① In terms of performance, Xinya Micro's revenue and other financial data showed a certain high growth rate in recent years. The compound annual growth rate of revenue during the listing reporting period was 52.00%, but its overall profit amount was highly dependent on tax incentives and government subsidies; ② The production and sales rate of Silicon Micro's products in recent years has not been saturated. The production and sales rate of chip products is only 80%, and there are doubts about the need to raise capital.
“Science and Technology Innovation Board Daily”, April 18 (Reporter Guo Hui) The IPO of a chip manufacturer from the “strongest venture capital city” has come to an end.
On the evening of April 17, the official website of the Shanghai Stock Exchange showed that the listing process of Hefei Xingu Microelectronics Co., Ltd. (hereinafter: Xinya Micro) had been terminated. According to the announcement, Xinya Micro and its sponsor, Guoyuan Securities, recently submitted separate documents and applied for the withdrawal of the Science and Technology Innovation Board IPO plan. According to the relevant provisions of Article 63 of the “Shanghai Stock Exchange Stock Issuance and Listing Review Rules”, the Shanghai Stock Exchange decided to terminate the review of Xingu Micro's initial public offering of shares and listing on the Science and Technology Innovation Board.
Xinya Micro's main business involves R&D, design, production and sales of semiconductor microwave millimeter wave chips, microwave modules, and T/R components. It mainly provides a series of products based on GaAs and GaN compound semiconductor processes, and provides technical development services around related products. According to the prospectus, the company's products and downstream technology are mainly used in defense and military fields such as electronic countermeasures, precise guidance, radar detection, military communications, etc., and is gradually expanding into civilian fields such as instrumentation, medical equipment, satellite internet, and 5G millimeter wave communication.
Since the Securities Regulatory Commission proposed a phased tightening of the pace last year, a number of semiconductor industry companies have terminated the IPO process on the Science and Technology Innovation Board, including Anxin Electronics, Simbond Technology, etc., and since this year, 16 companies have successively terminated their listing declarations on the Science and Technology Innovation Board. Among these companies, quite a few have obvious “serious injuries” in terms of performance.
Take Xinya Micro as an example. In terms of performance, the company's financial data such as revenue has shown a certain high growth in recent years. According to the prospectus, its operating income from 2020 to 2022 was 64.4084 million yuan, 99.5821 million yuan, and 149 million yuan respectively, with a compound annual growth rate of 52.00%; net profit to mother was 377.91 million yuan, 42.62 million yuan, and 57.8032 million yuan, respectively.
However, the “Science and Technology Innovation Board Daily” reporter noticed that its overall profit amount is highly dependent on tax incentives and government subsidies, and that the financial content behind the rapid growth in performance may be insufficient. In the first round of inquiries issued by the Shanghai Stock Exchange, questions about the company were also inquired about.
During the reporting period, the company's tax concessions amounted to RMB 3.8381 million, RMB 12.118,600, and RMB 14.7816 million respectively, accounting for 8.96%, 28.45% and 25.57% of the total profit for the same period; at the same time, the amounts included by the company in current government subsidies were RMB 9.582 million, RMB 10.23,800 and RMB 10.746,800, respectively, accounting for 22.36%, 24.04% and 18.59% of total profit for the same period.
The production and sales rate of Shinitani Micro's products has not been saturated in recent years, and the need to raise capital is questionable. According to the prospectus, the production and sales rate of its chip products from 2020 to 2022 was 84.75%, 80.17%, and 80.40%, respectively, and the production and sales rate of module products in 2022 was 84.78%. In an inquiry, the Shanghai Stock Exchange asked it to explain the reason for the decline in production and sales rates, as well as the problems with capacity absorption caused by raising capital and expanding production.
Xinya said that the decline in the production and sales rate is due to the continuous diversification of its product range, and the company's production scale has increased; at the same time, based on the characteristics of small-batch and multi-batch delivery of its products, and its relatively long production cycle, in order to meet the timely delivery needs of customers, combined with factors such as continuous expansion of its business scale, continuous growth in in-hand orders, and research and judgment on future market demand trends, it is necessary to maintain a certain amount of product preparation.
According to information, after listing on the Science and Technology Innovation Board, Xingu Micro plans to invest 500 million yuan in microwave chip packaging and module industrialization projects. The project will add 6 million chips and 6,000 additional module products, and plans to reach production in the second half of 2028.
Xinya Micro predicts that assuming the compound growth rate of chip business revenue remains 30% and module revenue remains 50% in the next seven years, then it is predicted that the new production capacity will be effectively digested, and production capacity demand will be maintained after the fund-raising project is completed.
However, whether this estimate is reasonable and whether Sigoku Micro's future product sales can achieve high growth as expected also depends, to a certain extent, on the company's technological competitiveness.
According to information, the main participants in the military microwave millimeter wave chip market segment of Xingu Micro include foreign companies such as ADI, Qorvo, and MACOM, as well as units affiliated with large domestic military groups and a few private enterprises. Among them, domestic manufacturers are mainly concentrated in the middle and low end markets.
Judging from Xinya's small situation, it had more than 700 customers at the time of filing for listing. Apart from some well-known customers, more than 600 were small to medium customers.
Xinya Micro also does not have sufficient advantages in product pricing. According to information, since overseas companies have a first-mover advantage, the pricing is usually higher. In response to the inquiry, Xinya said that in order to obtain customer orders, the company will give certain price discounts, so the price of the main products is generally lower than that of well-known foreign companies in the same industry.
Currently, in the context of adhering to the “hard technology” position and improving listing entry, the Science and Technology Innovation Board is further increasing the requirements for indicators such as R&D investment amount, number of invention patents, and revenue growth rate of enterprises applying for the Science and Technology Innovation Board, while strengthening the requirements for measuring investment in scientific research, scientific research results, and growth. Furthermore, the Securities Regulatory Commission will further increase the proportion of randomly selected and inspected companies to be listed.
According to some market participants, this means that it will be more difficult for technology companies to go public, and the success of the company's core technology, operational compliance, and the sustainability of performance growth will be scrutinized more strictly.
Yuan Shuai of the China Urban Development Research Institute said that the increase in order withdrawals this year may be the result of market self-regulation and changes in regulatory policies. “For the science and technology innovation board market, attracting and cultivating high-quality enterprises is the key to future development.”
Qu Fang, an investment advisor at Wanlian Securities, believes that standardized corporate finance and internal control mechanisms are essential to enterprise development. At the same time, the future capital market needs not only companies with steady operations and excellent performance, but also companies with clear shareholding and standardized management standards.