The company absorbs and merges magic acoustics to realize the layout of acoustic components + whole machine industry chain, ten thousand magic ODM business benefits from the outbreak of intelligent audio industry, and its own brand business is expected to become a leading acoustic brand in China. Recently, the company released a revised absorption and merger plan, and the proportion of excess performance rewards for management of Marvel Acoustics has been reduced from 100% to 50%. In the future, it will substantially increase the company's profits after the merger and open up the upward space for the stock price. Assuming that the restructuring is completed in 2019, we expect that the EPS of listed companies in 2020-2021 will be 0.06 Universe 0.33 Unix 0.43 yuan, covering for the first time and giving a "buy" rating.
Traditional electroacoustics manufacturers absorb and merge acoustics rookies to create acoustics components + whole machine industry chain. A total of electro-acoustic main speakers, microphones and other electro-acoustic components. In December 2018, the company announced that it is proposed to absorb and merge 100% equity in Marvel Acoustics in the form of additional issuance, which are ODM (original design provider), private brand business and acoustic components. In terms of ODM business, Magic Acoustics is a rare domestic manufacturer with complete acoustic design + components + whole machine, the core mastering the design link and maintaining close cooperation with the foundry, the business will benefit from the outbreak of intelligent audio industry and rapid growth; its own brand business focus on high-end acoustic products is gradually opening up domestic awareness, and is expected to become a leading domestic acoustic brand in the future. After the completion of the transaction, Gunda Electro Acoustics + Magic Acoustics will open up a new growth space in the mode of acoustic components + whole machine industry.
Ten thousand demons ODM business: benefit from the outbreak of the intelligent audio industry, it is estimated that the revenue in 2019 will reach 1.6 billion yuan in 2020. Product side: ten thousand demons started with XIAOMI headphone ODM business in 2013 and is the core supplier of XIAOMI headphones.
Since 2018, the intelligent audio industry has broken out, and we estimate that global Android TWS headphones will ship 35 million / 70 million units in 2019 / 2020. The company produces TWS headphones such as XIAOMI Air and Huawei FreeBuds series, and its revenue is expected to be 101.6 billion yuan respectively in 2019. Client: in 2017 / 18, the revenue of XIAOMI accounted for 64% of the total revenue, 60% of the total revenue, and the proportion of revenue reached 13% in 2018. The proportion is expected to increase further in 2019. In the future, with excellent design and production capacity, the company is expected to gradually cut into the supply chain of well-known manufacturers such as OPPO, vivo, BABA and Alphabet Inc-CL C. Among them, TWS headphones in cooperation with OPPO and BABA are expected to be listed by the end of 2019.
Ten thousand demons own brand business: awareness gradually opened, committed to building a leading domestic middle and high-end acoustics brand.
From 2016 to 2018, the revenue of Wanmao Acoustics's own brand business is 0.81 more than 1.6 billion yuan respectively, focusing on the domestic high-end headphone market, and its popularity has gradually opened up. We believe that, 1, differentiation positioning of domestic mid-and high-end products; 2, overseas and then domestic market strategy; 3, Jay Chou and other well-known artists to participate in promotion; 4, "online sales + offline experience / sales" model, will accelerate the expansion of the domestic market, it is estimated that in 2019, the revenue will be 221 million yuan, respectively.
Ten thousand demons industrial layout: focus on audio business, expand wearable, health, car and home areas. At present, the business of Magic Acoustics is still based on consumer electronics such as headphones and speakers, and the medium-term dimension will benefit from the high growth of subdivisions such as TWS headphones and smart speakers. In the long run, Magic Acoustics revolves around the audio business and is committed to developing four areas of smart wearability + health + car + home. In terms of intelligent wearable, headphones and other products have landed on the ground; in terms of intelligent health, the company has released intelligent hearing products for people with hearing impairment, and the follow-up products will be further iterated; in terms of smart vehicles, Wandemo Acoustics began to layout 2 years ago, and related technologies have been applied to Mazda and other models; in smart home, the company will mainly focus on the audio module of hardware products in the future.
Risk factors: the risk of restructuring failure; increased competition in the industry; new product promotion is not as expected; R & D is not as expected.