Beijing eastern ( SZ000725) Claim to furnish funds of 380 million dollars and purchase South Korea’s modern display technology Corporation, therefore has obtained inner 3 pieces of intact production line and all TFT-LCD patented technology that has of its in the field of TFT-LCD of the latter, intangible assets such as global marketing network and extensive customer’s cluster including transnational enterprises such as IBM, Sharp,etc.,etc..
In June of 2003, claimed to invest 1,200 million dollars to build TFT-LCD industrial base in Beijing Econ & Tech Development Zone in the east of Beijing; Announce again on August 6, with victory scientific and technological ( HK0903) of purchasing the second largest display unit manufacturer in the world and precededding of 1,050 million Hongkong dollars 26.36% of the stock rights. Under the planning that CEO Wang Dong promoted, are making an intact industry chain well versed in TFT-LCD industry in the east of Beijing, the industry is in an uproar for it.
As everyone knows, TFT-LCD one raised funds in one and industry which technology combines, but managed only 4,780 million yuan of business income mainly to one in 2002, and the Chinese enterprises which key technology accumulate do not say, perhaps the investment wild ambition of nearly 2,500 million dollars which Wang DongSheng spread out in 2003 has lost contact with reality greatly.
Does Wang Dong promote arrogantly, optimistically? Is game of the industry chain full of glamour?
Purchase having mixed feelings
1980- In 1990 times, put up CRT industry system by way of joint-venture, cooperation mainly in the east of Beijing, finish transformation and staging to original electricity vaccum industries and device manufacture industries by way of researching and developing independently, and enter the accurate electronic spare part industry correlated with revealing. Since 2000, the obvious downswing appears in the business profit rate of eastern display device of Beijing. For the declining trend of torsion, have tried to extend the industry chain to the electronic consumer products in the low reaches in the east of Beijing, having introduced products such as the notebook computer, digital camera,etc., but the result is not fully up to expectations.
After thinking repeatedly, realize in the east of Beijing: From producing Panasonic kinescope to the production of the CRT display device at first, and then get to enter digital production blindly, the products are developed towards downstream low-end by the upstream high side of the industry chain gradually, has ” lost water-melons and chosen sesames ” ,It is an inevitable thing that the competitiveness lags behind. Obviously, the sterling worth of one-sided understanding industry link chain of the east of Beijing at that time conducts the centre. To poly-talented industry,it lie in who of production process first who after, the production of sector standard, patented technology and key components and parts is the most competitive links in industry chains.
See in the east of Beijing CRT display device becomes Herba Gelsemii Elegantis of dead end gradually, when TFT-LCD becomes industry’s trend gradually, determine to enter TFT-LCD field. But this is not an easy thing, TFT-LCD key technology mainly centres in Japan, South Korea and Taiwan, China, and need input of huge fund.
Analyzing oneself is good and bad, and after consulting the result of purchasing HYNIX all STN-LCD and OLED business assets of 2001, have confirmed that makes the way of dominant expansion of the competition through overseas merger in the east of Beijing. The energetical support of Beijing Municipal Government has given Beijing eastern strong guarantee which confirms the lofty or bottomless development goal of such great ambition too.
In 2003 when purchased and finished, in the golden years of global TFT-LCD industry of the positive value, enjoyed the good benefits that the achievement was promoted by a wide margin from it in the east of Beijing. But the intersection of TFT-LCD and products enter, make a reduction period fast with will it be the second half 2004, Beijing the east bear happy to lose while being huge on 2005- 2006 year. For the intersection of torsion and situation, 2007 the beginning, Beijing the east begin, plan with the intersection of China and another two TFT-LCD manufacturer - -Have the broadcasting and TV, dragon and make room the photoelectricity and carry on integration, and sold some stock right arbitrage of victory science and technology held and precededded.
Trap of the industry chain
Intent to get rid of the east of Beijing that joint-venture’s mode fetters, has obtained and entered comparatively central technology of TFT-LCD industry competition through the way of overseas merger, and ruggedization makes an TFT-LCD industry chain in the manufacturing capacity of TFT-LCD industry midstream and downstream. The one that should be affirmed is, the eastern a series of capital operation in Beijing makes oneself enter the global competition of the major industry, this is that a Chinese enterprise realize the comparatively realistic route of industry upgrading. However, pay very large cost, falls into the predicaments of fund and market at present for this in the east of Beijing. Why can be so? Is it the identification that the eastern overseas merger tactics in Beijing fail? Understand the question of eastern case of Beijing, the one that should be found out first is, in the globalization era, what is an industry chain? What is competing to link chain of link chain?
To an enterprise, it is the ideal management tactics to make the intact industry chain. However, the structure of the industry chain is not an easy thing, otherwise the trans-corporation will never miss any link of obtaining the profit, the second global industry divides the work and globalization will not appear either. The so-called industry chain is that the industry constructed together by the industry links with particular inner link gathers, the the intersection of industry and set round in a certain particular demand of serving, it is the industry on mutually a series of, interdependence involved with the service to finish the production of particular products that forms. It and industry ” Integrate longitudinally ” Essential distinction last the former to be different set of competitor, it is the help of too much resources of choice under a competition condition. In fact, this is setting foot in the foundation of TFT-LCD industry in the east of Beijing - -Bulky China’s market demand is the eastern global competitive foundation in Beijing.
The globalization of Chinese enterprises should become more globalized in collective victories of Chinese enterprise. After all, the development in more than 20 years in the past makes Chinese enterprises have such a foundation, if we can catch chance of a certain break-through, it is most worth expecting forming the collective of Chinese enterprises and breaking out of the encirclement. In this course, the support of the government is essential. The government should give Chinese enterprise essential support in industrial policy, market access and finance, could make Chinese enterprises solve and is short of fund, the narrow scheduling problem of market, spends juvenile stage as soon as possible, and grow up fast.
Chart 1 The main financial index is compared before and after purchasing Year Manage the business income mainly ’ A hundred million yuan) Net profit ( A hundred million yuan) Earning per share( Yuan) Asset-liability ratio
2002 47.8 0.83 0.15 61.06%
2003 (purchase and finish annually) 111.8 4.03 0.61 74.28%
2004 124.4 2.06 0.14 69.42%
2005 134.6 - 15.87 - 0.72 82.74%
Past three quarters of 2006 66.6 -16.27 -0.57 74.89%