TES(SZ:003019)2024-11-07 16:26Company and Industry Summary Company Overview - The company is involved in the manufacturing and supply of display technologies, particularly for automotive and commercial applications. It has established a significant relationship with Tesla, supplying components for their vehicles. Key Points Industry Context - The potential impact of international political changes, particularly the re-election of Donald Trump, on foreign trade and tariffs is being closely monitored. The company believes that the overall impact of U.S. tariffs on their industry is relatively minor, estimated at less than 10% for exports to the U.S. [1][2] - The company has already established a factory in Thailand, which is expected to begin mass production in Q4 of this year. This move is aimed at mitigating risks associated with U.S. tariffs on imports from countries with lower labor costs, such as Vietnam and mainland China [2][3]. Strategic Positioning - The company is strategically positioning itself to adapt to potential changes in U.S. trade policies by establishing manufacturing capabilities in Thailand and planning for future factories in Europe and the U.S. [3][4] - The company has a competitive advantage due to its established relationships with local teams and distributors in the U.S. and Europe, which will facilitate the management of new factories [4][5]. Relationship with Tesla - The company is a key supplier in Tesla's supply chain, and the re-election of Trump is viewed as potentially beneficial due to the close ties between Trump and Tesla's CEO, Elon Musk. This relationship may lead to favorable policies for the company [4][5]. - The company is currently focusing on increasing its share in Tesla's North American factory and is exploring opportunities in Tesla's Shanghai factory [5][6]. Financial Performance - For the first three quarters, the company reported revenues of 1.866 billion, a 50% year-over-year increase, with net profits of 163 million, up 44% year-over-year. The automotive segment has seen significant growth, with a 160% increase compared to the previous year [12][13]. - The company’s main business segments include traditional business (approximately 12-13 billion) and automotive business (around 6 billion), indicating a strong growth trajectory in the automotive sector [12][13]. Market Dynamics - The company is facing challenges due to a major North American client restructuring its hardware and software, which has temporarily affected order fulfillment. However, it is expected that this will stabilize in the upcoming quarters [13][14]. - The automotive segment is projected to contribute significantly to future revenues, with expectations of increased production capacity from the Thailand factory [20][21]. Product and Pricing Strategy - The company offers a range of products, including displays and integrated systems, with pricing strategies that vary based on customization and market demands. The average price for automotive displays ranges from $200 to $250, while integrated systems are priced between $300 and $500 [17][18]. - The company is also focusing on developing its own brand, Micro Touch, to enhance margins and market presence, particularly in the U.S. and European markets [26][27]. Future Outlook - The company is optimistic about the growth of its proprietary brand and is actively expanding its sales channels in Europe and Southeast Asia. It aims for the proprietary brand's growth to outpace traditional business growth [26][28]. - The company is also exploring investment and acquisition opportunities, particularly in overseas markets, to enhance its competitive position and leverage its cash reserves [11][12]. Conclusion - The company is well-positioned to navigate the complexities of international trade and market dynamics, particularly through its strategic partnerships and manufacturing capabilities. The focus on growth in the automotive sector and proprietary branding is expected to drive future performance.