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The headphone brand company Wanmao Acoustics entered the company, and the company ushered in a magnificent turn.

Before the reorganization, Gunda is mainly engaged in the R & D, production and sales of micro-electroacoustic components, including micro electret microphone (ECM), micro-speaker (SPK), receiver, silicon micro-microphone (MEMS MIC) and components, modules and systems composed of micro-electroacoustic components. 17 years of impairment of assets affected by substantial losses, 18 years although reversing losses, but the overall profit level is low.

On December 18, 17, Weifang Hi-Tech, the former controlling shareholder of the company, transferred 15.27% of its shares to Aisheng Acoustics, and the transfer of shares was completed on March 6, 2018. Weifang Acoustics Technology Co., Ltd. has become the largest shareholder of the company, accounting for 15.27% of the shares. Headphone brand manufacturer Wanmao Acoustics is the controlling shareholder of Aisheng Acoustics, the largest shareholder of the company, and Mr. Xie Guanhong is the actual controller of Magic Acoustics. Gongda Diansheng completed the general election of the board of directors in April 2018, the management of Magic Acoustics moved into the listed company, and the new executive team of directors has very rich technical and management experience in the electronics industry.

Absorbing and merging Magic Acoustics, the electroacoustic device company extends downstream into the field of terminal brands.

Reverse absorption of the controlling shareholder of the largest shareholder, Magic Acoustics, to achieve synergy. Weifang Aisheng Acoustics, the controlling shareholder of Gongda Electric Acoustics, is a wholly owned subsidiary of Magic Acoustics. before the reorganization, it holds 15.27% of the shares of the listed company Gunda Acoustics through its subsidiary Acoustics. In November 2018, Gongda Electric Acoustics disclosed the pre-plan for the absorption and merger of Wanmao Acoustics Technology Co., Ltd. and related transactions of Gongda Electro Acoustics Co., Ltd. the content of the plan is that Gongda Electric Acoustics intends to acquire 100% of the shares of Wanmao Acoustics by means of a non-public offering of shares to all shareholders of Magic Acoustics, and implement the absorption and merger of Viagre Acoustics.

Magic Acoustics is valued at 3.4095 billion yuan, and Diansheng intends to pay all the consideration for this absorption and merger by issuing a total of 629 million A shares to the other party. Considering that the 5498 million shares held by Ai Acoustics, a wholly-owned subsidiary of Magic Acoustics, were cancelled after the implementation of this transaction, about 574 million new shares were actually added.

Mr. Xie Guanhong, the actual controller of Magic Acoustics, Mr. Xie Guanhong has more than 30 years of experience in the electronic and electro-acoustic industries and management. Co-founded Mega Technology Co., Ltd. (Taiwan) in 1987, served as Executive Deputy General Manager; joined Foxconn Group in 2003, served as General Manager and Deputy General Manager of iDPBG Group, General Manager of TMSBG Group; founded WanMou Acoustic Technology Co., Ltd in 2013 as Chairman and General Manager.

Blessed by high-quality shareholders, recognize the competitiveness of Magic Acoustics. Shenzhen Nanshan Hongtai, one of the shareholders of Wanmao Acoustics, now holds a 15.8575% stake in Wanmao Acoustics. In September 17, ten thousand magic acoustics signed a capital increase agreement with Nanshan Hongtai, and Nanshan Hongtai paid 400 million yuan of capital increase to ten thousand magic acoustics and 12.7043 million yuan of registered capital corresponding to ten thousand magic acoustics. One of the controlling shareholders of Nanshan Hongtai is the National Integrated Circuit Industry Investment Fund Co., Ltd., which owns a 43.75% stake in Nanshan Hongtai.

People Better Limited, another shareholder of Wanmao Acoustics, owns 10.97% of the company, and People Better Limited is 100% owned by XIAOMI Group. The company has established a long-term strategic cooperative relationship with XIAOMI. XIAOMI is the largest customer of the company's ODM, covering wired headphones, Bluetooth headsets, headphones, speakers and so on. From January to October of 18 years, the sales from XIAOMI Company is as high as 438 million yuan.

Magic Acoustics has outstanding profitability, complementary with Gunda in the upstream and downstream of the acoustics industry chain.

Magic Acoustics is a high-quality brand supplier of headphones. Magic Acoustics is mainly engaged in the R & D, design, manufacture and sales of headphones, speakers, intelligent acoustic products and key acoustic components, the main products include: wired headphones, wireless headphones, wireless AI intelligent Bluetooth headsets, intelligent AI speakers, intelligent acoustic components, headset key components and other complete product line, market coverage is wide. Magic Acoustics is an all-round original acoustic brand in China, and its products have won a number of international design awards, including German iF Design Award, German Red Dot Design Award, American IDA Fashion Design Award, Japanese Fine Design Award, as well as global authoritative media awards and recommendations, and won the "Top Ten Chinese headphone Brands in 2017" awarded by China Electronics and Audio Industry Association in 2017. Magic Acoustics customers include XIAOMI, Huawei, Asustek, NetEase, Inc, Gudong, Kuwo and other international well-known customers.

The revenue and profit of magic acoustics is growing rapidly. Since its establishment in 2013, the sales scale has grown rapidly with outstanding profitability, with a net profit of 0.34 million yuan and 0.26 billion yuan in 1517. The net profit from January to October in 18 years is 30 million yuan. The main direct customer of Magic Acoustics is XIAOMI. In terms of product structure, Wanmao Acoustics focuses on the development of intelligent wireless headset products such as Bluetooth headphones and TWS headphones, and actively develops and develops the market of intelligent speaker products.

Wanmao Acoustics has strong profitability and rapid growth, at the same time, it has a certain synergistic effect with the upstream and downstream relationship of the industry chain, so as to effectively enhance the profitability of listed companies.

The main products of Magic Acoustics are as follows:

1MORE: independent brand headphones, including in-ear moving coil headphones, in-ear coil iron headphones, headsets, Bluetooth headsets and outdoor speakers and other products.

ODM headphones and speakers: mainly for XIAOMI, Huawei (indirect customers), iQIYI, Inc., Asustek, Kuwi, Gudong, NetEase, Inc and other well-known customers to develop, design, manufacture, quality control and delivery of headphones and speakers, including piston headphones, ring iron headphones, Bluetooth headphones, intelligent wireless headphones, intelligent voice speakers and so on.

XIAOMI's product series includes wired headsets, headsets, Bluetooth headsets, speakers and other products; Huawei products include TWS headphones (Huawei FreeBuds wireless headphones), Asustek products include in-ear headphones, NetEase, Inc products include NetEase, Inc Yun Music oxygen Bluetooth headphones PRO version and other products.

Key components of headphones: mainly include moving iron, moving ring, MEMSMIC and so on. Magic Acoustics is the pioneer of moving iron unit horn, which is the first in the industry to introduce it into the stage of mass production. The unique piezoelectric horn developed by all demons has high-frequency performance and accurate analysis of natural sound quality.

The downstream customers of Wanmao Acoustics are more concentrated, and XIAOMI is the company's largest customer. In addition to XIAOMI, the company has successfully developed ODM business customers Huawei (indirect customers), and directly supplied to well-known customers such as Amazon.Com Inc, iQIYI, Inc., Asustek, Kuwi, Gudong, NetEase, Inc, JD.com, Tencent, as well as other mainstream mobile phone brand customers in China, and will establish cooperative relations with BABA and other companies in the future, and the customer structure will be gradually optimized. The R & D personnel of Wanmao Acoustics account for 60% of the total number of the company, and the R & D personnel all have more than 10 years of working experience in the audio industry, and have worked in Foxconn, Harman International, Lou's Electronics, Golmud Acoustics and other companies.

According to the headphone brand share provided by ZOL Zhongguancun online survey, the company's own brand 1MORE market share increased from 7.04% on November 12, 18 to 9.48% on April 1, 19. At the same time, the company ranked at the top of Zhongguancun online's moving coil headphones, coil iron hybrid headphones, popular headphones and headset brands, and 1MORE Baidu, Inc. Index ranked first in the industry from January 2017 to October 2018.

Magic Acoustics consistently adheres to the independent research and design of products, through the combination of self-developed key acoustic components + audio technology, to restore better sound to end consumers. After the electroacoustic restructuring, it belongs to the relationship between the upstream and downstream of the acoustic industry chain, which can better coordinate resources and promote the business development of listed companies.

In addition to its own brand 1MORE (ten thousand demons) has made well-known achievements in the industry, but also for XIAOMI, Huawei (indirect customers), VIVO, Asustek, NetEase, Inc Yun Music (NetEase, Inc strict selection), Kuwo Music, Gudong and other well-known customers at home and abroad to develop and manufacture a series of intelligent acoustic products, and make these products successful in their respective fields. At the same time, the sales channel of Magic Acoustics has covered 26 provinces and Hong Kong, Macao and Taiwan, through Hi-Fi audio agents more than 40 and more than 3000 offline experience stores, covering the airport, high-speed rail, Taiwan Eslite Bookstore and other boutiques; the overseas channels of Magic Acoustics have also been expanded to the United States, Canada, the United Kingdom, Germany, Italy, Spain, Japan, South Korea, India and other 25 countries.

The company is expected to share the wireless and intelligent dividend in the headphone market after the integration of Wanmao Acoustics.

With the gradual maturity of Wifi, Bluetooth, TWS and other wireless transmission technologies, electro-acoustic products gradually change from wired connection mode to wireless connection mode. With the increasing popularity of mobile office, sports and fitness and instant entertainment, consumers' demand for wireless connected electro-acoustic products is also growing. At the same time, intelligent acoustic products with voice interaction function have become an important entrance to the intelligent life style. Amazon.Com Inc's ECHO products, Tmall elf box and other intelligent speaker products continue to sell well, once again indicates that electro-acoustic products are becoming the "sound portal" of the Internet. With the further application of machine learning and other technologies in the field of intelligent electroacoustics, intelligent electroacoustic products can further improve the accuracy of speech recognition and semantic understanding in the future.

Since 2017, true wireless stereo (TWS) has become the main solution of the new generation of wireless stereo headphones. Industry leading products such as Apple Inc's AirPods and Samsung's Gear IconX have applied the latest TWS technology, and the built-in chips of the products can also achieve more diversified intelligent functions. According to the data of Counter PointResearch, 46 million TWS headphones were shipped in 18 years, of which Apple Inc airpods sold 35 million. It is estimated that by 2020, the global TWS headphones will reach 129 million, and the TWS global market will reach 27 billion US dollars.

The Bluetooth headset launched by its own brand 1MORE ranks fifth in the list of Bluetooth headsets on Zhongguancun online. Magic Acoustics has a high popularity and reputation, forming a more obvious brand advantage. In addition, after years of continuous investment in the field of acoustics, the company has made great achievements in key components, wireless connections, audio algorithms and acoustic design, and related technologies have been put into mass production products one after another to ensure the technical leadership of the products. The company has formed a complete product line including wired headphones, wireless headphones, wireless AI smart headphones, intelligent AI speakers and intelligent acoustic components. At the same time, the company's marketing channels have covered 26 provinces and Hong Kong, Macao and Taiwan. We are optimistic that the proportion of sales of its own brand will continue to increase, while the company's ODM business will benefit from the business increment brought about by the continuous increase in shipments of TWS headphones from mainstream mobile phone manufacturers such as XIAOMI and Huawei.

After the reorganization, the company fully benefited from XIAOMI's ecological chain and the rapid growth of TWS, giving it a "holding increase" rating.

After the reorganization, the company is expected to fully benefit from the rapid growth of XIAOMI's ecological chain and TWS, and achieve a turnround of the electro-acoustic business by strengthening research and development, increasing marketing efforts and improving management efficiency, with an estimated net profit of 03 million yuan in the first quarter. If restructuring is not taken into account, we estimate that the company's return net profit in 1921 will be 0.2710 million yuan, representing a year-on-year growth rate of 24.7%, 26.5% and 35.6%.

According to the promise of Magic Acoustics in 2019-2021, the net profit is 150 million yuan / 220 million yuan / 280 million yuan respectively. If we assume that Wandemo Acoustics has consolidated the table for the whole year in 19 years, the net profit of returning to the mother in 1921 will be 1.76 prime 2.53 billion yuan. After absorbing and merging Marvel Acoustics, the total share capital of the company is 934 million shares (360 million shares + 574 million shares), the corresponding EPS is 0.19 prime 0.27 prime 0.35 yuan per share, and the corresponding dynamic PE is 58-40-31 X, which is rated as "overweight".

Risk hint

First, the risk that the performance is lower than expected due to the failure of reorganization, or the ability of integration is not as expected after the success of reorganization.

Second, acoustic demand is affected by the decline in mobile phone shipments, resulting in shipments falling short of expectations.

Third, the competition pattern has deteriorated, industry competition has intensified, and profitability has declined.