Core stuff (male Public number: aic hip001) Author | High song Edit | Heart edge Chipsets reported on June 23 that on Monday, VJ Chuangxin (Tianjin) Electronic Technology Co., Ltd. (hereinafter referred to as “VJ Chuangxin”) technology innovation board IPO was accepted. Weijie Chuangxin’s main business is RF front-end chips, and its products include RF power amplifier modules, RF switch chips, and Wi-Fi RF front-end modules. Rong Xiuli, the leader of VJC, once founded Tianyu mobile phone. In 2007, the domestic sales volume reached 17 million units, second only to Nokia. The products are mainly feature phones based on MediaTek chip solutions, so it was once known as the “Godmother of Copycats”. The RF front-end refers to the intermediate module located between the RF transceiver and the antenna. Its function is to send and receive wireless electromagnetic wave signals. It is the core necessary for mobile terminal equipment to realize cellular network connection, Wi-Fi, Bluetooth, GPS and other wireless communication functions. Module. During the reporting period, VJ Chuangxin’s revenue grew rapidly. In 2018, the company’s revenue was 284 million yuan, and in 2020, its revenue reached 1.810 billion yuan. The company’s end customers include well-known manufacturers such as Xiaomi, OPPO, vivo, Huaqin, Longcheer Technology, Wingtech, etc., and it is the manufacturer with the largest shipment of 4G RF power amplifiers in China. The actual controllers of VJC are chairman Rong Xiuli and director and general manager Sun Yijun. Gaintech, a subsidiary of Taiwanese chip company MediaTek, is the largest shareholder of VJC, holding 28.12% of the company’s shares. In this IPO, VJ Chuangxin plans to publicly issue no less than 40.08 million shares, and the raised funds will be 2.487 billion yuan after deducting the issuance costs, which will be mainly used for the construction of integrated circuit production and test centers, R&D centers and supplementary liquidity. project. ▲The equity structure of VJC 1. The average annual compound growth rate is 152%, and the revenue from the PA module business accounts for 99% According to the prospectus, the total operating income of VJC from 2018 to 2020 will be 284 million yuan, 581 million yuan and 1.810 million yuan, respectively, with an average annual compound growth rate of 152.48%. In terms of net profit, VJ Chuangxin has a loss. From 2018 to 2020, the company’s net profit will be -151 million yuan, 8.0534 million yuan and -667 million yuan respectively. ▲VJ Chuangxin’s revenue and net profit from 2018 to 2020 The sales model of VJC is divided into distribution mode and direct sales mode. Its distribution mode will account for 78.66% of total revenue in 2020, and direct sales will account for 21.34%. The main business of Weijie Chuangxin can be divided into PA module, RF front-end and Wi-Fi RF front-end module according to the product. During the reporting period, PA module business revenue accounted for more than 95%, which is the main source of VJC’s revenue. In 2020, the revenue from the PA module business accounted for 99.20% of the revenue of VJC, and the revenue from the RF switch and Wi-Fi RF front-end module business accounted for 0.68% and 0.12%, respectively. ▲VJ Chuangxin’s revenue and proportion of each business from 2018 to 2020 According to the prospectus, the main customers of Weijie Chuangxin include Huaxinke, Tycoyuan, Shenzhen Huan N, Lianzhongda, Arrow Asia, Xiamen Weixin, Company A and Vivo Mobile. Among them, Huaxinke corresponds to 2 end customers of Xiaomi and Wingtech; Tyco source corresponds to 4 end customers of Huaqin, Longcheer, Wingtech, and Transsion; Shenzhen Huan N corresponds to OPPO and Waterward 2 Two end customers; Lianzhongda corresponds to Transsion and Bird; Xiamen Weixin corresponds to Lenovo. Huaxinke, Tycoyuan and Shenzhen Ring have been the top five customers of VJC from 2018 to 2020. VJ Chuangxin’s business is relatively concentrated. From 2018 to 2020, the top five customers’ sales amount accounted for 99.80%, 95.90% and 98.67% of total revenue, respectively. ▲The top five customers of VJ Chuangxin from 2018 to 2020 In terms of procurement, because Weijie Chuangxin is an integrated circuit design company, it is not engaged in wafer manufacturing and packaging and testing, so its main procurement items are wafers, SMD, substrates and packaging and testing services. In 2020, the top five suppliers of VJ Chuangxin are Wenmao, Changjiang Electronics Technology, GlobalFoundries (GF), Zhuhai Yueya and Guangxinlian, and their purchases accounted for 31.65% and 15.89% respectively. , 11.19%, 9.94% and 7.57%, a total of 76.24%. During the reporting period, Wenmao and GlobalFoundries have been the top two wafer suppliers of VJ Chuangxin, and Changjiang Electronics Technology is the largest packaging and testing service provider of VJ Chuangxin during the reporting period. ▲The top five suppliers of VJ Chuangxin from 2018 to 2020 2. The R&D investment in 2020 will be nearly 400 million, and the R&D team will account for 67% From the perspective of the entire market, VJC’s main competitors include companies such as Skyworks, Qorvo, Broadcom, Qualcomm, Murata and Zhuo Shengwei. Compared with leading companies in the industry, VJC still has a certain gap in terms of revenue scale, customer coverage, and market share. However, in China, VJC has a relatively high market share of RF power amplifiers, and its 4G RF power amplifier shipments rank first in China. The relatively leading domestic market share also reflects the technical strength of VJC. In 2020, VJ Chuangxin invested 399 million yuan in R&D, accounting for 22.02% of revenue. Compared with other companies in the industry, its R&D investment ratio is relatively high. ▲Compared with other companies in the industry Weijie Chuangxin has 243 employees and 162 R&D personnel, accounting for 67% of the total number of employees. Among the R&D personnel, 62 have a postgraduate degree and 72 have a bachelor degree. There are 3 core technical personnel in the company, including FENG WANG, Lin Sheng and Bai Yunfang. FENG WANG holds a doctoral degree from the University of Minnesota (Double Cities) in the United States. From July 2008 to September 2010, he was the lead engineer of wireless receiver and transmitter design at Huawei Technologies Co., Ltd.; from October 2010 to February 2018, FENG WANG served as the IC design consultant of VJC; since then, he has been He is the Chief Technology Officer of VJ Chuangxin. Lin Sheng has a master’s degree from Fudan University, and has worked as a R&D engineer in Shanghai Xinmao Semiconductor, Shanghai Huahong, Celorg Semiconductor, Verizon Semiconductor and other companies; from February 2011 to June 2011, he was accepted by Sige Semiconductor Hired as a R&D engineer; since July 2011, Lin Sheng has been the R&D director of VJC. Like Lin Sheng, Bai Yunfang also holds a master’s degree from Fudan University and serves as the R&D director of VJC. She used to work in Nanjing Electronics 14th Institute, and then worked as an integrated circuit design engineer at Xintang Electronics. From April 2007 to November 2011, she worked as a radio frequency engineer at Verizon Semiconductor Technology (Shanghai) Co., Ltd., and then Bai Yunfang worked at VJ Chuangxin. As of the end of 2020, Weijie Chuangxin and its subsidiaries have authorized 37 patents at home and abroad, and have 87 exclusive rights for integrated circuit layout designs. 3. MediaTek is the largest shareholder and promises not to engage in horizontal competition business As of the signing date of this prospectus, Gaintech, the wholly-owned controlling entity of MediaTek, holds 28.12% of the equity of VJ Chuangxin and is the largest shareholder. According to the “Commitment Letter” and “Supplementary Commitment” jointly issued by MediaTek and Gaintech on November 29, 2019 and March 31, 2021, respectively, MediaTek and Gaintech promised: Under any circumstances, they will not obtain VJC through any means. The actual control of the core. In addition, MediaTek, MediaTek Investment, and Gaintech jointly issued the “Letter of Commitment on Avoiding Horizontal Competition for Shareholders Holding More than 5% of VJ Chuangxin (Tianjin) Electronic Technology Co., Ltd.” in May 2021. , Commitments were made on matters such as foreign investment restrictions and related legal responsibilities. The actual controllers of VJC are chairman Rong Xiuli and director and general manager Sun Yijun. Rong Xiuli obtained an MBA degree from China Europe International Business School. She once founded Beijing Tianyu Langtong Communication Equipment Co., Ltd. and launched Tianyu mobile phone. Some media called her “the godmother of copycats.” From October 2017 to December 2019, Rong Xiuli served as the chairman of VJ Chuangxin; from December 2019 to September 2020, she served as the director of VJ Chuangxin; from September 2020 to present, Rong Xiuli served as VJ Chuangxin Chairman. Sun Yijun holds an EMBA degree from Tsinghua University. He used to be an engineer at the Electronic Science Research Institute of the Ministry of Electronics, a sales manager for the northern area of Tyco Electronics (Shanghai) Co., Ltd., and a key account manager for Beijing Rosenberg Electronics Co., Ltd.; from August 2004 to In October 2010, Sun Yijun served as the senior sales manager of Verizon United Semiconductor (Beijing) Co., Ltd.; from October 2010 until now, he has been the general manager of VJ Chuangxin. On January 25, 2019, Rong Xiuli and Sun Yijun signed the “Concerted Action Agreement”, which established the legal relationship basis for joint control of VJC. Rong Xiuli directly holds 14.80% of VJ Chuangxin, and indirectly controls 9.39% of the company’s shares through Tianjin Yujie and Tianjin Yuteng; Sun Yijun directly holds 3.05% of VJ Chuangxin, and through Beijing Yuyue and Tianjin Yushang Indirectly controls 11.05% of the company’s shares. The two parties hold a total of 38.29% of the company’s shares and are the actual controllers of VJC. In addition, the shareholder who owns more than 5% of the shares of Weijie Chuangxin is Guiren Capital, which holds 8.65% of the shares. Hubble Investment, OPPO Mobile, and Xiaomi Fund accounted for 3.57%, 3.39%, and 1.74% of the company’s shares, respectively. ▲ List of shareholders of Weijie Chuangxin Conclusion: Low net profit, single source of income, or operating risks In the field of RF front-end, foreign companies such as Qualcomm have a relatively high market share and relatively advanced technology, occupying a relatively high market share. At the moment when the 5G market is relatively hot, the listing of domestic players in the RF front-end has certain positive significance. It should be noted that the net profit of VJC is relatively low relative to revenue, and there are certain risks in operation. In addition, its PA business income accounts for more than 99% of its revenue, and its source of income is relatively single. In the future, it is worth paying attention to whether VJC will succeed in listing
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