Jinghua Micro IPO: "Epidemic Fortune" or difficulty continuous performance is affected by fluctuations in the cost of raw materials

Jinghuawei's performance growth rate in 2021 declined. The previous higher growth or difficulty continued, and the product structure was relatively single. In addition, Jinghuawei's suppliers are highly concentrated, with almost 80 % of the cost of raw materials, and there is a high price fluctuation risk.

On March 9, 2022, Hangzhou Jinghua Micro Electronics Co., Ltd. (hereinafter referred to as: Jinghuawei) will pass the GEM on the Shenzhen Stock Exchange. As of now, the company has submitted registration.

The prospectus shows that Jinghua's proposed public offering of shares of not exceeding 16.64 million shares, not less than 25%of the total share capital after the issuance. It is expected to raise 750 million yuan, of which 211 million yuan are used for the upgrade and industrialization project of smart health medical ASSP chip, 191 million yuan for industrial control instrument chip upgrades and industrialization projects, 175 million yuan for high -precision PGA/ADC and other simulation Signal chain chip upgrade and industrialization projects, 123 million yuan for R & D center construction projects, and 50 million yuan to supplement mobile funds.

Looking through the prospectus, it was found that the growth rate of Jinghua Micro's performance in 2021 may show a bottleneck that shows the growth of performance. The previous higher growth or difficulty continued. In addition, the high concentration of suppliers, the cost of raw materials accounted for nearly 80 % of the main business costs, etc. It also needs to attract attention. In response to the above situation, I found that the network sent an interview letter to Jinghuawei to send an interview letter to the request to explain the doubt. As of the press press, Jing Huawei did not give a reasonable explanation.

"Epidemic Fortune" or difficult to continue the product structure is relatively single

According to public information, Jinghua's main business is the research and development and sales of high -performance simulation and digital model hybrid integrated circuits. The main products include medical and health SOC chips, industrial control and instrument chips, intelligent perceive SOC chips, etc. Health, pressure measurement, industrial control, instrumentation, smart home and many other fields.

In recent years, the new crown pneumonia has been raging, but some companies have also benefited from this and issued "epidemic wealth." However, such emergencies affect the performance volatility of related companies. Taking the growth rate of Jinghua Micro's performance as an example, Wind data shows that from 2019 to 2021, Jinghuawei achieved revenue of 60 million yuan, 197 million yuan, and 173 million yuan, respectively. He-12.15%; the net profit of returning mother-in-law at the same time was 111 million yuan, 100 billion yuan, and 77 million yuan, respectively, with a year-on-year growth rate of 95.47%, 800.26%, and -22.72%. 100 million yuan, 98 million yuan and 69 million yuan, a year-on-year growth rate of 69.62%, 966.36%and -29.63%, respectively.

Source: Wind (Jinghuawei)

Industry insiders pointed out that the higher growth of Jinghua Wei in 2020 is mainly affected by the needs of new crown epidemics such as infrared temperature guns such as infrared temperature guns. The sales revenue of the company's medical and health SOC chip increased sharply, and a lot of "epidemic wealth" was issued.

In this regard, Jing Huawei also frankly said in the prospectus, "The company's 2020 performance has increased significantly. It is mainly the product demand driven by the new crown epidemic. The explosive demand of the chip terminal has fallen, and the company's infrared temperature measurement signal processing chip sales revenue is declining. "

In fact, Jinghuawei's current revenue and profits are mainly derived from the development and sales of medical and health SOC chips and industrial control and instrument chips. From 2019 to 2021, the former realized revenue of RMB 41 million, 171 million yuan, and 130 million yuan, respectively, accounting for 69.41%, 86.90%, and 69.29%of the main business revenue, respectively; E00 million yuan, 233 million yuan, and 0.50 million yuan, accounting for 26.19%, 11.85%, and 28.95%of the main business revenue, respectively. The total revenue of the two types of products accounted for more than 95%, and Jinghuawei's product structure was relatively single.

Source: prospectus (Jinghuawei)

Suppliers are more concentrated due to the fluctuation of the cost of raw materials

According to the prospectus, Jinghuawei adopts the typical Fabless business model of the integrated circuit design industry. It focuses on the research and development, design and sales of integrated circuits, and completes the processing of wafer manufacturing, testing, packaging and other manufacturing links.

From 2019 to 2021, Jinghuawei ’s procurement of the top five suppliers was 18.9816 million yuan, 64.742 million yuan, and 74.485 million yuan, respectively. The procurement accounted for 93.76%, 95.80%and 95.97%. high.

Source: prospectus (Jinghuawei)

Jing Huawei stated in the prospectus that "Because the wafer manufacturing and packaging testing industry belongs to the capital and technology -intensive industries, the investment scale is large and the threshold is high. Therefore, the industry concentration is high and the industry is universal. The suppliers have irresistible emergencies, or factors such as tight production capacity due to strong demand for the integrated circuit market, wafer foundry and packaging test capacity may not meet the company's procurement needs, which will have a large adverse effect on the company's production and operation. ","

Further, the main business cost of Jinghuawei is mainly composed of raw material costs and out -of -process processing costs. Among them, wafer procurement costs occupy the top priority. From 2019 to 2021, the cost of raw materials was 18.2072 million yuan, 43.652 million yuan, and 42.893 million yuan, respectively, accounting for 81.62%, 82.18%, and 78.81%of the main business costs. 9.3061 million yuan and 11.389 million yuan, accounting for 18.38%, 17.52%, and 20.84%of the main business costs, respectively.

Source: prospectus (Jinghuawei)

Analysts pointed out that the proportion of wafer procurement costs is nearly 80 %. Once the change will change, it will directly affect Jinghua's operating costs, which will affect gross profit margin and net profit. In addition, wafer processing has high requirements for technical level and capital scale, and the number of well -known wafer manufacturing plants worldwide is relatively small. In the future, due to the strong demand of the integrated circuit market, the procurement price and out -of -process processing price of wafers have risen significantly, and Jinghuawei failed to offset the impact of the increase in raw materials and outsourced processing prices by increasing product sales prices and sales scale. It has a great adverse effect on the company's operating performance.

(Reporter Luo Xuefeng Financial Researcher Chen Kangli)

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