Another analog chip company broke through the IPO. Zhenhua scenery is mainly engaged in the design, packaging, testing and sales of integrated circuits. Its main products are signal chain, power manager and other products. Recently, the IPO status of Zhenhua scenery was updated to “inquired”.
From the perspective of equity composition, the second largest shareholder of Zhenhua scenery is Shenzhen zhenghexing Electronics Co., Ltd. (hereinafter referred to as zhenghexing Electronics). The actual controller of zhenghexing electronics is Zhang Ya. Last year, the two companies controlled by zhenghexing electronics, Cisco and Guoguang Electric Co.Ltd.Chengdu(688776) , had a meeting, and now Guoguang Electric Co.Ltd.Chengdu(688776) has been successfully listed.
It is worth noting that two private equity funds took shares within one year before the submission of Zhenhua scenery IPO application materials. From the time of establishment, it seems to be a company specially established for taking shares. The surprise purchase of shares before IPO is also an issue of regulatory concern in recent years.
As an enterprise planning to sprint to the scientific innovation board, Zhenhua scenery’s R & D investment increased steadily during the reporting period, but the R & D expense rate was low. In addition, the reporter of the daily economic news noted that the R & D expenses of Zhenhua scenery fluctuated significantly.
“mysterious capital boss” Zhang Ya reappears
From the perspective of equity relationship, the equity relationship of Zhenhua scenery is simple and clear, but in-depth study, it has a great beginning.
The major shareholder of Zhenhua scenery is China Zhenhua Electronics Group Co., Ltd. (hereinafter referred to as Zhenhua Electronics), which is a company under China Electronic Information Industry Group Co., Ltd. (hereinafter referred to as China Electronics) with the construction of electronic component industry ecological chain as the core business
Source: prospectus (draft declaration)
The actual controller of zhenghexing electronics, the second largest shareholder, is Zhang Ya. Last year, two companies controlled by Zhang Ya Guoguang Electric Co.Ltd.Chengdu(688776) and Cisco Rui held meetings in May and November respectively, and the former was listed on August 31, 2021. Guoguang Electric Co.Ltd.Chengdu(688776) its main business is the R & D, production and sales of vacuum and microwave application products. SKR mainly provides reliability testing services for electronic components
Source: prospectus (draft declaration)
In addition, Zhang Ya also directly or indirectly participates in a number of upstream and downstream enterprises in the chip industry chain, including Jinzhou Liaojing Electronic Technology Co., Ltd. (hereinafter referred to as Jinzhou Liaojing), Beijing Zhongding core Electronics Co., Ltd., special chip reserve (Shenzhen) Electronics Co., Ltd.
As it is located in the upstream and downstream of the industrial chain, the above-mentioned companies also cooperate with Zhenhua scenery. For example, Cisco Rui provides outsourcing services for Zhenhua scenery, Xi’an huanyuxin Microelectronics Co., Ltd., a wholly-owned subsidiary of Cisco Rui, provides outsourcing test services for Zhenhua scenery, Zhenhua scenery provides product inspection services for Jinzhou Liaojing, and sells some power chips to zhenghexing electronics,.
Similar to Guoguang Electric Co.Ltd.Chengdu(688776) and sikrui, Zhang Ya also took a stake in Zhenhua scenery halfway. In 2005, when Zhenhua scenery was established, Zhenhua electronics held 100% of the shares. The prospectus (application draft) does not disclose when Zhang Ya held Zhenhua scenery through zhenghexing electronics. After the capital increase of the company in June 2019, the shareholding ratio of zhenghexing electronics is 42.2%. In recent years, through capital increase and equity transfer, the shareholding ratio of zhenghexing electronics has decreased to 26.2%.
two private equity funds suddenly took shares
It is worth noting that in June last year, three shareholders took shares in Zhenhua scenery through equity transfer and free transfer, which is less than one year from the submission of application materials by Zhenhua scenery.
Among them, Zaozhuang Jielan venture capital partnership (limited partnership) (hereinafter referred to as Zaozhuang Jielan) and Xiamen Huiheng Yihe investment partnership (limited partnership) (hereinafter referred to as Xiamen Huiheng) respectively obtained 6.6% and 4.9% shares held by zhenghexing electronics through equity transfer. From the perspective of the transfer price, the premium is high. Zhenghexing electronics carried out equity transfer based on the overall valuation of 2.5 billion of Zhenhua scenery. As of the benchmark date of share reform audit on April 30 last year, the audited net assets of Zhenhua scenery were 512 million yuan.
Zaozhuang Jielan and Xiamen Huiheng are two private equity funds. It seems that the two companies were established to take shares. Zaozhuang Jielan was established on February 23 last year and completed the filing procedures in China Securities Investment Fund Industry Association on May 7. Xiamen Huiheng was established on April 20 last year and completed the filing procedures in China Securities Investment Fund Industry Association on May 13. On June 1, the three parties signed the equity transfer agreement.
“It is common for private equity funds to rush into shares in previous years. This kind of behavior is one of the regulatory concerns in recent years, and it is also common.” Wang huaitao, a lawyer from Shanghai Xingu law firm, told the daily economic news that in February 2021, the CSRC issued the guidance on the application of regulatory rules – Information Disclosure of shareholders of enterprises applying for initial listing, which focused on restricting the concentration of market reactions such as equity holding on behalf of others and sudden participation in shares before listing.
What is the background of the two fund companies? The reporter noted that military electronics is one of the areas concerned by the executive partners of the two private equity funds. The executive partner of Zaozhuang Jielan is Shenzhen Qianhai JieChuang Capital Management Co., Ltd. (hereinafter referred to as JieChuang capital). According to the public information on the recruitment website, JieChuang capital has managed three funds and arranged a number of projects in the fields of military electronics, semiconductors, new materials and aviation. The executive partner of Xiamen Huiheng is Pingyang Huiheng Lihe Investment Management Co., Ltd. The recruitment website shows that after years of development, the company has formed three industrial ecosystems: new energy, military electronics and scientific and technological innovation.
The other shareholder who took a surprise stake was CLP financial investment, a wholly-owned subsidiary of China Electronics, the actual controller of Zhenhua scenery. China Electronics transferred all its shares of Zhenhua scenery to CLP financial investment free of charge. According to public data, CLP financial investment is positioned as China’s electronic asset management platform. By taking the lead in implementing the group’s major merger and reorganization projects and undertaking market value management, fund management and other functions, it has participated in a number of industry leading companies, including network security leading enterprise Qi An Xin Technology Group Inc(688561) , domestic “mother of chips” Huada Jiutian, etc.
The R & D expense rate of is lower than that of peers
Back to Zhenhua scenery’s main business itself, Zhenhua scenery is mainly engaged in the design, packaging, testing and sales of integrated circuits. Its products include a series of products such as signal chain and power manager, which is in the analog chip industry.
Through the sales growth of analog chip products such as amplifiers, the operating revenue of Zhenhua scenery increased steadily from 2018 to 2020 and the first half of 2021 (hereinafter referred to as the reporting period), which were 175 million yuan, 257 million yuan, 361 million yuan and 268 million yuan respectively.
The so-called analog chip is an integrated circuit used to process analog signals in the form of continuous functions such as sound, light and temperature. It is mainly used in military, communication, industrial control and other fields.
According to the data, from 2013 to 2020, the market scale of global analog integrated circuits increased from US $40.1 billion to US $54 billion, with an average annual compound growth rate of 4.34%.
As a company to be listed on the science and innovation board, what is the scientific research strength of Zhenhua scenery? The prospectus (application draft) shows that at present, the company has 58 patents and 57 registered exclusive rights in integrated circuit layout design. During the reporting period, the R & D investment was 22.0418 million yuan, 31.5696 million yuan, 42.2534 million yuan and 41.735 million yuan respectively, showing a steady growth trend.
However, the R & D expense rate of Zhenhua scenery is lower than the average of comparable companies. During the reporting period, the R & D expense rates of Zhenhua scenery were 5.23%, 5.39%, 6.84% and 5.36% respectively, while the industry average was 21.96%, 19.05%, 19.44% and 19.55%.
In this regard, Zhenhua scenery said that it is mainly because the company’s R & D personnel not only undertake the internal R & D responsibilities of the company, but also undertake a large number of R & D tasks of projects funded by the state. According to the proportion of R & D investment in the current operating revenue, the company’s R & D investment accounted for a relatively high proportion during the reporting period, which is at the same level as that of comparable companies.
The reporter of the daily economic news noted that the Sino foreign cooperation fee of Zhenhua scenery R & D fee fluctuates obviously. The outsourcing fee is mainly the film verification fee, testing fee and outsourcing design fee in the R & D process. During the reporting period, the company’s outsourcing fees were 4.0413 million yuan, 1.9893 million yuan, 5.8863 million yuan and 2.5935 million yuan respectively.
In order to understand the details, the reporter recently contacted Zhenhua scenery and sent interview questions, but received no reply.
(source: Daily Economic News)
