Huawei And Xiaomi Storage Chip Suppliers Rush To The Scientific And Technological Innovation Board. Can Pulan Share Innovate With Symantec

The core of the science and technology innovation board may add a new army.

Recently, Shanghai Stock Exchange has accepted the application of science and Technology Innovation Board of Pulan semiconductor (Shanghai) Co., Ltd. (hereinafter referred to as Pulan stock). The company's main business is the design and sales of nonvolatile memory chips. This time, the company plans to raise 345 million yuan for the research and development of flash memory chips, EEPROM chips and cutting-edge technology development.

At present, the development of "China chip" has been raised to the height of national strategy, and the capital market is more enthusiastic about relevant sectors. As another semiconductor industry target, Pulan shares is expected to be paid attention to.

From the perspective of industrial chain, Pulan is still a concept stock of Huawei and Xiaomi. The company has established cooperative relations with huiding technology, Shenzhen Tianma, ofI light, Wentai technology and other manufacturers, and the end users include Samsung, oppo, vivo, Huawei, Xiaomi and other well-known brands.

Standing in the wind of the chip industry and Huawei's concept, what is the technology content of Pulan? What are the advantages in the field of segmentation? In the future, can the above aura be realized by landing on the capital market? For investors who are keen on the concept of plate, can Pulan become the second choice besides the industry leader?

Rapid growth in performance

Specifically, the main products of Pulan include two types of nonvolatile memory chips: nor flash and EEPROM. They are general-purpose chips, which can be widely used in mobile phones, computers, network communications, home appliances, industrial control, automotive electronics, wearable devices and the Internet of things.

From the perspective of science and technology innovation attribute, Pulan shares is in line with the relevant provisions of the evaluation guidelines for the attributes of the science and technology innovation board, and conforms to the positioning of the science and technology innovation board. However, it should be noted that despite the rapid growth of the company's performance, the proportion of R & D decreased year by year: during the reporting period, the company's R & D expenses were 12.091 million yuan, 13.4579 million yuan, 31.141 million yuan and 8.5935 million yuan, accounting for 16.59%, 8.58%, 7.55% and 6.05% of revenue, respectively, which is contrary to the trend of Companies in the same industry.

In this regard, on August 12, praran explained to the reporter of the 21st century economic report that this was due to the rapid growth of revenue. "In 2018 and 2019, the company's R & D expenses increased by 4.25% and 131.4% respectively year-on-year, indicating that the R & D investment continued to grow. Over the same period, the company's operating revenue increased by 129.11% and 103.64% year-on-year, and the growth rate of revenue was significantly higher than that of R & D investment. "

Thanks to the development of the market, Pulan shares have achieved rapid growth in recent years.

From 2017 to 2019 and the first quarter of 2020, the company achieved revenue of 77.8011 million yuan, 178 million yuan, 363 million yuan and 142 million yuan, respectively, with a three-year compound growth rate of 116.00%, and a net profit of 3.7179 million yuan, 13.3737 million yuan, 32.2288 million yuan and 13.0731 million yuan respectively, and the three-year compound growth rate of net profit was 194.84%.

Specifically, the company's NOR flash business revenue has achieved explosive growth, from 44.71 million yuan in 2017 to 110 million yuan in the first quarter of this year, and the proportion also increased from 57.53% to 74.43%.

The main driving force is the surging demand of downstream markets such as TWS headset, mobile phone touch and fingerprint, AMOLED panel and security chip. According to Pran, the company's NOR flash products have advantages in terms of read-write power consumption, static power consumption, erasing speed and chip area, and are widely used in the above fields.

On the other hand, with the stock replacement of 5g mobile phones and the trend of multi camera configuration of mobile phones, the demand for camera modules and their memory chips has increased, and the shipment of EEPROM of Pulan shares has also been significantly improved.

When it comes to downstream customers, oppo, vivo, Huawei, Xiaomi, Midea and other terminal customers disclosed in the prospectus are also enough to attract investors' attention.

The company said that in terms of NOR flash business, it has established cooperative relations with huiding technology, hengxuan technology and other original manufacturers, and mobile screen manufacturers such as Shenzhen Tianma, helitech and Huaxing optoelectronics; in terms of EEPROM business, it has formed a cooperative relationship with mobile camera module manufacturers such as sunny, ofight, Samsung motor, and ODM manufacturers such as Wentai technology and Longqi technology. The products are used in the terminal products of oppo, vivo, Huawei, Xiaomi, Midea, Lenovo, HP and other well-known manufacturers. At present, the company is actively exploring overseas markets and seeking potential cooperation opportunities with other brand manufacturers.

However, in the prospectus, praran also mentioned the business risks brought by the reduction of downstream demand and the epidemic situation. According to IDC data, the global smartphone shipment volume in 2019 was 1.371 billion, down 2.3% year-on-year, the third consecutive year of decline. If the smartphone shipment continues to decline, it may lead to a decline in demand for the company's memory chips.

In view of the negative impact of the first quarter of the epidemic situation on the company's performance and control of the electronic chip market, there is no significant impact on the company's performance in the future.

Innovation in benchmarking?

From the perspective of business scale, Pulan shares also belongs to the "younger generation" in the industry.

In the EEPROM market, Juchen shares, Shanghai Beiling, etc., have the same industry, with the revenue of 513 million yuan last year; in the NOR flash market, the main manufacturers are Huabang, wanghong, Zhaoyi innovation, cypress and meguang, the above five companies occupy about 90% of the share, and the comparable listed company is Zhaoyi innovation, which achieved revenue of 3.2 billion yuan last year.

According to Pulan, the company's shipment volume of EEPROM was 636 million last year, maintaining a rapid growth trend, and its shipment volume is in the leading position among domestic manufacturers. There is still a certain gap between nor flash business scale and the top five manufacturers, but with the advantages of low power consumption and high cost performance in the small and medium-sized capacity field, the sales revenue has been steadily increased.

We might as well focus on the NOR flash business. At present, the business contributes about 70% of the company's revenue, but its gross profit margin generally shows a downward trend, from 32.43% in 2017 to 22.32%, which is lower than that of Zhaoyi innovation. As a new entrant to the market, the company said it adopted a cost-effective strategy to gain market share.

Zhaoyi innovation is a strong competitor of Pulan in NOR flash market. However, as mentioned above, the growth of downstream demand for TWS earphones and AMOLED panels makes the "cake" of the whole market bigger.

Huatai Securities research paper pointed out that the global nor flash supply and demand gap further expanded in the third quarter of last year, and Zhaoyi also began to face a very tight supply of production capacity. Before large factories gradually expand production to make up for the supply and demand gap, downstream customers will increase prices in order to ensure terminal shipment, which is expected to drive up the price of NOR flash products and maintain the high prosperity of the industry.

This brings opportunities to small and medium-sized enterprises such as Pulan shares.

There is a set of data to support. Zhaoyi innovation is one of the top five suppliers of TWS Bluetooth chip manufacturer hengxuan technology. In 2018, Pulan shares also ranked among the top five suppliers of hengxuan technology, with the corresponding sales volume of 9.2941 million yuan, second only to Zhaoyi innovation; in 2019, the purchase amount of hengxuan technology from Pulan shares increased to 18.6948 million yuan.

The reporter noted that the sales agreement signed by Pulan shares and hengxuan technology in December 2017 will expire at the end of this year. However, according to people close to the company, the cooperative relationship between the two is relatively stable.

"To a certain extent, (pro ran) can be innovative with Symantec." Nor, as long as the technology of nor is too cheap, there is no big change in the industry. The NOR flash products of planan semiconductor are more advanced in advanced process, which is worthy of recognition. "

Based on the advantages of low charge and low power consumption, ran Pu developed flash products with low power consumption and low power consumption.

According to Zhaoyi innovation annual report, the company's NOR flash product process nodes are mainly 65nm, and there are a small number of 55nm process node products. The company will achieve full-scale production of 55nm this year and increase the capacity.

"It can't be completely benchmarked. Zhaoyi innovation also has NAND flash, MCU and many other products, not just nor flash. The two are different. In terms of NOR flash products, 65nm is the mainstream technology node, each has its own advantages, and the 55nm process also has different capacity. " Analysts said.

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