htmlOn November 21, Wuxi New Jie Energy Co., Ltd. (hereinafter referred to as "New Jie Energy") submitted a prospectus, intending to raise 1.02 billion yuan.Reporter | Xi Manlin
Xinjie Energy was established in 2013. Its main business is the research, development, design and sales of semiconductor power devices such as MOSFET and IGBT, and is used in consumer electronics, automotive electronics, industrial electronics, new energy vehicles, intelligent equipment manufacturing and other fields.
was listed on the New Third Board (Xinjie Energy, 838147.OC) in September 2016. It was called the "excellent student" and "unicorn" in the domestic discrete device industry by the media, and appeared on a circulating list of Science and Technology Innovation Boards as a key target for cultivation.
As of June 30, 2018, Xinjie Energy had total assets of 540 million yuan and net assets of 430 million yuan. Its revenue from 2015 to the first half of 2018 was 310 million yuan, 420 million yuan, 500 million yuan and 360 million yuan, respectively, and its net profit attributable to shareholders was 15.07 million yuan, 36.19 million yuan, 52.28 million yuan and 81.93 million yuan, respectively.
According to the prospectus Interface News reporter, this semiconductor company has participated in many listed companies in the industrial chain and celebrity venture capital , and the upstream and downstream relationships generate procurement and sales. In the long run, the growth rate of its inventory is faster than the growth rate of industry demand, which means that the gross profit margin will be under pressure in the future. The most important point is that as a chip design company, the proportion of R&D expenses below the industry average and the R&D team with only 30 people cannot help but make investors question its future competitiveness.
listed companies and celebrity venture capital participated in and supported
Xinjie Energy was established in 2013 and was initiated by Zhu Yuanzheng and Xinchao Group invested 5.1 million yuan and 4.7 million yuan respectively. The latter was once the controlling shareholder of Changdian Technology. In 2015 and 2017, Xinchao Group transferred its shares to Shanghai Beiling (600171.SH) and three venture capital companies , successfully exited.
At present, Zhu Yuanzheng, the company's controlling shareholder and actual controller, directly holds 31.11% of the company's equity, and the proportion of equity that can be controlled through joint actions is 35.62%. In addition, there are many celebrity venture capital companies on the list of shareholders: Dachen Venture Capital holds 8.7% of the shares, the second largest shareholder, Shanghai Beiling holds 7.91% of the shares, the third largest shareholder, and Guolian Venture Capital, the fourth largest shareholder, with 5.53% of the shares, behind it is the Wuxi Municipal Government.
In addition to equity, at the specific business level, the products sold by the company can be divided into chips and packaging finished products according to whether they are packaged: the chips are mainly designed by the company and handed over to the foundry company for production, and the packaging finished products are mainly composed of the company entrusted external packaging and testing of the chips.
According to the prospectus, there are three links in chip production: design-foundry-packaging. Xinjie Energy is only responsible for design, and the other two are outsourcing. Because of the vertical characteristics of semiconductor production, Xinjie Energy has produced complex related transactions. From 2015 to 2017, the related parties that had related transactions with Xinjie Energy were Changdian Technology (600584.SH), Shanghai Beiling, Cansheng Industrial, and Hongguang Co., Ltd. (831034.OC, with Dachen Venture Capital invested in), among which Xinchao Group was the former controlling shareholder of Changdian Technology.
In terms of sales, before 2018, half of the top five customers were affiliated parties. From 2015 to 2018, Changdian Technology was the largest customer of Xinjie Energy. Among the four new customers added in the first half of 2018, they were all small and micro enterprises. Three of them could find their relationship with Xinjie Energy through public information, and had many connections with Xinjie Energy's shareholder Dachen Venture Capital.
In terms of procurement, according to the prospectus, chip foundry and packaging and testing services are the main procurement content of the company, accounting for a large proportion of product costs. Chip foundry is purchased from Huahong Hongli (affiliated party Huahong Semiconductor, 1347.HK), China Resources Shanghua , SMIC Integration (affiliated party SMIC , 0981.HK), etc., and packaging and testing is purchased from Changdian Technology, Amkor, Tongfu Microelectronics (002156.SZ) and other products.
OEM procurement is the largest production cost in the company. From 2015 to 2018, Huahong Hongli has always been the largest supplier, accounting for as much as 60-80% of the purchase amount, and the purchase amount is in the range of 200 million to 300 million, of which the part converted into production costs (sales volume * unit price) accounts for about 40% of the company's total operating costs.
This means that the future fluctuations in OEM prices and packaging and testing service prices will have a certain impact on the company's operating performance.
Worrying sales and gross profit margin
According to the prospectus, the main business revenue of enterprises above the scale of the discrete device industry accounts for 22%-25% of the main business revenue of enterprises above the scale of the semiconductor industry. In 2017, the market size of my country's semiconductor discrete device market reached 247.39 billion yuan.
Currently, domestic companies involved in the field of semiconductor discrete devices mainly include Weil Co., Ltd. (603501.SH), Taiji Co., Ltd. (300046.SZ), Huawei Electronics (600360.SH), Fuman Electronics (300671.SZ) and Yangjie Technology (300373.SZ).
From the current performance, from 2015 to January-June 2018, the company's comprehensive gross profit margin was 16.54%, 18.90%, 24.69% and 33.67% respectively, and the improvement of gross profit margin is far better than the industry average.
But in the long run, the semiconductor discrete device industry in which Xinjie Energy is located is closely related to the overall development of the macro economy. The main downstream application areas of Xinjie Energy are consumer electronics, automotive electronics, etc. Affected by overall macroeconomic fluctuations, the slowdown in sales growth in these industries will inevitably affect the sales of upstream power semiconductor devices.
China Semiconductor Industry Association also predicts that the sales growth rate of China's power semiconductor devices will gradually decline in the future, falling to less than 8%. The gradually saturated market will put pressure on the company's inventory and thus affect the company's performance.
From 2015 to January-June 2018, the company's net inventory was RMB 41.08 million, RMB 47.23 million, RMB 53.21 million and RMB 69.39 million, respectively, with growth rates of 15%, 13%, and 30%, respectively. The inventory growth rate was relatively fast, higher than the demand growth rate of the above industries; while the inventory turnover rate was 7.62, 7.48, 7.12, and 3.76, respectively, declining year by year; and since 2017, the product production and sales rate has declined, and the output and sales volume have gradually shrunk.
In the future, when downstream consumption slows down, the company's current high inventory will face depreciation. As the price decreases under competitive pressure, the company's gross profit margin will be under pressure.
The same is true from the industry perspective: Yangjie Technology, Silan Micro, Huawei Electronics, Weier Co., Ltd., etc. have all experienced rising inventory and downward inventory turnover. These companies will have to withstand the test of declining industry growth. In addition, considering that Xinjie Energy does not have absolute advantages in R&D, its operating difficulties are even more arduous.
real and fake high-tech enterprises?
company wrote in its prospectus: As the domestic demand for semiconductor discrete devices rapidly expands, market competition is becoming increasingly fierce. If the company cannot continue to upgrade technology, improve product performance, reduce product costs, and optimize marketing networks, it is likely to lose its advantage in future market competition.
Semiconductor discrete device industry is a technology-intensive industry, with fast updates and replacement of technologies and products. Xinjie Energy focuses on chip design, and requires more R&D investment and technical strength to keep up with the upgrading of industry technology and avoid the risk of product replacement.
But judging from the prospectus, this "high-tech" enterprise does not spend much on R&D expenditure.
From 2015 to the first half of 2018, Xinjie Energy's R&D expenses were RMB 12.47 million, RMB 21.04 million, RMB 21.61 million and RMB 12 million, accounting for only about 4% of its revenue.
On the one hand, the above ratio is lower than that of domestic peers. Silan Micro (600460.SH), which is also engaged in power semiconductor design, has a R&D expense accounting for more than 10% of the company's revenue, while Sanan Optoelectronics (600703.SH) exceeds 10%; even compared with Yangjie Technology and Huawei Electronics, which are in the same sub-sector, the R&D expense accounting for a relatively low proportion of Xinjie Energy's R&D expenses.
On the other hand, from the perspective of the company's own organizational structure, the R&D department is not valued: among the 91 employees, there were 28 R&D personnel, which was less than the number of management personnel; in addition, between 2015 and 2018, R&D expenses were once lower than the proportion of management expenses.
As a semiconductor design company, it is light in assets and focuses on R&D. The proportion of R&D expenses determines the long-term competitive advantage. Qualcomm, a well-known semiconductor design company, has created a unique competitive advantage with its R&D expense ratio of more than 25%. How can Xinjie go against the current in the future?
(Note: All pictures in the article are from the company's prospectus)
