The Main Products Are Deeply Involved In The Price War, And It'S Hard To Cover Up The Large Fund'S Support. Why Did Zhongkeyi Fail In The Scientific And Technological Innovation Board?

On the evening of May 17, the official website of Shanghai Stock Exchange announced that the IPO audit status of Shenyang Scientific Instrument Co., Ltd. (hereinafter referred to as "zhongkeyi") was updated to "terminated".

Zhongkeyi (830852. OC) is an enterprise specializing in the development and production of vacuum instrument equipment and vacuum acquisition equipment, and serves the integrated circuit industry and scientific research field. It is still listed on the new third board. Previously, on May 12, zhongkeyi announced that after comprehensive consideration of the company, it decided to adjust its listing plan, and planned to withdraw its IPO application on the science and technology innovation board, and it would choose an opportunity to start its listing plan.

For the reasons for the adjustment of the listing plan, zhongkeyi did not have more public explanations. On May 26, a person from the Secretary Office of the director of China Science and Technology Instrument Co., Ltd. told the reporter of the 21st century economic report that "the specific details of restarting the listing, which plate and when to go on the stock market have not been determined yet. It depends on the company's subsequent operating conditions and financial indicators."

Zhongkeyi's industry is one of the most concerned areas of capital. Its production of vacuum instruments and equipment belongs to the semiconductor equipment industry, which is considered to be one of the most easily "stuck" links in the domestic semiconductor industry. In 2019, various restrictive policies of the United States on China's semiconductor industry have attracted much attention for a time. At the end of that year, China Science & Technology Instrument Co., Ltd. (hereinafter referred to as "national large fund") acquired shares.

With the support of the theme sentiment of the capital market and the escort of the national large fund, why did zhongkeyi choose to withdraw its listing plan on its own initiative?

Domestic alternative core target

The investment trend of national large fund has been regarded as a wind vane by the market, representing the most cutting-edge development direction of integrated circuit. According to the information disclosed in the first quarter of this year, the big fund also holds 17 shares. In addition to 16 companies listed in Shanghai and Shenzhen stock markets, there is only one new third board company, namely, zhongkeyi.

This shows the special position of zhongkeyi in the industry. According to the public information, in November 2019, the state-owned large fund acquired shares by participating in the fixed increase of China Science and technology instrument. The national large fund subscribed 33.8983 million shares with 140 million yuan, becoming the second largest shareholder of China Science and technology instrument. Up to now, the shareholding ratio is as high as 19.73%.

The time point of the big fund's equity investment is the establishment node of the second phase fund, and the second phase fund will focus on the investment in the fields of the urgent shortage of funds in the upstream of integrated circuits, the manufacturing and OEM of "choked neck" and equipment, which is in line with the industry of China Science and Technology Instrument Co., Ltd.

In the prospectus, zhongkeyi said that it was the only company in China that could develop and produce dry-type vacuum pump to meet the requirements of IC manufacturing. The product has passed the process validation and batch application in SMIC international, Changjiang storage, Shanghai Huali and North Huachuang, breaking the long-term monopoly of similar products by European and American enterprises and Japanese enterprises, It realizes the independent control of important equipment in the field of integrated circuit.

In the current global lack of core background, the development of zhongkeyi has more imagination space. At present, domestic wafer plant capacity continues to expand. The market believes that this is a huge opportunity for upstream semiconductor equipment.

In addition to the development space supported by the national large fund and the replacement of domestic products, the "pedigree" of the Chinese Academy of Sciences also brings its own aura.

Guokeyi is the controlling shareholder of zhongkeyi, with a shareholding ratio of 35.21%. It is a wholly-owned subsidiary of Chinese Academy of Sciences Holding Co., Ltd. In the science and technology innovation board, at present, Cambrian and GuoDun quantum have been listed on the stock market, and have obtained fund supporters. If zhongkeyi is successfully listed, the "blood lineage" of the Chinese Academy of Sciences is expected to add a lot of color to it.

In fact, after the news of zhongkeyi's listing came out, the new third board stock price has already reacted. Its IPO on the science and technology innovation board was accepted on December 28, 2020. Within 10 days before that, the company's share price began to take off, jumping from the low of 16.26 yuan / share to 24.2 yuan / share, and then entered the suspension period.

When applying for the science and technology innovation board, the standards adopted by zhongkeyi are mainly related to the market value and revenue indicators: "the market value is expected to be no less than 3 billion yuan, and the operating income in the latest year is not less than 300 million yuan."

On January 22, 2021, the IPO of China Science and technology innovation board was shown as "inquired". On March 31, the audit was suspended due to the overdue financial information. However, on May 17, zhongkeyi voluntarily withdrew the application, and the audit status was updated to terminate.

On May 19, zhongkeyi resumed trading in the new third board. Affected by the news of IPO termination, its share price has declined more than once. The latest share price was only 10.7 yuan per share, down more than half of its peak.

The loss is increasing behind the increase of income

From the above situation, the listing of zhongkeyi seems to have occupied the best time, place and people, but why did it choose to terminate?

In fact, the prospectus shows that although there are many halos around it, the actual competitiveness and sustainable operation ability of zhongkeyi in the industry are facing challenges, and these contents are focused on in the inquiry.

Compared with other semiconductor equipment enterprises, the R & D expenditure of zhongkeyi is not prominent.

From 2017 to the first half of 2020, the R & D expenses of zhongkeyi were 17.3795 million yuan, 22.8092 million yuan, 39.3475 million yuan and 20.3223 million yuan respectively, accounting for 11.54%, 10.42%, 12.46% and 13.03% of the revenue of each period. In 2020, the average R & D ratio of 25 semiconductor equipment enterprises in Kechuang board is 21%, and the median is 14%.

Compared with R & D investment, the deteriorating financial situation of zhongkeyi is more concerned. In terms of scale, the volume of zhongkeyi is not large. From 2017 to the first half of 2020, the operating revenue of zhongkeyi was 151 million yuan, 219 million yuan, 316 million yuan and 156 million yuan, with rapid growth in revenue. However, the corresponding net profit level continued to decline, which were 2.2472 million yuan, 9.4911 million yuan, - 24.4319 million yuan and - 31.6048 million yuan, respectively. A close look at the sub items shows that the company's net profit actually mainly depends on the government subsidies. From 2017 to the first half of 2020, the company's non net profits were respectively - 21.5173 million yuan, - 13.6224 million yuan, - 62.96 million yuan and - 37.0668 million yuan, showing a situation of increasing net profit loss after non deduction.

From the perspective of financial sub data, inventory falling price and bad debt receivable are the "profit black hole" of zhongkeyi. These financial indicators actually reflect the weak competitiveness of zhongkeyi products, which leads to the disadvantage in market competition and downstream customer relationship.

At the end of each report period, the amount of inventory falling price reserves of China Science & Technology Instrument Co., Ltd. rose sharply, reaching 34.672 million yuan, 38.36 million yuan, 47.6218 million yuan and 63.7596 million yuan, which were much higher than the current R & D expenses.

In terms of the balance of accounts receivable, zhongkeyi at the end of each period was 51.6336 million yuan, 63.8421 million yuan, 103.0335 million yuan and 104.5544 million yuan respectively, and the proportion of provision for bad debts of accounts receivable in each period was 16.47%, 11.81%, 10.64% and 10.38%, respectively.

In the reply letter, zhongkeyi's explanation for the sharp decline in inventory price is that the company's early molds and parts of old dry pump which are no longer produced after transformation are no longer of use value; The spare parts of the old dry pump are mainly used as maintenance materials, and the consumption rate is slow; If the storage age is less than 1 year, it is affected by customization, and the turnover rate is not high.

Compared with the competitors in the industry, many indicators of zhongkeyi are far behind the competitors.

In terms of inventory falling price, the reporter of 21st century economic report compared the medium and micro companies and Xinyuan micro companies in the same industry, and there was no situation that the amount of inventory falling price reserves increased significantly year by year.

In terms of gross profit margin, which directly reflects the competitiveness of products, zhongkeyi also lags far behind. From 2017 to the first half of 2020, the gross profit margin of the company's main business decreased from 22.2% to 11.71%, close to the cut. In the same industry, the main business gross profit margin of North Huachuang, Zhongwei company and Xinyuan micro Co., Ltd. are mostly kept at 35% - 40%. The gross profit rate of dry vacuum pump, the main product of zhongkeyi, fluctuated greatly. In 2017 and 2019, the gross profit rate was negative, and in the first half of 2020, this level was only 7.07%. The highest gross profit rate was only 10.51%.

What is worrisome is that, in addition to the increasing losses, the net cash flow from operating activities of zhongkeyi has decreased year by year, reaching 8.8784 million yuan, - 28.0172 million yuan, - 38.1188 million yuan and - 108.3217 million yuan respectively at the end of each report period. This shows that the hematopoietic capacity of the company's main business is declining.

In this regard, the exchange pointed out in the inquiry that the net profit of the issuer after deducting the non recurring profit and loss continues to be negative, the net cash flow generated from operating activities is a net outflow and the amount is gradually expanded. The company is required to comprehensively analyze whether the company has continuous operation risk and liquidity risk in combination with relevant adverse factors.

Lack of semiconductor and photovoltaic?

What is more controversial is that the reporter of 21st century economic report has noticed that although Sinotech gives the impression of semiconductor equipment manufacturers to the outside world, it has entered the photovoltaic field on a large scale in 2019. In order to achieve the long-term strategic layout in the photovoltaic industry, the company adopts the low-cost strategy, which further reduces the company's profit level.

According to zhongkeyi, in 2017, the company realized the batch application of dry-type vacuum pump in SMIC international production lines. Considering the extreme importance of the integrated circuit industry and the demand for domestic substitution, the company gradually built a production and supporting system for the integrated circuit industry. However, the initial production scale is small and does not have the scale effect. Considering that there is certain similarity between the photovoltaic dry vacuum pump and the integrated circuit pump in the pan semiconductor industry, it expands to the photovoltaic industry.

In 2019, through the batch sales of Longji, a leading enterprise in the photovoltaic industry, zhongkeyi has rapidly expanded its business scale.

From the perspective of customer structure, SMIC only appeared in the position of the largest customer of zhongkeyi in 2017, accounting for 8.56% of sales, and has not appeared since then. In 2018, Changjiang storage and North Huachuang became the first and second largest customers, accounting for about 20% in total; However, by 2019, Longji has become the largest customer, accounting for 23.25%; In the first half of 2020, the proportion of sales from Longji shares further increased to 34.31%.

Since 2019, the sales revenue from photovoltaic industry of China Science & Technology Instrument Co., Ltd. exceeds that of integrated circuit business, and is twice as much as the latter; In the first half of 2020, the sales revenue from the photovoltaic industry is about 30 million yuan more than that from the integrated circuit business.

A senior investor who has long paid close attention to zhongkeyi said, "from the perspective of customer changes, SMIC became its first largest customer for a short time in 2017, and then disappeared. To a certain extent, it shows that its product level can not fully meet the requirements of large first-line semiconductor manufacturers. Although the demand for semiconductor vacuum pumps is large, the technical requirements are also high. "

Although the revenue of photovoltaic business increased rapidly, the actual performance was not good. It seems that zhongkeyi entered the photovoltaic industry to "lose money and earn money". In each reporting period, the gross profit of dry vacuum pump products in China Scientific Instrument photovoltaic industry was 5.71%, - 4.46%, - 8.82%, - 3.45%.

The source further said, "perhaps zhongkeyi also realized the bottleneck in the semiconductor field, so it entered the photovoltaic field, but it has always been the performance of negative gross profit rate, with no increase in income and no obvious advantage."

The Shanghai Stock Exchange has also paid attention to this problem in the inquiry letter. It requires the company to objectively describe the competitiveness of the issuer in the field of vacuum products and the gap with well-known foreign competitors in combination with the competitive pattern, market share and technical level, and whether the behavior of winning the bid at a low price or opening the market with a low gross profit rate is in line with the business logic and sustainability.

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