Market Dominance
Operating out of factories in the southern Chinese cities of Shenzhen and Huizhou, Biel has become the biggest cover-glass maker in the industry, according to Claire Ohm, a spokeswoman at LG Display Co., a Seoul-based digital display product maker that’s also a customer. "A large portion of cover glass we use is largely supplied by this company," she said.
Named after the Swiss city famous for its watchmaking, Biel is the world’s biggest maker of cover glass for phones made by Apple and Samsung, according to IHS analyst Yu, who estimates the company fills more than half of the cover glass orders from the two smartphone makers. Zhu Jixiang, a Shanghai-based analyst at Capital Securities, also cites Biel as the biggest and sees that market dominance as a barrier to entry for new entrants.
"It’s hard to see a third party rise to become a competitor," Zhu said.
Biel is valued using 2014 revenue and the enterprise value- to-sales multiple for Lens. A liquidity discount of 30 percent is applied to account for the limited information about Biel’s financial results and the fact that only one peer company is used for comparison.
Competing Valuations
Way Kuo, president of the City University of Hong Kong, valued Biel at HK$110 billion ($14.2 billion) in a Sept. 23 South China Morning Post article about Yeung after the billionaire made a record $26 million donation to the school. Lens has a market capitalization of $6.4 billion and is controlled by Zhou Qunfei, China’s richest woman, who has a net worth of $5.6 billion, according to the index.
Peng Mengwu, Lens’s board secretary, said in an e-mail that it doesn’t consider Biel a competitor, adding that it serves “premium brand clients.”
Lens shares climbed 1.2 percent to 59.80 yuan at the close in Shenzhen.
To stay ahead, Yeung said in the Economic Journal interview that he’s always trying to innovate with new technology to make his glass covers fingerprint-proof and scratch-resistant. He was quoted in the Sept. 12 article that the company spends 5 percent of its total sales on research and development.