Recently, the official website of the Shanghai Stock Exchange disclosed that the IPO application of Wuhan Xinxin Integrated Circuit Co., Ltd. (hereinafter referred to as "Xinxin Shares") on the Science and Technology Innovation Board was accepted, and Guotai Junan and Huayuan Securities were its joint sponsors.
This is the second company accepted by the Shanghai Stock Exchange in 2024, and the second company accepted for the Science and Technology Innovation Board IPO after the "Eight Articles on Science and Technology".
Xinxin Shares is a semiconductor specialty process wafer foundry company, and its controlling shareholder is the "memory chip brother" Yangtze Memory Technologies Holdings Co., Ltd. (hereinafter referred to as "Changkong Group"). In the past three years, the company's revenue has exceeded 3 billion, but the net profit has fluctuated greatly, especially in 2023, the net profit dropped sharply to 390 million, a sharp decline of 45%.
It is worth noting that in 2023, Xinxin Shares distributed 500 million yuan in cash dividends, which exceeded the net profit attributable to the parent company that year, accounting for 28.59% of the cumulative net profit in the past three years.
In this IPO, Xinxin Shares plans to raise 4.8 billion yuan, which is a large gap with the company's planned expansion plan of 31 billion.
As a leader in domestic semiconductor specialty process wafer foundry, Xinxin shares focuses on specialty storage, digital-analog hybrid and three-dimensional integration, and provides wafer foundry services for chip design companies with diversified technology nodes and process platforms. As a foundry company, it does not get involved in the design process, but relies on exquisite manufacturing technology to turn design blueprints into real products.
Financial data shows that Xinxin shares achieved steady revenue growth during the reporting period (2021 to the first quarter of 2024), which were 3.138 billion, 3.507 billion, 3.815 billion and 913 million yuan respectively; however, net profit fell significantly by 45% in 2023 to 394 million yuan, and 14.86 million yuan in the first quarter. It is worth noting that the company, as the leading NOR Flash manufacturer in mainland China, has mastered advanced code-based flash memory technology.
NOR Flash, with its fast reading, high reliability and in-chip execution characteristics, shines in the fields of computers, consumer electronics and automotive electronics. As of March 2024, Xinxin has two 12-inch wafer fabs, and the shipment of NOR Flash wafers exceeds 1.3 million pieces.
In terms of business structure, special storage contributes 60% to 70% of Xinxin's revenue, wafer foundry accounts for 70% of the main business, and the self-branded business accounts for about 16%. However, during the reporting period, the comprehensive gross profit margin fell from 32.1% to 16.6%, among which the decline in the gross profit margin of wafer foundry in 2023 was particularly significant.
In this regard, Xinxin pointed out that the main reasons for the sharp decline in gross profit margin were the ramp-up of production capacity, the cyclical fluctuations of the industry, the decline in capacity utilization, and the increase in the proportion of image sensor foundry with higher unit costs in the product structure adjustment.
This paper is from Ulink Media, Shenzhen, China, the organizer of IOTE EXPO (IoT Expo in China)
