Nanjing Jingsheng Equipment Co., Ltd. (hereinafter referred to as "Company" or "Jingsheng Equipment") plans to apply for listing on Science and Technology Innovation Board . The sponsor is Huatai United and the accountant is Rong Cheng. It is planned to issue no more than 34.59 million shares, and the total amount of funds to be raised shall not exceed 476 million yuan. Among them, 274 million yuan was invested in the headquarters production and R&D center construction project, and 202 million yuan was invested in the construction project of the semiconductor crystal growth equipment assembly and testing plant.
is a semiconductor special equipment supplier, mainly engaged in the research, development, production and sales of crystal growth equipment. In 2021, the sales revenue of silicon carbide single crystal furnace was RMB 124.36 million, accounting for 63.81% of the company's operating income that year, and the sales revenue of semiconductor -level monocrystalline silicon furnace was RMB 49.14 million, accounting for 25.21%.
As the conflict between Russia and Ukraine broke out in early 2022 and the Fed's interest rate hike cycle began, the semiconductor industry where the company is located was under pressure for a long time. According to the China Semiconductor Chip Index, it has fallen from the highest point of 11,431.26 points in January 2022 to the lowest point of 6678.09 in April, with a maximum drop of 41.58%. As of now, there has been a rebound, and the index is at 8034.92, but Fed will continue to raise interest rates by at least 2023, and the average interest rate will reach 4%. Whether the semiconductor index will stop falling and rebound remains to be seen. As for how the company develops in this general environment, let us analyze it carefully as follows.
1. Operating income is heavily dependent on the top five customers
Prospectus shows that from 2019 to 2021 (hereinafter referred to as the "reporting period"), the sales revenue of the top five customers of Jingsheng Equipment accounted for 97.21%, 94.27% and 95.44% respectively. San'an Optoelectronics and Shanghai Xinsheng have both appeared among the company's top five customers for three consecutive years. It can be seen that the company has a serious dependence on the top five customers, and its sales share to the top five customers has remained stable at around 96% for three consecutive years, which also reflects that the audience of the company's products is very narrow. If new products cannot be continuously developed and developed, there will be bottlenecks and ceilings for the company's future development.
In order to bind customers and achieve performance, when the company issued additional funds in September 2021, it introduced strategic investors such as Shanghai Silicon Industry, China Micro Company , and Lion Micro, among which Shanghai Silicon Industry, Shanghai Xinsheng, and Lion Micro, the wholly-owned subsidiary of Shanghai Silicon Industry, and Jin Ruihong, the holding subsidiary of Lion Micro, are the top five customers of the company. Shanghai Silicon Industry, Lion Micro, and China Micro, each hold 0.9029% of the equity of Jingsheng Equipment.
According to the full details of the semiconductor-grade single-crystal silicon furnace sold by the company during the reporting period, sales in 2019 were zero. In 2020 and 2021, 4 units were sold respectively, that is, during the reporting period, the company sold a total of 8 semiconductor-grade monocrystalline silicon furnaces, of which 7 were sold to strategic shareholders, namely Shanghai Silicon Industry and Lianwei, and sold 5 and 2 units respectively, with an amount of RMB 67.03 million and RMB 35.83 million respectively, accounting for 56.12% and 30.00% of the total sales amount of the product during the reporting period, respectively, and a total of 86.12%. In terms of sales prices, taking 2020 as an example, if the models are the same, the sales price for Shanghai Xinsheng is the highest, at 17.6 million yuan per unit, followed by Shengong Co., Ltd., at 16.58 million yuan per unit, and Jinruihong is the lowest, at 15.14 million yuan per unit. In 2020, the average sales price per unit was 16.11 million yuan, and the average sales unit price in 2021 was 13.75 million yuan, a year-on-year sales unit price decreased by 14.66%.
The above data reflects the following problems: First, the sales of silicon carbide single crystal furnace, one of the company's main products, is so small. During the reporting period, only 8 units were sold, namely 4 units each in 2020 and 2021. I did not see the trend happening. Can it continue? Second, strategic investors purchase 7 units, accounting for 87.5%. Does it constitute a transfer of interests? Third, the unit sales price in the downward trend will inevitably lead to a decline in gross profit margin; fourth, since there is no specific model and configuration, it is impossible to compare the differences between the sales unit sales price of related parties, namely Shanghai Silicon Industry and Lianwei and the third party, namely Shengong Co., Ltd., and the company needs to disclose the specific model.
2. At the beginning of its establishment, Jingneng Semiconductor cooperated with Shanghai Xinsheng and signed a contract
Nanjing Jingneng Semiconductor Technology Co., Ltd. (hereinafter referred to as "Jingneng Semiconductor") was established in March 2015. It is mainly engaged in the research, development, production and sales of semiconductor-grade single crystal silicon furnaces.Shareholders are as follows:
Li Hui is the actual controller of Jingsheng Equipment, and Haige Technology is Li Hui's joint actor. Therefore, Li Hui controls a total of 51% of Jingneng Semiconductor's equity. Jingsheng Equipment reorganized 85% and 15% of Jingneng Semiconductor's equity in December 2018 and January 2020, respectively, and eventually turned Jingneng Semiconductor into its wholly-owned subsidiary. The month after the establishment of
Jingneng Semiconductor signed a sales contract (Device No. 1) with Shanghai Xinsheng. In March 2017, Jingneng Semiconductor signed a batch contract with Shanghai Xinsheng (Electrical No. 2 and Electrical No. 3), and Electrical No. 2 was accepted in July 2018. The No. 1 machine was finalized in 2019 and was accepted in November 2021; according to the sales of our aforementioned company to Shanghai Xinsheng, the No. 1 machine should be a semiconductor-grade monocrystalline silicon furnace delivered and recorded in revenue from Crystalline Semiconductor to Shanghai Xinsheng in 2021; the No. 2 machine achieved revenue in 2018 but before the company merged Crystalline Semiconductor; the No. 3 machine achieved revenue in 2020.
The actual operating income of Jingneng Semiconductor in 2019-2021 was RMB 840,000, RMB 64.46 million and RMB 57.14 million respectively; the revenue of semiconductor-grade monocrystalline silicon furnaces in the company's main business revenue was RMB 0, RMB 60.45 million and RMB 49.14 million respectively; the difference between the two was RMB 840,000, RMB 4.01 million and RMB 8 million respectively, which were the supporting products and technical service fees collected by Jingneng Semiconductor. However, the audit report shows that the total supporting products and technical service fees of Jingsheng Equipment during the reporting period were RMB 8.48 million, RMB 8.18 million and RMB 3.42 million. The supporting products and technical service fees collected by Hejingneng Semiconductor are 7.64 million, RMB 4.17 million and -4.58 million respectively. There is no problem in 2019 and 2020. However, if the supporting products and technical service fees merged in 2021 are lower than those of the wholly-owned subsidiary, it means that there are omissions in the company's financial accounting, and there is a data disorder between the company's prospectus and the regulatory letter, reflecting that the company's internal control is not rigorous enough.
3. Operating net cash flow continues to be deficient compared to net profit
Jingsheng Equipment's net flow of operating activities was -25.65 million yuan, 13.71 million yuan and -11.51 million yuan respectively, while net profit was -11.59 million yuan, 34.82 million yuan and 46.52 million yuan respectively. The cash deficit caused by operating activities was 14.06 million yuan, 21.11 million yuan and 58.03 million yuan respectively. It can be seen that the company's profit has increased periodically, especially in 2020, it turned losses into profits, but the cash flow deficit caused by operating activities is still growing, until 2021, reaching 58.03 million yuan, giving people the impression that the more money the company makes, the greater the net deficit of operating activities is. During the reporting period, the total net deficit in operating activities was RMB 93.2 million, an increase of 23.45 million yuan compared with the total net profit achieved in the reporting period. The main reason for the deficit of
is that accounts receivable, contract assets and inventory increase period by period. At the end of 2020, the sum of accounts receivable and contract assets balances increased by 17.16 million yuan year-on-year. At the end of the period of 2021, the balance of accounts receivable and contract assets increased by 15.91 million yuan year-on-year, and the inventory balance increased by 40.02 million yuan. The total increase of the two is 55.93 million yuan, which is almost the same as the net cash flow deficit of operating activities in the current period. It can be seen that the main reason for the company's net deficit of operating activities is the period-by-term increase of the balance of at the end of these three accounts.
4. The sustainability and innovation of technology are doubtful
Jingsheng Equipment focuses on the semiconductor field and provides customized crystal growth equipment such as semiconductor-grade single crystal silicon furnaces, silicon carbide single crystal furnaces and sapphire single crystal furnaces to semiconductor material manufacturers and other material customers. So far, the company has been authorized 25 domestic invention patents, including 9 invention patents related to semiconductor-grade crystal growth equipment and 13 invention patents related to sapphire single crystal furnaces. During the reporting period, the company's sales revenue of sapphire single crystal furnace was RMB 14.53 million, RMB 1.46 million and 0, respectively, accounting for 63.83%, 1.19% and 0, respectively. The sales revenue of sapphire single crystal furnace was rapidly declining periodically, and it was not sold again in 2021. Can it be inferred that the market prospects of the company's sapphire single crystal furnace face challenges, and invention patents that once occupied more than half of the company's territory will be useless.
The main comparable domestic companies in the field of semiconductor-grade crystal growth equipment are Jingsheng Mechanical and Liancheng CNC. As of December 31, 2021, Jingsheng Mechanical and Electrical had 66 invention patents and Liancheng CNC had 12.After deducting invention patents related to sapphire single crystal furnaces, Jingsheng Equipment has no advantage in invention patents compared with the above-mentioned similar industries.
The relevant technology of sapphire single crystal furnace actually comes from Li Ronglin, the father of the company's actual controller Li Hui. In May 2012 and October 2012, Li Hui invested in the company with "advanced polycrystal furnace and LED sapphire furnace design" and "new large-size sapphire single crystal furnace long crystal heating system" non-patent technology , with the evaluation price of 7.5 million yuan and 2.85 million yuan respectively. The non-patent technology used by Li Hui to contribute came from the free gift from his father Li Ronglin. Li Ronglin originally worked at , the China Institute of Engineering Physics, and retired in 2002.
The core patent technology inventor of another heavyweight product of the company, namely the 12-inch semiconductor-grade single crystal silicon furnace, is Pan Qingyue, the spouse of Li Hui's sister. He holds 91.90% of the equity of Haiger Technology and indirectly holds 5.67% of the company's equity through Haiger Technology. From May 2007 to February 2011, Pan Qingyue worked in the KAYEX single crystal furnace business department of the United States SPX (SPXC.N) and served as the head of the R&D department; from March 2011 to April 2013, he worked at Worcester Institute of Technology in the United States; from May 2013, he served as the head of the company's R&D department. Pan Qingyue is a US nationality and has the permanent residence rights of the United States .
The company's initial technology comes from the father of the actual controller, and the most advanced technology comes from the spouse of the close relatives of the actual controller. This family-style technological inheritance is certainly stable, but is it sustainable? Does sapphire single crystal furnace technology come from a professional invention? In addition, as the head of the company's R&D center, if Pan Qingyue, as the intensified technological dispute between China and the United States, may the company's sustainable development face immeasurable impact?
This article comes from the financial industry
