang's independence, Xu Zhijun said that after the independence of Huawei's vehicle BU as Yinwang, there will be no change in the business model.
Yinwang will operate independently and will also receive long-term support from Huawei.
The new company will continue to use the two core brands - Qian Kun Intelligent Driving and Hongmeng Cockpit, and together with partners, lead the second half of the automotive industry's intelligence.
According to the Securities Times, Xu Zhijun emphasized that after Yinwang opened up equity, the principle of "Huawei does not make cars" will be more firm.
"If Huawei makes cars, it can only be Huawei brand cars, at most like Huawei mobile phones, accounting for 10%-20% of the market share.
But after doing it, Yinwang can only serve itself, and it may have to build an automobile manufacturing plant.
For the Chinese automotive industry, it is equivalent to repeated construction.
We can participate in the development of the entire automotive industry in the identity of Yinwang, do the core part of the intelligent car, and move forward together with the Chinese automotive industry."
On the afternoon of August 29, Huawei announced its operating performance for the first half of 2024 on its official website.
The data shows that Huawei achieved a sales revenue of 417.5 billion yuan in the first half of this year, a year-on-year increase of 34.3%, and a net profit margin of 13.2%.
In the same period last year, Huawei achieved a sales revenue of 310.9 billion yuan, a year-on-year increase of 3.1%, and a net profit margin of 15.0%.
Regarding the performance in the first half of the year, Xu Zhijun, the rotating chairman of Huawei, said: "The overall operating situation is in line with expectations."