Red Weekly | Chen Wen
On January 10, 2022, Shaanxi Yuanjie Semiconductor Technology Co., Ltd. (hereinafter referred to as "Yuanjie Technology") disclosed a prospectus and applied for listing on the Science and Technology Innovation Board. It plans to issue no more than 15 million shares and is recommended. The institution is Guotai Junan Securities.
It is reported that Yuanjie Technology is a company focusing on the optical chip industry. Its main business is the research and development, design, production and sales of optical chips. Its main products include 2.5G, 10G, 25G and higher rate laser chip series products, etc. , currently mainly used in optical fiber access, 4G/5G mobile communication networks and data centers and other fields. After reviewing its prospectus,
reporters found that the company still has some problems. Yuanjie Technology's performance fluctuated greatly during the reporting period, and whether its future performance can continue to grow is worrying. In addition, there are also doubts about the price of the company's multiple equity transfers and capital increases.
The sustainability of performance growth is worrying
From 2018 to the first half of 2021, Yuanjie Technology’s total operating income was 70.4111 million yuan, 81.3123 million yuan, 233.3749 million yuan and 87.5134 million yuan respectively. The net profits attributable to the parent after deducting non-profit items were respectively. 15.3714 million yuan, 9.0164 million yuan, 101.7620 million yuan and 28.5275 million yuan. Among them, in 2019 and 2020, the year-on-year growth rates of operating income were 15.48% and 187.01% respectively, and the year-on-year growth rates of net profit attributable to the parent after deducting non-profit items were -41.34% and 1028.63% respectively. The company's performance fluctuates greatly.
Judging from the data, the company's performance in 2020 achieved rapid growth, and Yuanjie Technology's operating income and profits grew rapidly that year, mainly due to the growth in revenue from the 25G laser chip series products.
Yuanjie Technology’s main products include 2.5G, 10G and 25G laser chip series products. Among them, the revenue of the 25G laser chip series products during the reporting period was 00,000 yuan, 686,200 yuan, 100,567,400 yuan and 12,057,800 yuan respectively, accounting for The proportions of main operating income in each period were 0, 0.84%, 43.09% and 13.78% respectively.
It is not difficult to see from the above data that its 25G laser chip series products performed particularly well in 2020. The revenue that year increased by nearly 100 million compared with the previous year, and its total revenue that year was only 233 million yuan. At that time, 25G laser chip products exploded rapidly in the short term, mainly because my country's 5G base stations entered the large-scale deployment stage in 2020, and the number of base stations increased significantly, which led to an increase in demand for 25G laser chips. Benefiting from this, Yuanjie Technology's 25G laser chips Sales revenue of series products increased significantly. You must know that in 2019, the sales number of such products was only 12,400, but in 2020 it suddenly increased to 2.2916 million. The sudden increase in sales of
is undoubtedly a major benefit for enterprises. However, the real question is, how long can such crazy growth last? In fact, Yuanjie Technology's data for the first half of 2021 has given the answer. In the first half of 2021, the construction of 5G base stations has slowed down, and the shipments of Yuanjie Technology's laser chip products used in the 5G mobile communication market have decreased rapidly compared with the previous year. , data shows that its 25G laser chip sales are only 517,100 units, less than a quarter of 2020.
Corresponding to the performance, in the first half of 2021, Yuanjie Technology's operating income was 87.5134 million yuan, and the net profit after non-attributed profits was 28.5275 million yuan. In 2020, Yuanjie Technology's operating income was 233.3749 million yuan, approximately 2.7 times the revenue in the first half of 2021; the net profit after deducting non-attributed profits was 101.762 million yuan, approximately 3.6 times the profit in the first half of 2021. Since Yuanjie Technology's products do not have seasonal characteristics, the company's performance has obviously declined.
In fact, it can be seen from the revenue and non-attributable net profit that the company's gross profit margin has also declined a lot. In 2020, Yuanjie Technology's comprehensive gross profit margin was 68.15%, but the comprehensive gross profit margin in the first half of 2021 fell to 58.20%, a decrease of 9.95% from the previous period. In this regard, the company stated that in the first half of 2021, 5G construction slowed down, and the shipment volume and price of 25G laser chip series products declined, resulting in changes in the company's product structure and a drop in gross profit margin of nearly 10%.
As the upstream of the optical communications industry chain, Yuanjie Technology is susceptible to changes in demand in the downstream telecommunications market and data center market.If future downstream market demand is less than expected, or the company fails to launch products that adapt to the market in a timely manner, the company's operating performance may fluctuate, and the risks cannot be ignored.
Yuanjie Technology's downstream market demand changes relatively quickly, and its product iteration speed is also very fast. Timely compliance with market demand, continuous development and launch of new products are the basis for its sustainable development. However, from a research and development perspective, Yuanjie Technology Technology does not seem to pay enough attention to this aspect.
During the reporting period, Yuanjie Technology’s R&D expense rates for each period were 10.66%, 14.29%, 6.73% and 9.23% respectively, while MACOM, Lianya Optoelectronics, New Optoelectronics, Shijia Photonics and Changguanghua were selected in its prospectus The average R&D expense rates of the five comparable companies in the same industry of Xinxin during the same period were 20.52%, 21.45%, 16.48% and 13.73% respectively. Obviously, there is a big gap between the R&D expense rate of Yuanjie Technology and companies in the same industry.
From the perspective of revenue scale, except for Yuanjie Technology’s revenue of more than 200 million yuan in 2020, it is only tens of millions of yuan in other years. According to the R&D expense rate, its R&D investment is not high. The company is small in scale and lacks the support of R&D investment. The company's future sustainable development is inevitably worrying.
Equity transaction price is full of doubts
On October 9, 2018, Ningbo Chuangze Cloud signed an investment agreement with Yuanjie Technology and all shareholders, stipulating that Ningbo Chuangze Cloud would transfer 7.5% of Gazelle Venture Capital's equity at a price of 30 million yuan; Ningbo Chuangzeyun invested 11.25 million yuan to subscribe for Yuanjie Technology’s new registered capital of 623,773 yuan. It is worth noting that the transaction was obviously at the same time point. The equity transfer price was 16.44 yuan/registered capital, but the capital increase price was 18.04 yuan/registered capital. The equity transfer price was significantly lower than the capital increase price, even though the capital increase made the valuation slightly higher. There has been an improvement, but the price gap is still quite large.
Later, on March 16, 2019, Hanking Xicheng used a loan principal of 12 million yuan to subscribe for Yuanjie Technology’s new registered capital of 639,768 yuan. The price of this capital increase was 18.76 yuan/registered capital. On the same day, Gazelle Venture Capital signed an "Equity Transfer Agreement" with Jiaxing Jingze and Best Electronics, Zhang Xinying, Qin Weixing, Qin Yansheng and Hanjing Xicheng signed an "Equity Transfer Agreement", and Zhang Xinying signed an "Equity Transfer Agreement" with Chengdu Ruiyang and Best Electronics The "Equity Transfer Agreement" was signed to transfer the relevant equity of Yuanjie Technology. The transfer price was 16.44 yuan/registered capital, which was not only far lower than the 18.76 yuan/registered capital this time, but also lower than the capital increase on October 9, 2018. price.
So, why are there frequent inconsistencies between the capital increase price and the equity transfer price? How is a company's valuation calculated? This is very puzzling.
However, the company gave an explanation for the next equity transfer. On May 15, 2020, Gazelle Goldstone signed an "Equity Transfer Agreement" with SDIC Venture Capital, with a transfer price of 52.10 yuan/registered capital; Zhang Xinying signed an "Equity Transfer Agreement" with Gongda Kechuang, Vision Yicheng and Leading Optoelectronics respectively. , the transfer price is 39.08 yuan/registered capital.
Regarding the difference in the equity transfer price, Yuanjie Technology explained in the prospectus that "there is a difference in the equity transfer price. The main reason is that the equity transfer price is determined by shareholders through negotiation. SDIC Venture Capital and Gazelle Jinshi negotiated the stock transfer later than other shareholders, and the equity transfer was carried out in the same batch, and the transfer price was different. "
However, there are doubts about Yuanjie Technology's above explanation. The company's explanation is that "the stock transfer matters were discussed later than other shareholders", but there is no definite concept of time. How long was the gap between the two? Due to the large gap between the equity transfer price of "52.10 yuan/registered capital" and "39.08 yuan/registered capital", if the difference between the two is a short period of time, it indicates that the company's valuation has increased sharply in the short term. In this case, its valuation has increased. I'm afraid the company needs to explain clearly the reasons, otherwise the possibility of "driving up" the valuation cannot be ruled out. If the time between the two transaction negotiations is long, then the rationality of executing at the original price negotiated a long time ago is also questionable when the company's fundamentals and valuation have changed greatly.
In addition, on September 23, 2020, Hubble Investment, China Development Bank Fund, CDB Science and Technology signed the "Equity Transfer Agreement" with Zhao Chunhui, Ruiheng Chuangying, Gazelle Jinshi, and Ningbo Chuangzeyun. Both parties The transaction price is 62.40 yuan/registered capital. At the same time, Hubble Investment, China Development Bank Fund, China Development Bank Science and Technology, Xinxin Juyuan, Yuanjie Technology and all shareholders signed an "Investment Agreement" to increase the company's registered capital from 28,846,411 yuan to 30,048,345 yuan, of which , the capital increase price of Hubble Investment and CDB Fund is 66.56 yuan/registered capital, and the capital increase price of Xinxin Juyuan is 22.19 yuan/registered capital. There is also a big difference in price.
From the overall timeline, on October 9, 2018, the capital increase price of Yuanjie Technology was 18.04 yuan/registered capital; on March 16, 2019, the capital increase price was 18.76 yuan/registered capital; on May 15, 2020 , the capital increase price is 52.75 yuan/registered capital; on September 23, 2020, the highest capital increase price is 66.56 yuan/registered capital. From 2019 to 2020, in just over a year, Yuanjie Technology introduced a large amount of capital, and the overall valuation also increased dramatically. More importantly, even with this transaction, the price was very different, which is very strange.
It is worth mentioning that the company stated in the prospectus that "the issuer has historically signed relevant agreements with shareholders involving special rights arrangements." And the above-mentioned situation of different transaction prices at the same time point was due to the involvement of "special rights." The company did not give a detailed explanation as a result of the "special rights arrangement". Therefore, the company needs to make more detailed disclosures about the specific circumstances of the company's "special rights arrangement" and the specific reasons for the occurrence of different transaction prices at the same transaction time.
Abnormal revenue data
It is worth mentioning that there seems to be anomalies in Yuanjie Technology’s operating income data.
We know that the company's annual operating cash inflow amount and the amount of new operating claims that year should theoretically be equivalent to its operating income including value-added tax. However, there are doubts about the relevant data for 2021 disclosed by Yuanjie Technology.
In terms of cash flow, in the first half of 2021, the company's "cash received from selling goods and providing services" was 92.3955 million yuan (see the attached table for details). After excluding the impact of changes caused by new advances in accounts received and contract liabilities, Yuanjie Technology's operating-related cash inflow in the first half of 2021 should be 92.2015 million yuan.
In terms of operating claims, the total amounts of Yuanjie Technology’s notes receivable, accounts receivable (including bad debt provisions), receivables financing, and contract assets in 2020 and the first half of 2021 were 69.2297 million yuan and 59.9042 million yuan respectively. Yuan, it can be seen that the company's operating claims in the first half of 2021 decreased by 9.3255 million yuan in total.
Attached picture: Financial data related to revenue
Data source: Prospectus (unit: 10,000 yuan)
Based on the amount of operating cash inflows and changes in creditor's rights of Yuanjie Technology, its tax-included revenue in the first half of 2021 The theoretical value should be 82.876 million yuan, so what is the actual situation?
In the first half of 2021, the main business income shown on the balance sheet of Yuanjie Technology was 87.5134 million yuan, which was 4.6374 million yuan more than the aforementioned theoretical value. Moreover, this is the result without considering the value-added tax. If the value-added tax is included, the tax-included income will be higher, which means that the tax-included income will be much higher than the aforementioned theoretical value.
According to the prospectus, the applicable value-added tax rates for Yuanjie Technology are 6%, 13%, 16%, and 17%. If all are calculated according to the lowest tax rate of 6%, Yuanjie Technology’s tax-included domestic income in the first half of 2021 should be It is 92.4486 million yuan, plus the current overseas income of 297,700 yuan, the total tax-included operating income is 92.7463 million yuan, which is 9.8703 million yuan more than the aforementioned theoretical value. Since there are products with higher VAT rates, the actual difference will be larger.
Obviously, Yuanjie Technology’s operating income data in the first half of 2021 is not supported by operating cash flow and related debt data. This strange phenomenon requires further explanation from the company.
(The individual stocks mentioned in the article are only examples and analysis, not trading recommendations.)
