In the past four years, after several twists and turns, Hon Hai’s acquisition of Sharp’s dust settled.
Japan's Sharp Corporation announced on August 12 that it has accepted Hon Hai Precision (2317.TW) for 388.8 billion yen in capital injection and officially became a subsidiary of Taiwan Hon Hai. In the eyes of the industry, the combination of the two will not only help Sharp out of the quagmire, but also use Hon Hai to carry out the entire industrial chain layout and diversify its business structure. However, it is accompanied by personnel and other aspects of the running-in, and Hon Hai's high hopes for OLED panels to put into production still have time difference.
The "China Business News" reporter sent a letter to Hon Hai on the business and personnel issues after Hon Hai's acquisition of Sharp. As of press time, he has not received a reply.
The required marriage
It is reported that Hon Hai has started to invest in Sharp and will acquire Sharp 66.07% common stock. Affected by this, Sharp shares rose 19% on the 12th. On the 15th, the Japanese rating investment information center upgraded Sharp's rating from the previous "CCC+" to "B".
At this point, the acquisition of the long-distance run since 2012 has come to an end. And Guo Taiming will reinvigorate Sharp as a second venture. In the eyes of many industry insiders, Guo Taiming's high hopes for Hon Hai are more due to the consideration of the whole industry chain layout and diversified business structure.
At present, Foxconn, owned by Hon Hai, is Apple's largest factory in the world. It mainly manufactures the outer casing of Apple's mobile phone and the electronic board of integrated circuits, but has never been involved in the more important LCD screen of mobile phones. Sharp has an outstanding advantage in OLED technology and resource reserves, and has a comprehensive layout from the 4th generation line to the 10th generation line. “With the acquisition of Sharp, Hon Hai can extend the assembly and core components to the upstream panel of the industrial chain to create an integrated supply chain structure, effectively ensuring one-stop raw material procurement and process production for mobile phone manufacturers.†Sun Yanxi, dean of the institute, said that on the one hand, Hon Hai will have more initiative and voice in grabbing orders for Apple's OLED screen phones; on the other hand, Hon Hai's cost-effective full-chain structure for the rising China The smartphone army is also very attractive.
In fact, Hon Hai’s recent performance is not good due to its high relevance and dependence on Apple’s business. Hon Hai's latest second-quarter earnings report showed that revenue fell 5.2% to $29.45 billion, net profit fell 21% year-on-year to $566 million, and net profit margin was 1.92%, the lowest since 12 quarters.
The acquisition will hopefully help Hon Hai to get rid of Apple's dependence. “After the acquisition, Hon Hai’s business layout will not only be limited to consumer electronics such as mobile phones and TVs, but will even be extended to automotive in-vehicle systems.†Sun Yanwei continued, Hon Hai has tried to get involved in electric vehicles, retail and e-commerce in recent years. , supply chain finance, P2P business.
For Sharp, which is deeply in the quagmire of losses, Hon Hai’s capital injection is like a long drought. Sharp's huge deficit of 222.3 billion yen in 2014 was in a dilemma. In 2015, the deficit scale further expanded to 255.9 billion yen. As of the end of March 2016, Sharp has been insolvent. The Tokyo Stock Exchange also announced on June 23 that from August 1st, Sharp will be downgraded from the main board to the small and medium board.
“Sharp’s problem lies in the lack of funds. After Hon Hai’s capital injection, on the one hand, it has more energy and capital to invest in the research and development of small-screen OLEDs; on the other hand, with Hon Hai’s huge OEM orders, Sharp has Some LCD panel production capacity will be fully released." Dong Wei, general manager of Avi Cloud (AVC) Black Power Division, believes that the Sharp brand's color TV, mobile phone, white goods business, etc. are also expected to get rid of the predicament.
Or facing integration pain
Compared with the beautiful picture after the acquisition, the rumors of people leaving and layoffs from time to time also make the good marriage of the two more suspense.
The Chinese market once occupied about 40% of Sharp's revenue. Recently, it was reported that Sakai Trading (China) Co., Ltd. President Sakai was retired. It is reported that as a China Pass, Sakai has been serving in China for many years and speaks fluent Mandarin and is very familiar with the Chinese market. Previously, there were reports from Japanese media that Sharp had left more than 3,000 people in September 2015. Former president Katayama Katsuo and former deputy director Daxi Chefu switched to Nidec Corporation, former executive director Fang Zhijiao and in July 2016 transferred to Sharp competitor Japan Display Company (JDI) as vice president, once let the industry Shocked.
For Hon Hai, who values ​​Sharp technology, the loss of technical talent is inevitable. In this regard, Dong Min pointed out: "The loss of talent is inevitable." Compared with the promotion of inter-enterprise mergers and acquisitions from the capital level, the change of personnel is the process of mutual competition between different corporate cultures. With the Hon Hai Group Vice President Dai Zhengwu will be the new CEO of Sharp, the use of desktop paramilitary style to reorganize Sharp is also on the agenda.
"Guo Taiming's acting style is quite a decisive color of the 'Tsar', and it is quick and decisive, emphasizing control. Sharp has been trapped in the liquidity of the LCD industry for many years, and its efficiency is low. The company's operating history has lasted for hundreds of years, and its corporate culture is self-contained and ingrained. There must be a break-in in the middle.†Dong Min continued that the corporate governance system and concept with the Chinese model took root in Japan and must be prepared for thinking change and cultural collision.
Compared with Guo Taiming's hurricane-style business reorganization, which has brought inevitable pain to Sharp, Guo Taiming's prepared acquisition also has a clear utilitarian color.
Dai Zhengwu said at the shareholders' meeting that he would use the spirit of Hon Hai to run Sharp, and also required all units to be fully profit-centered, and all business groups must make money. He revealed that at present, Hon Hai has planned five business directions, such as the Internet of Things, healthy living, smart home, high-tech, and clean energy, which will make Sharp defeat the victory. And Guo Taiming even said that if the short is 3 years old, it will be 6 years. If Hon Hai manages Sharp, he is willing to return it to Sharp.
At present, the technical aspects of the Internet of Things and smart home are becoming more and more mature, but external conditions such as network or communication conditions and access standards are not enough to support. Yang Jianyong, founder of the Sensor Internet of Things, said: "It is indeed forward-looking to choose the long-term layout of these business segments, but it is still too early to regard it as a short-term profit growth point."
In addition, although Hon Hai has reorganized Sharp, the establishment of OLED technology has been consistently optimistic in the industry, but according to people in the supply chain, it takes at least two years for OLED panels to go into production. In addition, Samsung Display, LGD, etc. have formed an absolute monopoly in the field of OLED, and it is difficult to achieve immediate results.
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