After this stock issuance, it is planned to be listed on the science and innovation board market, which has high investment risk. Kechuang board company has the characteristics of large R & D investment, high operation risk, unstable performance and high delisting risk, and investors are facing great market risk. Investors should fully understand the investment risks of the science and innovation board market and the risk factors disclosed by the company, and make investment decisions prudently.
Aojie Technology Co., Ltd
ASR Microelectronics Co., Ltd.
(floor 8, nominal Floor 9, building 10, No. 399, Keyuan Road, China (Shanghai) pilot Free Trade Zone)
Letter of intent for initial public offering and listing on the science and Innovation Board
Sponsor (lead underwriter)
No. 689, Guangdong Road, Shanghai
Issuer statement
Any decision or opinion made by the CSRC and the exchange on this issuance does not indicate that they guarantee the authenticity, accuracy and integrity of the registration application documents and the information disclosed, nor do they indicate that they make substantive judgment or guarantee on the profitability, investment value of the issuer or the income of investors. Any statement to the contrary is a false statement.
According to the provisions of the securities law, the issuer shall be responsible for the changes in the operation and income of the issuer after the shares are issued according to law; Investors independently judge the investment value of the issuer, make investment decisions independently, and bear the investment risks caused by changes in the operation and income of the issuer or changes in the stock price after the shares are issued according to law. The issuer and all directors, supervisors and senior managers promise that the prospectus and other information disclosure materials are free from false records, misleading statements or major omissions, and bear individual and joint legal liabilities for their authenticity, accuracy and completeness.
The actual controller of the issuer undertakes that there are no false records, misleading statements or major omissions in this prospectus, and shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness.
The person in charge of the company, the person in charge of accounting and the person in charge of accounting institutions shall ensure that the financial and accounting materials in the prospectus are true and complete.
The issuer and all directors, supervisors, senior managers, actual controllers of the issuer, sponsors and underwriting securities companies promise to compensate investors for losses incurred in securities issuance and trading due to false records, misleading statements or major omissions in the issuer's prospectus and other information disclosure materials.
The sponsor and the securities service institution promise to compensate the investors for the losses caused to the investors due to the false records, misleading statements or major omissions in the documents prepared and issued for the issuer's public offering.
Overview of this offering
Type of shares issued: RMB ordinary shares (A shares)
Number of shares issued: 41830089 shares were publicly issued, accounting for 10% of the total share capital after issuance. This issuance is new shares and does not involve the public offering of shares by shareholders.
The par value of each share is RMB 1.00
Issue price per share [] yuan
Expected issue date: January 4, 2022
Stock exchanges and sectors to be listed on the science and Innovation Board of Shanghai Stock Exchange
The total share capital after issuance is 418300889 shares
Sponsor (lead underwriter) Haitong Securities Company Limited(600837)
Signing date of the prospectus: December 24, 2021
Tips on major events
The company specially reminds investors to pay attention to the following matters and risks of the company and this offering, and invites investors to carefully read the text of this prospectus.
1、 Relevant commitments
The company reminds investors to carefully read the important commitments made by the company, the company's major shareholders, directors, supervisors, senior managers, core technicians, the sponsors and securities service institutions of the offering, the binding measures for failing to fulfill the commitments and the performance of the commitments that have triggered the fulfillment conditions, For commitments, please refer to "VI. important commitments and performance of commitments made by relevant parties to this offering" in "section 10 investor protection" of this prospectus.
2、 Investors are specially reminded to pay attention to the following risks of the company and this offering
The company reminds investors to carefully read the "section IV Risk Factors" of this prospectus and pay special attention to the following matters:
(i) Risk of continuous loss
1. The risk that the company may not be profitable or unable to distribute profits in the short term in the future
As the cellular communication in which the company is located is a typical field with high R & D investment, it needs large R & D investment in the early stage to realize the commercialization of products. The company was established in 2015, and the establishment time is still short. It needs large R & D investment to ensure the accumulation of technology and product development, so it is in a state of loss. During the reporting period, the net profits attributable to the common shareholders of the parent company were -537442200 yuan, - 583548600 yuan, - 2326529800 yuan and -371542100 yuan respectively. After deducting non recurring profits and losses, the net profits attributable to the common shareholders of the parent company were -538443500 yuan, - 592714800 yuan, - 57237300 yuan and -352058200 yuan respectively. As of June 30, 2021, The accumulated undistributed profit in the consolidated statements of the company is -3049460600 yuan. As of the signing date of this offering intention, the company has not made a profit and has accumulated outstanding losses. If the scale effect of the company's operation cannot be fully reflected, the company may not be profitable or profit distribution in the short term in the future. It is expected that after the initial public offering and listing, the company will not be able to pay cash dividends in the short term.
2. The company may be restricted or negatively affected in terms of capital status, R & D investment, business development, talent introduction, team stability, etc
During the reporting period, the company's working capital depended on external financing. If the company is unable to withdraw within a certain period in the future, it will have a significant adverse impact on the company's business.
IC design industry is a typical technology and capital intensive industry, which has the characteristics of high capital investment and high R & D risk. With the improvement of manufacturing process standards for new products, as one of the important processes of integrated circuit design, the cost of streaming is also rising sharply. During the reporting period, the net cash flow generated from the company's operating activities was -427.9302 million yuan, -542.2991 million yuan, -557.5123 million yuan and -45.2181 million yuan respectively. If the net cash flow generated from operating activities cannot be improved, the company may not be able to perform its obligations to suppliers or partners in time, and the company's business prospects The financial condition and operating performance have a significant adverse impact.
The pressure on the company's capital situation will affect the payment and growth of the company's employees' salary, thus affecting the company's future talent introduction and the stability of the existing team, may hinder the realization of the company's R & D and commercialization objectives, and reduce the company's ability to implement business strategy.
3. When the limited liability company is changed into a joint stock limited company as a whole, the issuer has the risk of accumulated unrecovered losses
The benchmark date of the company's share reform is April 30, 2020, and the amount of undistributed profits on the benchmark date of the share reform is -2066337700 yuan. The accumulated losses before the share reform are mainly due to the operating losses caused by the large R & D expenses invested in product R & D in the early stage of the company's development. In the future, there is a risk that the company's products at this stage will be replaced and new products will not be recognized by the market, resulting in the failure to fully realize the industrialization of the core technology accumulated by the company for many years, and there is a risk of continuous loss in the short term after listing.
4. Risk of large share based payment
During the reporting period, the company's non recurring profits and losses were rmb1001200, rmb9166200, - 1754156800 and -19483900 respectively. The company is a talent intensive enterprise, and talent is the core element of the company's operation. In order to motivate employees, the company has implemented an employee stock ownership plan. In 2020, a large one-time equity settled share based payment fee of RMB - 1766647000 was confirmed. There is a risk that this incentive can not effectively improve the company's technology accumulation and accelerate technology industrialization, and can not achieve the company's revenue growth and profit objectives.
5. Risk of triggering delisting risk warning and even delisting conditions
According to the Listing Rules of Shanghai Stock Exchange's Kechuang board: "12.4.2 in case of any of the following circumstances, the bourse shall implement delisting risk warning for its shares: (I) the audited net profit (including retroactive restatement) before or after deducting non recurring profits and losses in the latest fiscal year is negative, and the audited operating income in the latest fiscal year is negative (including retroactive restatement) less than RMB 100 million; (II) the audited net assets (including retroactive restatement) in the latest fiscal year are negative ".
During the reporting period, the company realized operating revenue of RMB 115.3911 million, RMB 397.9416 million, RMB 1080.9581 million and RMB 879.4586 million respectively, but it has not yet realized profit. The company's wireless communication chip design industry has high technical threshold, large R & D investment, and the R & D expenses continue to remain at a high level. During the reporting period, the R & D expenses of the company were 524396800 yuan, 596772000 yuan, 2111168800 yuan and 456170300 yuan respectively, including 1364293300 yuan of share payment in 2020. The compound annual growth rate of the company's operating revenue from 2018 to 2020 reached 206.07%. According to the company's preliminary calculation, if the company's revenue growth rate in 2022 exceeds 50%, the proportion of period expenses in revenue is about 29%, and the gross profit margin gradually increases to about 27%, the company is expected to achieve a small profit in 2022. The above calculation does not constitute a profit forecast or performance commitment. In addition, the company will continue to invest in large-scale R & D in the next few years. If the industry development is lower than expected, the gross profit margin cannot be improved due to industry competition, the supplier's production capacity cannot meet the company's needs, the company's customer development is unfavorable, and the company fails to launch competitive new products in time, the company's revenue growth may be lower than expected, The unprofitable state of the company may persist after listing. In extreme cases, it is not ruled out that the company's operating revenue will decline sharply and continue to suffer losses in the future, which will trigger delisting risk warning conditions or even trigger delisting conditions.
（2） Market competition risk
In the 4G era, many semiconductor and chip manufacturers have entered the baseband chip market. However, due to the gradual oligopoly and self-development of the baseband market and fierce industry competition, many chip manufacturers withdrew from the baseband market. For example, Broadcom announced its withdrawal from the baseband chip market in June 2014, and Intel sold the baseband business to apple in December 2019. According to statista's data, Qualcomm, Hisilicon and MediaTek ranked among the top three in the global baseband chip market in 2020, respectively accounting for 43%, 18% and 18% of the global baseband chip market share in 2020, with a total market share of 79%. Other market shares are composed of Samsung and other manufacturers. The main baseband manufacturers faced by the company in China are Hisilicon and Ziguang zhanrui. According to the data of strategy analytics, the total market value of global baseband chips in 2020 is about 26.6 billion US dollars. According to this market data, the company's cellular baseband communication chip products account for 0.51% of the global baseband chip market in 2020, and the market share is relatively small. There is a big gap between the company and industry leaders. Through years of large R & D investment, the above companies have larger overall assets, richer product line layout and more stable customer base. Because baseband chip customers generally have high viscosity, they will not easily change chip suppliers, and the company's establishment time is still short, resulting in the disadvantage of the company's products in market promotion, There is a risk that mature manufacturers such as Qualcomm and MediaTek will use their first mover advantages to squeeze the company's market share.
（3） Risk of failure and lag in the development of new products such as 5g chips
In terms of cellular baseband chips, the revenue of cellular chips from January to June 2021 accounted for 90.21% of the chip revenue and 79.45% of the operating revenue. The products sold were 4G products, which were the most important products of the company. The company was mainly developing 5g products, but the 5g technology of the company had not been verified by customers and realized large-scale sales. In addition, China has begun to deploy and build 5g network in 2019. The company does not rule out the risk that it is difficult to develop customers due to its late entry into the market, and the risk that the issuer's products cannot be recognized by the market due to the introduction of updated generation communication technology.
In terms of non cellular IOT chips, in addition to the continuous optimization of existing products, the company is developing a new wifi6 chip, which has not been verified by customers and has not achieved large-scale sales, and the company's AI chip products have not yet achieved large-scale sales. If the company is developing chips, especially the products launched for the first time, can not be recognized by customers, roll out or mass production failure, it will have an adverse impact on the company's product sales and market competitiveness.
（4） The company's mobile phone baseband chip is only used for function machines, and there is a risk of failure in the research and development of smart phone chip
According to the report issued by the China Academy of communications and communications, in 2020, 5g mobile phones in the Chinese market accounted for 52.9% and 47.2% of mobile phone shipments and the number of listed models in the same period, respectively. Qualcomm, MediaTek, Hisilicon semiconductor, Ziguang zhanrui and other chip design manufacturers have launched corresponding chip products and successfully realized industrialization. The company has not yet launched a mature 5g smartphone chip, which is temporarily at a disadvantage in the competition.
The mobile phone baseband chips sold by the company during the reporting period are used for function machines, and the revenue of smart phone baseband chips has not yet been formed. It is expected that the company's new generation of smart phone chip products will still take 3 to 5 years from project initiation to product design, mass production and commercialization. During this period, the company still needs to invest a lot of R & D expenses in the R & D and accumulation of technologies related to smart phone chips. There is uncertainty about the success of product R & D and the risk of failure in the R & D of smart phone chips.
At the same time, smart phone chips will directly affect the performance of smart phones
