Apple Supplier OFilm Plans to Offload $1.7 Billion of Assets
What’s new: China's OFilm Group Co. Ltd., a maker of camera modules, said it plans to sell all or part of its stakes in four subsidiaries with total assets of $1.7 billion.
OFilm didn’t disclose details of the proposed asset sales, saying the plan is still under study without concrete progress.
The four subsidiaries are OFilm’s camera modules production units in Guangzhou and Nanchang. As of the end of 2019, the four units had total assets of 11.3 billion yuan ($1.7 billion) with net assets of 3.8 billion yuan. The four companies reported combined revenue of 11.4 billion yuan in 2019 with net profit of 18 million yuan.
Why it matters: As a camera module supplier of Apple Inc., OFilm sparked speculation it may be about to lose Apple as a client with its massive asset sale plan. According to a company report, sales to Apple contributed 3.7 billion yuan of OFilm’s revenue in the first half 2020, up nearly 96% year-on-year.
Analysts said the planned divesture may reflect a move to get rid of a low-profit business. The four companies had an average profit margin of 0.12% in 2019.
OFilm is also struggling with U.S. sections after it was added to the U.S. Department of Commerce’s Entity List in October, putting the company under trade restrictions.
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