Companies in the GBA｜ What will be the second growth point for “the king of Apple supply chain”?_财经频道

（原标题：Companies in the GBA｜ What will be the second growth point for “the king of Apple supply chain”?）

南方财经全媒体记者杨雨莱广州报道

From a mundane factory girl to the owner of a billion-dollar company, a heroine’s tale like this has become a present-day reality.

Among the 2023 Fortune Global 500 rankings, a new company emerged from the Guangdong-Hong Kong-Macao Greater Bay Area, making the list at No. 479 in its maiden ranking. That new company, Luxshare Precision, was founded by Wang Laichun, a former female employee of Foxconn.

You may not be familiar with the name, Luxshare Precision, but you have most likely heard of its title as “the king of the Apple supply chain.” The connection between Luxshare Precision and Apple, begins with the experience of Wang Laichun.

In 2004, Luxshare Precision was founded in Shenzhen. The company started with electronic wires and connectors. At the outset, Luxshare’s main client was Foxconn, Wang Laichun’s former employer.

It only took six years for Luxshare to list on the Shenzhen Stock Exchange. As a result, Wang Laichun changed from being a factory worker to an entrepreneur with a listed company. After the listing, living in the shadow of Foxconn was no longer enough for Luxshare.

After its layout in the consumer electronics arena through acquisition and expansion, Luxshare found a home for itself in the supply chain for Apple. Due to its excellence in craftsmanship, Luxshare won successive orders for Apple components and products such as AirPods, Apple Watch, and the iPhone. It has now become one of the three major assembly manufacturers.

Luxshare then experienced rapid growth with the support of Apple. Since its listing, the company’s revenue has surged from 1 billion yuan to 200 billion yuan, with a compound annual growth rate of 50%.

However, behind this seemingly amazing performance data, there are imperceptible concerns. As the bond between the two companies deepens, Luxshare’s dependence on Apple grows stronger. For the past two years, over 70% of Luxshare’s sales came from Apple.

Despite the consistent increase in orders, in front of a strong counterpart of Apple, Luxshare’s profitability continues to decline in lack of bargaining power. Over the past 5 years, even its flagship business, consumer electronics has seen a continuous decline in gross profit rate, which fell below 10% in the first half of 2023.

Even if the overall state of being held hostage to price pressure can be ransomed by selling more at a lower profit margin, the threat of order cancellation or even being kicked out of the Apple supply chain which have befallen its peers, hangs over Luxshare like the Sword of Damocles...

In order to free itself of its dependence on Apple, Luxshare started to engage in multiple businesses, One of which is the automobile industry. Instead of being a car maker, Luxshare focuses on the role of being an automobile components supplier for OEMs also known as a Tier 1 manufacturer.

To accelerate the growth of its Tier 1 business, in 2022, Luxshare spent 10 billion yuan to buy Chery’s shares and partnered with GAC Group to build a joint-venture the next year. Thanks to the rapid development of China’s new energy vehicle industry, Luxshare’s revenue from automobile-related products has maintained a year-round double-digit growth in recent years. In the first half of 2023, the revenue of this business hits 3.21 billion yuan, three times more than what it was four years ago.

However, based on the revenue structure of Luxshare, the ratio of automobile business hovers at a meager 3%, providing limited help to the company as a whole. Cultivated in the Greater Bay Area, there is no doubt that Luxshare has enjoyed a leading role in the Apple supply chain. But what will be the focus of its second growth curve outside of Apple? Only time will tell.

出品：南财国际传播中心 21新媒体中心创意互动中心

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英文翻译&配音：李莹亮

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