"Science and Technology Innovation Board Daily" June 7th news (reporter Wu Xuguang) recently, Shanghai Win Double Electric Motor Technology Co., Ltd. (Win Double Technology), a rotating transformer enterprise, IPO audit status has been changed to "Terminated" by the Shanghai Stock Exchange. The reason is that Win Double Technology and its sponsor Haitong Securities withdrew the application for issuing and listing, and Shanghai Stock Exchange terminated the review of issuing and listing.

Regarding the reason for the withdrawal and the company's future financing plan, the journalist of "Science and Technology Innovation Board Daily" repeatedly called the company's Secretary Office, and its staff said, "The company does not have any financing needs for the time being." The person did not respond further about the company's future plan.

Win Double Technology originally planned to raise 847 million yuan and invest in projects such as "Production of 9.1 million sets of rotating transformers annually" and "Construction of research and development center". The journalist of "Science and Technology Innovation Board Daily" noticed that recently, the price reduction trend has emerged in the new energy vehicle market, and the price of rotating transformers is under pressure. As of June 2023, the prices of multiple models of Win Double Technology products have dropped by about 3.73%-17.08% year-on-year, with a relatively large decline.

Some institutional investors stated that Win Double Technology's business is mainly focused on rotating transformers, and withdrawing IPO materials may be related to the low added value of the company's products, weak market bargaining power, and insufficient scientific and technological innovation attributes.

The core product unit price has been reduced by up to 17.08%.

Win Double Technology mainly engages in the research and development and production of rotating transformers, which are divided into reluctance-type rotating transformers and winding-type rotating transformers, and are applied in new energy vehicle electric drive systems, industrial servos, and other fields.

In terms of financial data, from 2020 to 2022, Win Double Technology's revenues were 46 million yuan, 159 million yuan, and 352 million yuan respectively; and its net income was 9 million yuan, 57 million yuan, and 139 million yuan respectively during the same period. Income growth mainly comes from the sales revenue growth of reluctance-type rotating transformers in the main business.

In terms of market share, in the field of new energy vehicles, during the reporting period, Win Double Technology's domestic market share has increased from 21.32% to 50.25%.

Regulators require Win Double Technology to explain whether there is a bottleneck in the company's future market expansion when the company's market share in China's new energy vehicle market has reached 50%.

Regarding this, Win Double Technology said, "The penetration rate of new energy vehicles in the world and China is still in a low-rate rapid growth stage, and new energy vehicles are showing a trend of high-end and multi-motorization. Rotational transformation still has a large market demand space in the new energy vehicle market.

It should be noted that in recent years, new energy vehicle manufacturers such as BYD Company Limited, which is a major customer of Win Double Technology, have started a "price war" to accelerate the replacement of traditional fuel-powered vehicles by means of reducing costs and prices and exchanging them for volume.

According to the data disclosed by Win Double Technology, during 2020-2022, the sales of its reluctance-type rotating transformers were 28.16 million yuan, 127.01 million yuan, and 161.72 million yuan, with average unit prices of 83.59 yuan, 67.41 yuan, and 68.56 yuan respectively. Among them, the sales of products with unit prices above 100 yuan account for 19.42%, 5.70%, and 3.31% respectively, and the added value of products has dropped significantly.

Affected by the price reduction trend, as of June 2023, the prices of major product models of Win Double Technology such as Type A, Type B, Type C, and Type E have all declined to varying degrees, with year-on-year declines of 17.08%, 5.23%, 8.29%, and 3.73%, respectively. Only the unit price of its Type D product was relatively stable, achieving a year-on-year growth of 1.55%.

In the industry's view, although Win Double Technology claims that its "technical level is high," the fact that the added value of its products has been declining is an indisputable fact.

An analyst from a market research institution told "Science and Technology Innovation Board Daily" that unlike active price reduction, passive price reduction is a behavior of following the price reduction under the downward transmission of the industrial chain. If the company's products do not reduce prices, they will face the risk of being eliminated by the market. "This also indirectly indicates that the company still has a lot of room for growth in scientific research strength, market premium capacity, and other aspects."

In the opinion of Zhang Xiang, an automotive industry analyst and guest professor of the Yellow River University of Technology, as the "price war" in the new energy vehicle market escalates, upstream automotive parts and components manufacturers face price shocks in the end market, and the price of reluctance-type rotating transformers still faces certain downward pressure.

"Under the influence of market supply and demand, product technology, industry conventions, and other factors, the business environment in which companies operate may undergo significant changes, which will have an adverse effect on their sustained profitability. Perhaps this is one of the important reasons for the withdrawal of Win Double Technology's IPO application," Zhang Xiang added.

The research and development expenditure ratio has been decreasing year by year.

The reporter from the Star Daily of the Science and Technology Innovation Board reviewed the inquiry letter and found that the main questions of the Listing Audit Committee's inquiry to Winsun Technology were: combining the above-mentioned patent quantity, proportion of research and development expenses, etc., explain whether the issuer's field has a high technical barrier and specific embodiment, and whether the company has continuous research and development capabilities.

Winsun Technology stated that the company has formed an autonomous and controllable product line in the new energy vehicle electric drive system, which is dominated by foreign giants and has high technical difficulties, and is gradually realizing import substitution for international well-known brands.

During the reporting period, Winsun Technology's R&D expenses were 706.62 million yuan, 1083.00 million yuan, and 2067.09 million yuan, accounting for revenue shares of 15.34%, 6.77%, and 5.87%, respectively.

Unlike the trend of R&D investment in the same industry, Winsun Technology showed a downward trend year by year during the reporting period. As of the first half of 2023, the company's R&D expense ratio has dropped to 5.87%.

Winsun Technology stated that in 2021 and 2022, the company's R&D expense ratio was lower than the average of comparable companies, mainly due to the explosive growth of order volume and revenue scale, and the absolute increase in R&D investment such as talent team building was lower than the increase in revenue scale.

From the perspective of regulatory requirements for enterprise science and technology attributes, Winsun Technology barely passed some indicators.

Winsun Technology's cumulative R&D investment accounted for 6.91% of cumulative revenue in the past three years, slightly exceeding the regulatory requirement of 5%. The R&D expense ratio in 2022 was only 5.87%, lower than the average of comparable companies of 7.44%. The cumulative R&D investment amount in the past three years was 38.5671 million yuan, lower than 60 million yuan.

In addition to the decrease in its own R&D expense ratio, Winsun Technology's science and technology attributes are slightly insufficient in the conversion of high R&D investment to real productive forces. In terms of patent reserves, the company has 11 invention patents, which is lower than Kaitu shares, Gao Hua Technology, and other peer companies with 25 and 30 invention patents, respectively.

For science and technology board companies, R&D investment amount, number of invention patent applications, etc. are also one of the focuses of regulatory authorities. With the product technology upgrading, between 2015 and 2020, the rationality of Winsun Technology's lack of relevant patent breakthroughs in the field of magnetic resistance transformers has been questioned by the exchange multiple times.

Winsun Technology stated that out of consideration for technical secrets protection, not all of its core technologies have been patented. Only some core technologies are protected by applying for patents, and the core technologies that are not suitable for patent application are included in the company's technical secrets protection scope after demonstration.

It is reported that between 2015 and 2020, Winsun Technology applied for 41 patents, including 31 patents authorized, 7 patents in substantive examination stage, and 3 rejected patents.