Stock abbreviation: Kelun Electronics Stock Code: 688206 Shanghai Kelun Electronics Co., Ltd
Primarius Technologies Co., Ltd.
China (Shanghai) pilot Free Trade Zone Lingang New Area, building C, No. 888, Huanhu West Second Road, IPO announcement of science and Innovation Board
Sponsor (lead underwriter)
(No. 111, Fuhua 1st Road, Futian street, Futian District, Shenzhen)
December 27, 2021
hot tip
The shares of Shanghai Kelun Electronics Co., Ltd. (hereinafter referred to as "Kelun Electronics", "the company", "the issuer" or "the company") will be listed on the science and Innovation Board of Shanghai Stock Exchange on December 28, 2021. The company reminds investors to fully understand the stock market risks and the risk factors disclosed by the company, and avoid blindly following the trend of "speculation" in the initial stage of new share listing , we should make prudent decisions and invest rationally.
Section I important statements and tips
1、 Important statements and tips
The company and all directors, supervisors and senior managers guarantee that the information disclosed in the listing announcement is true, accurate and complete, promise that there are no false records, misleading statements or major omissions in the listing announcement, and bear legal liabilities according to law.
The opinions of Shanghai Stock Exchange and relevant government authorities on the listing of the company's shares and related matters do not indicate any guarantee to the company.
The company reminds investors to carefully read and publish on the website of Shanghai Stock Exchange（ http://www.sse.com..cn. ）The contents of the "risk factors" chapter of the company's prospectus, pay attention to risks, make prudent decisions and make rational investment.
The company reminds the majority of investors that investors are invited to refer to the full text of the company's prospectus for relevant contents not involved in this listing announcement.
The company reminds investors to pay attention to the investment risk at the initial stage of IPO (hereinafter referred to as "new shares"), and investors should fully understand the risk and rationally participate in the trading of new shares.
Specifically, the risks at the initial stage of listing include but are not limited to the following:
1. Relaxation of price limit
The competitive trading of stocks on the science and innovation board is subject to a wide range of price limits. For stocks listed in the initial public offering, there is no price limit in the first five trading days after listing, and the price limit thereafter is 20%. On the first day of the listing of new shares on the main board of Shanghai Stock Exchange, the increase limit was 44%, the decrease limit was 36%, and the increase and decrease limit was 10% from the next trading day. The science and innovation board further relaxed the limit on the rise and fall range at the initial stage of stock listing, improving the trading risk. 2. The number of tradable shares is small
At the initial stage of listing, since the share lock-in period of the original shareholders is more than 12 months, the lock-in period of the sponsor's follow-up investment shares is 24 months, the lock-in period of the shares of senior managers and core employees participating in the strategic placement is 12 months, and the lock-in period of the online lower limit share sale is 6 months. After this issuance, the company's non tradable shares are 36286481, accounting for 8.3647% of the total share capital after issuance, At the initial stage of listing, the number of circulating shares is small, and there is a risk of insufficient liquidity.
3. Margin trading risk
Since the first day of listing, the shares on the science and innovation board can be used as the subject of margin trading, which may produce certain price fluctuation risk, market risk, margin increase risk and liquidity risk. Price fluctuation risk means that margin trading will aggravate the price fluctuation of the underlying stock; Market risk means that when investors use stocks as collateral for financing, they need to bear not only the risks caused by the changes in the original stock price, but also the risks caused by the changes in the stock price of new investment, and pay corresponding interest; Margin increase risk means that investors need to monitor the guarantee ratio level throughout the transaction process to ensure that it is not lower than the maintenance margin ratio required by margin trading; Liquidity risk refers to that when the price of the underlying stock fluctuates violently, the financed purchase of securities or the repayment of securities, the sale of securities or the repayment of securities may be blocked, resulting in greater liquidity risk.
4. The price earnings ratio and market sales ratio are higher than the average level of the same industry
The issue price is 28.28 yuan / share, and the corresponding P / E ratio is:
(1) 380.56 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before the issuance);
(2) 517.75 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before the issuance);
(3) 422.85 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company before deducting non recurring profits and losses audited by an accounting firm in 2020 in accordance with Chinese accounting standards by the total share capital after the issuance);
(4) 575.28 times (earnings per share is calculated by dividing the net profit attributable to shareholders of the parent company after deducting non recurring profits and losses audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after this issuance);
In combination with the issuer's profit model, profitability stability and valuation of comparable companies, this issuance also discloses the market sales rate that can reflect the issuer's industry characteristics.
The issue price is 28.28 yuan / share, and the corresponding market sales ratio is:
(1) 80.32 times (the income per share is calculated by dividing the operating income audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital before the issuance);
(2) 89.24 times (the income per share is calculated by dividing the operating income audited by an accounting firm in accordance with Chinese accounting standards in 2020 by the total share capital after the issuance);
The company's industry is software and information technology services (classification code: I65), the post issuance market value of the company corresponding to the issuance price of 28.28 yuan / share is about 12.268 billion yuan, the company's operating revenue in 2020 is 137.4832 million yuan, and the issuance price corresponds to 89.24 times of the diluted post market sales rate in 2020; the lower of the company's net profit before and after deducting non recurring profits and losses in 2020 is 21.3259 million yuan, and the corresponding diluted P / E ratio is 575.28 times, which is high The arithmetic mean value of the static P / E ratio of comparable companies in 2020 after deducting non. The market sales ratio and P / E ratio of the company are higher than the average level of comparable companies in the same period, and there is a risk that the decline of the issuer's share price will bring losses to investors in the future. The company reminds investors that there may be a risk of loss caused by the decline of share price in the future.
Unless otherwise specified, the abbreviations or terms in this listing announcement shall have the same meanings as those in the prospectus of the company's initial public offering of shares. 2、 Special risk tips
(i) The competition risk caused by the relatively limited market scale, the current situation of the market pattern, the low richness of the company's product types and the small business scale
According to semi and WSTS statistics, in 2020, the global EDA market 1 scale was about 11.5 billion US dollars, with a year-on-year increase of about 12%. Compared with the global integrated circuit market of more than 360 billion US dollars, the EDA market scale accounted for a relatively small proportion. According to GIA's forecast data, the compound growth rate of global EDA market from 2020 to 2027 is about 8.7%, and that of China's EDA market in the same period is about 11.7%. EDA tools have obvious scale effect. At present, the global EDA market is basically in the pattern of oligopoly, dominated by Xinsi technology, kengton electronics and Siemens EDA, with high industry concentration. Under the current market competition pattern of oligopoly, the company has a gap in comprehensive competitiveness compared with international EDA giants. At the technical level 1, including the semiconductor IP market, the semiconductor IP market will be about US $4.038 billion in 2020.
And brand awareness, the company's individual tools can reach the technical level similar to that of international EDA giants, but there is a large gap in the company's comprehensive technical strength and brand awareness compared with its decades of technology R & D and market position accumulation; In terms of market share and coverage of EDA tools, compared with billions of dollars of annual revenue of international EDA giants and covering the whole process of integrated circuit design and manufacturing or most process links, the company's operating revenue in the last year was 137 million yuan. At present, the main EDA products are only modeling tools for manufacturing and simulation tools for design. The company's overall market share Product variety richness, coverage links and product sales synergy are at a significant disadvantage. In the case of large gap between the above aspects and the international EDA giants and relatively small industry scale, it is uncertain whether the company can continue to expand the market and improve the recognition of high-quality customers around the world based on the technology and channel foundation of existing products, so as to achieve sustained and benign business growth.
During the reporting period (for the period from January 1, 2018 to June 30, 2021, the same below), the company's operating income is 51.9486 million yuan, 65.4866 million yuan, 137.4832 million yuan and 81.9073 million yuan respectively. The small scale of operation limits the total investment in R & D, sales, acquisition and merger and other activities that the company can support to a certain extent, and the company's financial data is easy to change with the external economy The environment or its own business activities fluctuate greatly.
（2） Risks related to technology upgrading iteration and R & D investment
Most of the company's downstream customers are global well-known enterprises in the integrated circuit industry, which have high requirements for the technical leadership of EDA tools. The company needs to continuously meet the needs of the dynamic development of the industry, and always face the technical competition of rapid upgrading and iteration of international competitors' products. Under the competitive pressure of the international EDA giants' annual R & D investment of about US $1 billion and the R & D team of thousands of people, the company must continue to maintain high-intensity R & D investment and continuously carry out product upgrading iterations to maintain and even expand the market. In the future, if the company's technology upgrading iteration progress and results fail to meet expectations, resulting in the technical level falling behind the industry upgrading iteration level, the company's product competitiveness will be affected, market development opportunities will be missed, and the company's future business development will be adversely affected. At the same time, in the face of the rapid development of the integrated circuit industry and the increasing technical level of international EDA giants, the company's R & D investment in the development of new products or the upgrading of existing products may exceed the expected R & D investment, which may lead to the imbalance between the R & D investment and the generated income in the short term, which may have an adverse impact on the company's short-term operating performance.
The company has continuously increased R & D investment in recent years and is expected to continue to maintain a high proportion of R & D investment in the future. During the reporting period, Proportion of R & D expenses in operating revenue (after deducting the impact of share based payment) are 36.83%, 54.55%, 36.10% and 37.74% respectively. When the R & D investment accounts for a relatively high proportion, if the R & D investment or the upgrading effect of existing products is less than expected, the company will face the risk that the R & D investment will be difficult to recover, which will affect the subsequent R & D investment and adversely affect the company's performance and competitiveness. At the same time, in the EDA industry The competition for talents is very fierce. If the company cannot maintain the stability of the R & D team and continuously attract excellent technicians to join, it may not be able to maintain the competitive advantage of the existing technology or continuously develop new technologies and products. With the rapid improvement of relevant policies and industry environment in recent years, it may increase the salary of relevant technical talents, especially high-end talents, increase the cost of attracting or retaining relevant talents, and then adversely affect the company's operating performance.
（3） Risk of intellectual property infringement
The company's business income mainly comes from EDA tool authorization. The intellectual property rights with core technologies are the key for the company to maintain its competitiveness. At present, the company has formed a professional core technology and related technology reserve with independent intellectual property rights. There are many cases of intellectual property theft or improper use in EDA industry all over the world. The company has protected its independent intellectual property by applying for patents and software copyrights, but the risk of theft or improper use of the above intellectual property cannot be ruled out. If intellectual property rights are infringed by others, it will be detrimental to the normal business operation of the company. At the same time, the company has always attached importance to the research and development of independent intellectual property rights to avoid infringement of third-party intellectual property rights, but it still can not completely eliminate the infringement of third-party intellectual property rights caused by factors such as deviation in the understanding of intellectual property rights by the company's employees, and the risk that competitors or other stakeholders take improper means such as malicious litigation to hinder the normal development of the company's business.
（4） Risk that R & D achievements are not recognized by the market, resulting in failure to form large-scale sales
Due to the key role of EDA tools in the integrated circuit industry, EDA industry has the characteristics of difficult product verification and high market threshold. Especially for international well-known customers, it has a high threshold for verification and recognition of new enterprises and new products. Therefore, to transform the research and development achievements of EDA industry into products recognized by the international mainstream market, it not only needs to continue a large amount of research and development investment to form products that reach the advanced level in technology, but also needs to have strong brand influence, channel ability, rapid iteration ability, etc. If the company develops products with advanced technology but fails to pass the verification and recognition of the international mainstream market, the R & D results still cannot form large-scale income, which will also have an adverse impact on the company's operating performance.
（5） Risk of goodwill impairment
As of June 30, 2021, the goodwill of the company was RMB 59.9969 million due to the acquisition of 80% equity of Boda micro in December 2019, and RMB 36.3631 million due to the acquisition of 100% equity of entasys in June 2021. Boda micro's main businesses are device modeling, authorization of PDA tools related to PDK, semiconductor engineering services, sales of semiconductor device characteristic test instruments, etc. after the acquisition, the company has integrated its technology R & D and sales channels to give full play to the synergy effect. Boda micro's operation in 2020 is good, and there is no sign of goodwill impairment. Entasys's main business is the development of early design planning solutions and the provision of EDA solutions for SoC chip design. At present, entasys is mainly responsible for the product R & D, sales and after-sales support of the issuer in Korea and surrounding areas
