On June 11, Capital State learned that Shenzhen Yingjixin Technology Co., Ltd. (hereinafter referred to as “Yingjixin”) entered the IPO application on the Science and Technology Innovation Board and was accepted by the Shanghai Stock Exchange on June 10.
Image source: Official website of the Shanghai Stock Exchange
Yingjixin is a high-performance, high-quality digital-analog hybrid chip design company. Its main business is the R&D and sales of power management and fast charging protocol chips. Its industry is computer, communication and other Electronic equipment manufacturing. At present, the company has become one of the main suppliers of power management chips and fast charging protocol chips in the consumer electronics market based on its dominant position in applications such as mobile power sources (ie power banks) and fast charging source adapters (ie chargers, charging heads). one. While consolidating the dominant position of mobile power chips, fast charging protocol chips, car charger chips, wireless charging chips, TWS earphone chips and other products, the company will continue to deploy in intelligent audio processing, household appliances, Internet of Things, automotive electronics and other directions in the future. .
Image source: Company prospectus
Financial data shows that the company’s revenue in 2018, 2019, and 2020 was 217 million yuan, 348 million yuan, and 389 million yuan, respectively; the corresponding net profits in the same period were 27.3586 million yuan and 1,601.6 million yuan, respectively. 750,000 yuan and 62,060,200 yuan.
According to the “Audit Report” issued by Rong Cheng Accountants, the issuer’s operating income in 2020 was 389,269,000 yuan, and the net profit attributable to shareholders of the parent company in 2019 and 2020 (the lower one before and after deducting non-recurring profits and losses is calculated). basis) were 16,019,300 yuan and 61,939,400 yuan respectively. At the same time, considering the valuation of companies with the same industry classification as the issuer’s in the domestic market and the issuer’s financing valuation in August 2020 (the capital increase corresponds to the issuer’s post-investment valuation of 2.62 billion yuan), it is estimated that The market value of the issuer after the issuance is not less than RMB 1 billion.
Therefore, according to Article 22 of the “Science and Technology Innovation Board Stock Issuance and Listing Review Rules of the Shanghai Stock Exchange”, the specific listing criteria selected by the issuer are “(1) The estimated market value is not less than RMB 1 billion, and the net profit in the last two years is All are positive and the accumulated net profit is not less than RMB 50 million, or the estimated market value is not less than RMB 1 billion, the net profit in the most recent year is positive and the operating income is not less than RMB 100 million.”
Yingjixin admits that the company faces risks such as intellectual property rights, declining gross profit margins, and fluctuations in operating performance.
(1) Intellectual property risks
Since its establishment, the company has always adhered to the research and development strategy of independent innovation, and has applied for a number of invention patents, utility model patents and exclusive rights to layout designs of integrated circuits to protect its legitimate interests. These intellectual property rights have played an important role in the company’s operations. . However, considering the particularity of intellectual property rights, it is still possible for third parties to infringe on the company’s intellectual property rights, and it is difficult to obtain infringing information in a timely manner, and the cost of rights protection is high, which may adversely affect the company’s normal business operations. At the same time, it is not ruled out that a few competitors adopt the strategy of litigation and use intellectual property-related litigation to delay the company’s market expansion. As of the signing date of this prospectus, the issuer has pending intellectual property ownership disputes. For details, please refer to “III. Litigation or Arbitration Matters” in “Section 11 Other Important Matters” of this prospectus. There is a possibility that the issuer will be judged to constitute infringement and lose the case in the relevant pending intellectual property ownership disputes. At the same time, the possibility of the company’s competitors or other third parties having intellectual property disputes with the company cannot be ruled out. If the above events occur, it will have an adverse impact on the normal business operations of the company.
(2) Risk of decline in gross profit margin
The downstream application fields of the company’s products are mainly consumer electronics, and consumer electronics products are updated quickly, while chip products for the consumer electronics market can obtain higher gross profit in the initial stage of listing, but with the passage of time, the price gradually decreases, and the gross profit rate increases. generally showing a downward trend. During the reporting period, the company’s main business gross profit margins were 38.64%, 38.84% and 36.07%. In order to keep up with changes in market trends, the company needs to continuously carry out technological innovation and product upgrades. If the company fails to update existing products or launch new products in line with market trends in a timely manner according to market demand, product prices may drop and the proportion of sales of high-margin products may decrease. The company’s comprehensive gross profit margin fluctuates, which adversely affects the company’s operating performance.
(3) Risk of fluctuation in operating performance
In 2018, 2019 and 2020, the company’s operating income was 216,676,700 yuan, 348,047,000 yuan and 389,269,000 yuan respectively, with a compound annual growth rate of 34.04%; after deducting non-recurring gains and losses The net profit to shareholders of the parent company was RMB 34.2312 million, RMB 63.0960 million and RMB 61.9394 million respectively, with a compound annual growth rate of 34.52%.
During the reporting period, the company’s downstream market grew rapidly, the company continued to launch new products that meet customer needs, and its performance continued to grow. However, the domestic integrated circuit design industry is developing rapidly, and the good prospects have attracted more new entrants to participate in the market competition. The original manufacturers in the industry are actively exploring the market on the basis of consolidating their own competitive advantages, and the market competition is constantly intensifying. At the same time, the company’s products are mainly used in the field of consumer electronics, the market competition is relatively fierce, and the technology and product update speed is fast. Although the company has gained a certain market share and brand awareness in the industry after years of technology and sales accumulation and brand building, and has a certain competitive advantage, compared with the large manufacturers in the industry, the company still has a certain improvement in all aspects. space. If the company fails to accurately grasp the dynamic changes in market demand and industry development trends in the future, the company’s research and development results do not meet expectations, are affected by risk factors such as changes in the market environment, or the future market development is limited, the company’s performance growth trend may not be sustainable. There is a risk of fluctuation in future operating results.
(4) Risk of International Trade Friction
In recent years, international trade frictions have continued to escalate. Relevant countries have issued a series of export control policies targeting China in semiconductor equipment, materials, technologies and other related fields, restricting Chinese companies from obtaining materials, technologies and services related to the semiconductor industry. The company currently has a large number of overseas purchases. The company’s main suppliers such as GlobalFoundries, TSMC, etc. are all overseas manufacturers. The above export control policies may result in restrictions on their supply or service to the company. Although the company’s procurement can choose domestic suppliers to replace production, it still requires conversion costs and a running-in period. Therefore, once the supplier’s supply is constrained due to international trade frictions, the company’s normal production and operation will be adversely affected.
(5) Risk of high supplier concentration
The company adopts the Fabless business model, mainly engaged in the design and sales of chips, and the production links such as wafer manufacturing, packaging, and testing are completed by wafer manufacturers and packaging and testing manufacturers. The wafer manufacturing and packaging and testing industries have large capital investment, high technical thresholds, and high industry concentration, so the company’s suppliers are relatively concentrated.
During the reporting period, the company’s purchases from the top five suppliers accounted for 92.11%, 91.32% and 90.00% of the current total purchases, respectively. If major suppliers stop production or supply due to emergencies such as natural disasters, major accidents or changes in the international political situation, it may affect chip manufacturing and on-time delivery; in addition, wafer procurement and packaging and testing costs are the main components of the company’s operating costs , If the above-mentioned major suppliers have adverse changes in their own business operations, cannot adjust their production capacity in a timely manner to meet the company’s procurement needs, or stop supplying the company due to other force majeure factors, it may have an adverse impact on the company’s operating results.
(6) The risk of limited production capacity caused by the imbalance of market supply and demand
Recently, due to changes in market supply and demand, there has been a shortage of wafer supply in the industry, and IC design manufacturers are generally facing the situation of tight wafer manufacturing and packaging and testing capacity. Although the company has taken corresponding measures to lock some production capacity and ensure the supply of production capacity, there is still a possibility that the company’s supply chain will be tight and procurement costs will increase due to changes in the international political and economic environment, fluctuations in chip market demand, and price changes. At the same time, if the production capacity of upstream manufacturers such as wafers, packaging and testing continues to intensify in the future, it may lead to the risk of limited production capacity of the company, which will adversely affect the company’s daily operations and profitability.
(7) Risk of insufficient continuous innovation capability
With the increasing expansion of downstream application fields, the application scenarios of integrated circuits are becoming more and more extensive. In order to adapt to market changes, continuous innovation has become an important means for enterprises in the industry to maintain their market positions. The company needs to continuously carry out R&D and innovation according to technological development trends and changes in customer needs, and maintain market competitiveness by continuously launching products that meet customer needs and have advanced technology.
During the reporting period, the company’s research and development expenses were 33.2275 million yuan, 44.2605 million yuan and 50.6500 million yuan, accounting for 15.34%, 12.72% and 13.01% of the operating income respectively. The company’s products need to invest a lot of money and manpower from research and development to mass production. The research and development process is long and there are certain uncertainties. If the company cannot accurately grasp the market development trend, maintain continuous innovation ability, or the company’s future research and development funds are insufficient, it may cause the company’s products and technologies to not meet the needs of the downstream market, which will lead to the decline of the company’s market competitiveness and the development of the company. bring adverse effects.