(reported by e-fanyou / Zhang Ying) on the evening of April 26, huiding technology released its 2021 annual report and the first quarter performance report of 2022. During the reporting period, the company achieved an operating revenue of RMB 5.713 billion in 2021, a year-on-year decrease of RMB 974million, or 14.57%. In the first quarter of 2022, the operating revenue was RMB 874million, a year-on-year decrease of RMB 544million, or 38%.



Zhangfan, chairman of huiding technology, said: “the company’s fundamentals have not changed. We have a very strong ability to invest in new product development. Although the Q1 statement reflects that we have short-term difficulties, we have strong confidence in the annual revenue and healthy profits.”

Figure: Zhangfan, chairman of huiding Technology

After short-term performance fluctuations, what are the positive changes in the growth structure of huiding technology? The global 5g mobile phone market is expected to ship 700million units this year, and huiding, which occupies a leading position in the optical fingerprint market, how to prospect this market prospect? In the IOT track and automobile market, what new product launches bring breakthroughs in new markets? Zhangfan, chairman of huiding technology, and huyuhua, President of huiding technology, brought us the latest market analysis and view sharing.

More balanced revenue structure: the proportion of fingerprint chip business decreased, the proportion of other businesses increased, and the growth of overseas market accelerated

Over the past decade or so, huiding technology has closely followed the development of the smart phone industry, made several transformations to overcome difficulties and achieve leaps in technology and performance, and successively entered the fields of capacitive touch, capacitive fingerprint identification and optical fingerprint identification, becoming the first chip company with a market value of more than 100 billion in a shares and the leading company of mobile phone fingerprint identification chips. However, due to the past single market and saturated market, huiding technology began to transform from a single product to an integrated IC design company as early as a few years ago. It is not only a single fingerprint and touch leader, but also defines its goal as a world leading integrated IC design company.

The performance in 2021 shows that huiding technology fingerprint chip accounted for 63.52% of the main business income, a decrease of 12.08 percentage points over the same period of last year; Touch chips accounted for 20.24% of the main business income, an increase of 4.13% over the same period last year. The proportion of other chips rose to 16.24%, an increase of 7.95% over the same period last year. We can see that the product application market of huiding technology has gradually expanded from mobile phones to new market fields such as PC, wearable, IOT and automobile. Another highlight is that the company is actively exploring the international market. In 2021, overseas revenue continued to grow, accounting for 37.21%, with a year-on-year increase of 17.19%.

It is reported that in the first quarter of this year, affected by the poor economic situation and the seasonal downturn in demand, the global demand for smart phones fell. According to the data of canalys, a research organization, in the first quarter of 2022, the global shipments of smart phones fell by 11% year-on-year. The shipment of smart phones in Chinese Mainland was only 75.6 million, a year-on-year decrease of 18%. The global sales of smart phones have declined and entered the stage of stock competition. The weakness of smart terminals and the limited chip capacity have impacted the upstream and downstream industry chain of mobile phones at both ends of the supply and demand. Huiding technology is also involved.

“We are facing difficulties today. First, objectively, the company’s current revenue mainly depends on fingerprint products and the mobile phone market. The smartphone market as a whole is not very good, and consumers’ willingness to change phones has decreased, which has a great impact on our revenue.” Zhangfan, chairman of huiding technology, said, “second, since last year, the speed of new product loading has been affected by the supply chain capacity. The rising cost of the supply chain and the continuous high investment in R & D have led to a year-on-year decline in net profit in 2021.”

Adhere to R & D investment, and release new safety chips and NFC products one after another

In 2021, huiding technology continued to increase R & D investment, with R & D expenses reaching RMB 1.692 billion, accounting for 29.62% of revenue. In the first quarter of 2022, the R & D investment was 435million yuan. During the transformation period, huiding worked hard. The company’s products have been expanded to the IOT market and the automotive market, such as touch and Bluetooth. At the same time, huiding technology has also made breakthroughs in the industrial market and the automotive market.

According to the latest data from markets and markets, the global embedded security market is expected to grow from US $6.8 billion in 2022 to US $9billion in 2027, with a compound annual growth rate of 5.9%. Recently, two chips of huiding technology appeared, launching an impact on this potential growth market. Zhangfan, chairman of huiding technology, pointed out: “our first generation ese products have passed the CC eal5+ certification, and the first generation NFC products have also been developed and passed the NFC Forum Certification. We are already cooperating with customers on projects and will be put into mass production this year.”

Why enter these projects? This is consistent with the strategic layout of huiding Technology: sensing + computing + connection + security. Security chips and NFC belong to the security category, which will promote new security applications on digital mobile terminals. It is reported that huiding technology’s first ese (embedded security element) chip took more than three years of independent research and development, and has made key breakthroughs in a number of products and certification. In addition to CC eal5+, huiding technology security chip has also obtained two heavyweight Certifications: emvco (International chip card and payment technology standards organization) and nftc (financial technology product certification), and meets international and domestic financial security standards.

Huyuhua, President of huiding technology, said: “we will continue to drive the implementation of emerging applications such as digital currency, digital identity and digital car keys with differentiated innovative products, and provide all-round protection for the data and privacy security of hundreds of millions of consumers.”

Upgrade the technical threshold! Bluetooth chip + vehicle specification chip become the future growth point

In the diversified product strategy, huiding technology is also making great efforts to lay out the Internet of things and automotive electronics racetrack, including the acquisition of NXP’s voice and audio introduction in february2020 and the acquisition of German semiconductor company DCT in August 2021 to enter the field of automotive electronics and assisted driving. The full cooperation and R & D achievements of its global R & D team also promote the growth of the segment business market.

With the development and improvement of low-power Bluetooth technology, low-power Bluetooth has ushered in considerable growth in wearable devices, smart phones, PC accessories, smart homes and other markets. According to ABI research, 987million low-power Bluetooth devices were shipped worldwide in 2021, a year-on-year increase of 26%. Huiding technology quickly seized the growth opportunity of this market segment with its excellent products.

Zhangfan said: “Huiding technology’s low-power Bluetooth SOC series chips shipped tens of millions of chips in 2021. Bluetooth products have a wide range of applications. We have used them in electronic price tags, but their applications are relatively scattered. It is necessary to establish new sales channels and service channels. Although the growth rate of performance is not as fast as that of mobile phones, we have done very important basic work. Our revenue is growing at a rate of doubling every year. In the future, Bluetooth products suitable for automotive specifications will also In the planning and development, I am still very confident in the future of this product. “

“The automotive electronics market is a very important strategic market for huiding. It has great potential. With the requirements of automotive intelligence, safety and energy saving, the number of chips used in each vehicle is growing very fast, which also brings us many new opportunities.” Huyuhua said, “the screen of electric vehicles may change from one to five. Huiding technology’s car size touch chip is just suitable for this field. The chip has the characteristics of supporting large size, excellent anti-interference and fast response, realizing full coverage from 7 to 30+ inch screens, and supporting various length width ratio screens. We will continue to develop more products in the field of on-board touch to support customer needs.”

In particular, she pointed out that both huiding Bluetooth chip and NFC have plans to accelerate the launch of vehicle specification level products, and the car audio power amplifier is also under development. When these products come out one after another, the company will become an influential player in the automotive electronics field.

At the end of 2021, huiding launched new ALS optical sensor products for the flagship model of Xiaomi, breaking the monopoly pattern of international giants. “The first generation of optical sensor products of the company took only 17 months from project approval to commercial mass production of customers, reflecting huiding’s technical ability and fighting spirit. We are very optimistic about the market opportunities of optical sensors, because there are still many customer needs.” Huyuhua said, “the first generation products of optical sensors have been commercially available and are currently being developed for the second generation products. The second generation products will bring better performance advantages in terms of ambient light, color temperature and proximity sensing.”

In the field of Internet of things connection, huyuhua believes that huiding NB IOT has three advantages: first, excellent communication performance. The advanced communication processing (CP) engine independently developed by huiding technology can still provide stable connection and reliable data transmission under weak coverage network; 2、 Equipped with ultra-low power opencpu dual core architecture, it provides sufficient on-chip resources without external MCU, and the cost of the whole solution is relatively high. Rich instruction sets and tools can help customers develop products quickly; 3、 The scalable security scheme not only supports the current domestic algorithm, but also has passed the authentication of Deutsche Telekom.

“With the increasing number of product lines, it has brought great challenges to huiding’s management, execution, global team collaboration and the expansion of new markets and customers.” Zhangfan pointed out, “no rainbow can be seen without going through trials and tribulations. Today, I still have confidence in the future of the company. I also hope you can continue to support us. We will also work hard to repay your support and trust. I believe we will soon see us re-enter a new track of rapid growth.”





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