Covid-19 epidemic continues to spread, making many enterprises related to epidemic prevention earn a lot of money. Shanghai Yeying Microelectronics Technology Co., Ltd. (hereinafter referred to as Yeying micro) is also one of them.
During the epidemic in 2020, the demand for temperature measuring tools such as forehead temperature gun and ear temperature gun increased greatly, resulting in the increase in the volume and price of Yiying micro’s main infrared sensor products. According to the prospectus (application draft), the revenue of Yeying micro in 2020 increased by more than 19 times year-on-year, and the net profit attributable to the parent company increased by more than 37 times year-on-year. However, as the epidemic situation in China slows down, ye Yingwei is also facing the problem of weak growth.
The reporter of the daily economic news found that in terms of growth, yiyingwei has been involved in the application fields of sensor products other than medical and health, such as smart home, consumer electronics, industrial control, security monitoring, etc., and has impacted the listing on the gem. It plans to raise funds for new product R & D and technology upgrading. According to the prospectus, yeyingwei plans to raise 903 million yuan, which is 1.5 times its total assets (as of June 30, 2021). However, recently, ye Yingwei applied to withdraw its IPO. Next, how to solve the capital demand has become a big question. In addition, a large amount of R & D funds increased by Yeying micro in 2020 are used to pay the entrusted development expenses, and the OEM production mode is adopted, which may expose the risk of disclosure of core technology.
performance is at risk of significant decline
In 2020, Yeying micro achieved a revenue of 662 million yuan, an increase of 1940% over the previous year; The net profit attributable to the parent company was 327 million yuan, an increase of 3784% year-on-year. According to Ye Yingwei’s reply to the exchange, in the first half of China’s covid-19 outbreak, the sales unit price of its sensor products once rose to 19.05 yuan, more than seven times higher than that before the outbreak (January 2020).
By industry, we can also see the current dependence of the company’s revenue on the field of medical and health care. In 2020, in the main application fields of Yeying micro products and services, the revenue from the medical and health field accounted for 92% of the main business revenue.
However, with the gradual control of the epidemic in China, ye Yingwei’s performance has shown an obvious downward trend. In the first half of 2021, the sales revenue of Yeying micro sensor products has decreased to 499314 million yuan, a decrease of 55.8% compared with the second half of 2020. QY research predicts that the consumption of infrared thermopile sensors in the medical field will decline for two consecutive years in 2021 and 2022. In this regard, ye Yingwei admitted that there was a “risk of sharp decline” in the company’s performance, and said it would actively develop new products and new customers.
According to the prospectus, yiyingwei plans to raise 903 million yuan in this public offering, which is 1.5 times its total assets (as of June 30, 2021). Obviously, ye Yingwei needs a lot of funds for its future development. Among them, yiyingwei plans to invest 578 million yuan in the “MEMS infrared thermopile sensor production and construction project”, 205 million yuan in the “technology R & D center construction project”, and the remaining 120 million yuan will be used to supplement the working capital. However, ye Yingwei recently withdrew its IPO application, which brings the problem that how to solve the development funds it needs? According to the disclosure of Yeying micro, at present, its financing channels are limited and the financing amount is small. It mainly depends on its own operation accumulation, and its anti risk ability has certain disadvantages.
The prospectus also shows that as of June 30, 2021, the balance of cash and cash equivalents of Yeying micro at the end of the period was about 434 million yuan. In the first half of 2021, yeyingwei had no cash inflow from financing activities.
entrusted development proportion is significantly higher
At present, the competition in the sensor industry is fierce, and foreign manufacturers are better in terms of scale, technology and market share. At present, the industry is facing the challenge of lack of technical talents. In addition, with the gradual application and promotion of infrared technology, more and more infrared technology related companies’ demand for professionals leads to the dispersion of scarce talent resources.
From the perspective of Yeying micro, as of June 30, 2021, Yeying micro has only 55 registered employees and 29 R & D personnel.
It is worth noting that although Ye Yingwei’s R & D expenses increased significantly during the reporting period, most of them were used to pay outsourcing expenses. According to Ye Yingwei’s reply to the exchange, in 2020, its development and manufacturing expenses increased from 244500 yuan to 40171800 yuan, of which the entrusted development expenses reached 400179 million yuan, accounting for 72.01% of the R & D expenses of that year. During the reporting period (20182020 and the first half of 2021), the total contract amount of yeyingwei’s main external R & D projects entrusted reached 49.73 million yuan, of which many projects are related to the development of new products and processes of yeyingwei.
Ye Yingwei explained: “compared with independent development in the whole process, R & D through modular decomposition can greatly accelerate the speed of product industrialization.” Moreover, the entrusted development projects do not involve the core technology outsourcing of the products sold.
However, compared with comparable companies in the same industry, ye Yingwei has a significantly higher proportion of entrusted development. For example, in 2020, Senba Sensing Technology Co.Ltd(300701) commissioned development costs accounted for only 16.36% of R & D costs, and Wuhan Guide Infrared Co.Ltd(002414) commissioned external research and development costs accounted for only 3.05% of R & D costs.
In addition to the outsourcing development of some R & D projects, the processing and manufacturing of Yeying micro products is also the responsibility of a third-party manufacturer. It is disclosed that Yeying micro is mainly engaged in R & D work such as sensor design and process development. The wafer manufacturing is carried out by the wafer foundry, and the wafer testing factory and packaging testing factory are entrusted to carry out packaging testing to complete the production of the final product. Ye Yingwei admitted that due to the limitations of technical secret protection measures, the mobility of technicians and the uncontrollable implementation of confidentiality measures by the OEM, there may still be the risk of disclosure of core technology, which will have an adverse impact on the company’s R & D and operation.
In the original fund-raising and investment plan of Yeying micro, it will avoid the risk of technical disclosure under the entrusted processing mode by building its own core process production line of infrared sensors. However, with the withdrawal of IPO application, how will ye Yingwei avoid outsourcing risk? Will the entrusted development cost be further expanded in the future? In this regard, the reporter of “daily economic news” has repeatedly called the Secretary Office of Yeying micro and sent an interview outline to its public mailbox, but as of press time, he has not replied.
