Tragic! Chinese electronics maker abandoned by Apple and then kicked out of the supply chain by Samsung

South Korea’s Samsung Electronics supply chain is reportedly set to follow Apple’s lead, kicking Ovation off the supply chain list.

Prior to this Ovation issued an announcement saying that it had revised its performance expectations downward, expecting a loss of 1.85 billion yuan in 2020, after previously expecting a profit of 810 million to 910 million yuan.

The announcement said that due to this unexpected situation, the assumptions of the relevant asset impairment test changed significantly, and the company disclosed the relevant risk alert at the first time, urgently started the evaluation of the relevant assets, conducted a comprehensive inventory of the relevant assets, re-estimated the recoverable amount of the relevant assets and conducted the impairment test.

Regarding the reason for such significant difference, Ovation stated that the Company received a notice from a specific overseas customer (“Specific Customer”) on March 12, 2021, that the Specific Customer plans to terminate the procurement relationship with the Company and its subsidiaries, and the Company will not obtain any existing business orders from the Specific Customer in the future.

The Board of Directors of Ovation apologized that the termination of the order from the overseas customer due to the change of international trade environment was an unexpected event and the company could not anticipate it in advance. The company will further strengthen the management in the future to improve the accuracy of the performance forecast and performance report, please understand.

It is understood that the overseas customer, namely Apple, had contributed up to 20% of the revenue. Currently, the business has decided to be sold to Wentai Group for a total transaction price of 2.42 billion yuan.

Affected by the news that Apple kicked out of the supply chain, Officel’s share price fell from 20 yuan in the middle of last year to 8.7 yuan before the deadline, the share price fell by more than half, and the market value lost nearly 30 billion yuan.