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.
Suzhou Dongwei Semiconductor Co., Ltd
Suzhou Oriental Semiconductor Company Limited
(address: room 515, building 20, Northwest District, Suzhou nano City, No. 99, Jinjihu Avenue, Suzhou Industrial Park)
Initial public offering and listing on the science and Innovation Board
Letter of intent
Sponsor (lead underwriter)
(address: 27th floor and 28th floor, building 2, international trade building, No. 1, Jianguomenwai street, Chaoyang District, Beijing)
Issuer statement
Any decision or opinion made by CSRC and Shanghai Stock 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)
The number of shares issued this time is 1684409200 shares. The shareholders of the company do not offer shares to the public, and the new shares issued to the public account for 25% of the total share capital after this issuance.
The par value of each share is RMB 1.00
The issue price per share is RMB []
Expected issue date: January 24, 2022
Stock exchanges and plates to be listed Shanghai Stock Exchange science and Innovation Board
The total share capital after issuance is 67376367 shares
Sponsor (lead underwriter) China International Capital Corporation Limited(601995)
Signing date of the prospectus: January 14, 2022
Tips on major events
The issuer reminds investors to pay special attention to the following matters and risks of the company's issuance, and carefully read the text of the prospectus: I. special risk tips
The company reminds investors to pay special attention to the following risks in the "risk factors" and carefully read all the contents in "section IV Risk Factors" of this prospectus. (I) market competition risk
At present, China's power semiconductor industry is experiencing a rapid development stage. With the vigorous development of China's consumer electronics, automotive electronics, industrial electronics and other industries, as well as the rise of emerging fields such as intelligent equipment manufacturing, Internet of things and new energy, China's demand for power semiconductor products has expanded rapidly, which has promoted the rapid development of the industry. The good prospect has attracted many Chinese enterprises to enter this field. Manufacturers in the industry are actively expanding the market on the basis of consolidating their own advantages, and the market competition is intensifying. In the increasingly fierce market competition environment, if the company can not correctly grasp the market dynamics and industry development trend, and can not timely upgrade technology and improve product performance and service quality according to customer needs, the company's industry status, market share and business performance may be adversely affected.
In the field of power devices for high-performance industrial and automotive related applications, the company currently has a relatively low market share in the world and China, and the main market share is still occupied by large foreign manufacturers. According to the calculation of omdia data, the global market scale of high voltage superjunction MOSFET is expected to be US $940 million in 2020, and the company's market share is 3.8%; In 2020, the market scale of China's high voltage super junction MOSFET is estimated to be about US $420 million, and the company's market share is 8.6%. In terms of medium and low voltage MOSFET market, the global market scale of medium and low voltage MOSFET products in 2020 was US $5.24 billion, and the company's market share was 0.2%; In 2020, the market scale of China's medium and low voltage MOSFET products was US $2.41 billion, and the company's market share was 0.4%. On the whole, the market share of the company is still at a low level.
Compared with consumer customers, customers in industrial and automotive related fields have higher requirements for product performance and quality, and the verification cycle is generally longer. If the company's product design, process upgrading or customer resource development progress does not meet expectations, it will be in a disadvantageous position in the competition with large foreign manufacturers. For example, the automotive field has high requirements for the performance and stability of power devices, and the product verification cycle is long. Therefore, when entering such new application fields, the company may face the risk of product performance verification failure or product performance inferior to competitors and unable to obtain orders. If the above situation occurs, it will have an adverse impact on the issuer's expansion of new application fields and improvement of market competitiveness, and further affect the issuer's performance. (II) risk of high concentration of suppliers
The company is not directly engaged in wafer manufacturing, packaging testing and other production and processing links.
During the reporting period, the company's top five suppliers mainly purchased wafers and packaging test services. The total purchase amount accounted for 99.56%, 99.29%, 99.01% and 97.73% of the total purchase amount of the current period respectively, of which the purchase amount from the largest supplier accounted for 83.59%, 81.70%, 80.19% and 72.85% of the total purchase amount of the current period respectively.
During the reporting period, with the continuous expansion of downstream demand and the negative impact of covid-19 epidemic on the production capacity of the global wafer foundry industry, the wafer foundry industry generally had a production capacity shortage, which further led to the growth of wafer prices. Due to the high concentration of the company's wafer suppliers, if the capacity shortage in the wafer foundry industry is further exacerbated, the capacity and supply of the wafer foundry may not meet the needs of the issuer, which will have a certain adverse impact on the company's product shipments and future revenue growth. On the other hand, the company's operating costs are mainly composed of material costs and sealing and testing expenses, of which the material costs are mainly wafer costs. If the wafer price continues to increase in the future, it may have an adverse impact on the company's main business costs and gross profit margin. (III) risk of downstream demand fluctuation
During the reporting period, the company's main business income was 152.8352 million yuan, 196.0466 million yuan, 308787400 yuan and 320.8243 million yuan respectively, maintaining a sustained and rapid growth; The net profits attributable to the owners of the parent company were 12.9743 million yuan, 9.101 million yuan, 27.6832 million yuan and 51.8053 million yuan respectively, which also maintained a rapid growth trend. The company's main products include high-voltage super junction and medium and low-voltage shielded gate MOSFET products, which are widely used in downstream industries such as charging pile, fast charger, motor drive, photovoltaic inverter and so on. The continuous growth of the company's performance during the reporting period was mainly affected by the growth of downstream terminal demand, import substitution and other factors. In order to enhance the company's technical advantages and maintain the competitiveness of products, the company continues to increase R & D investment and expand the scale of personnel. However, the semiconductor industry has strong cyclical characteristics, which is also closely related to the overall development of macro-economy. If the macro-economy fluctuates greatly or is at a low point for a long time, the market demand of the semiconductor industry will also be affected. Therefore, if the development of downstream industries driving the company's revenue growth, such as new energy vehicles, 5g communications and photovoltaic, does not meet expectations, the growth rate of industry scale slows down or declines, the import substitution trend of China's semiconductor power device industry slows down, the company's R & D progress and achievements do not meet expectations, or there are large fluctuations in macroeconomic development, The company will face the risk that its performance cannot continue to maintain the rapid growth achieved in the reporting period.
In addition, from the perspective of the industrial chain, due to the relatively complex structure of downstream end products and the highly specialized division of labor in the industrial chain, the launch of end products often requires the close cooperation of the whole industrial chain. If there is a shortage of goods in a link of the industrial chain in the future, the production plan of the terminal manufacturer may stagnate periodically, or it may be forced to postpone the release of new products, The above may affect the overall procurement demand, and then adversely affect the industrial chain companies including the company. (IV) risk of gross profit margin fluctuation
During the reporting period, the company's comprehensive gross profit margin was 26.38%, 14.93%, 17.85% and 26.75% respectively, with large fluctuations. The company's comprehensive gross profit margin is affected by factors such as product selling price, product cost and product structure. With the development of industry technology and the intensification of market competition, the company needs to continuously carry out iterative upgrading and innovation of technology according to the market demand. If the company fails to correctly judge the change of downstream demand, or the company's technical strength stagnates, or the company fails to effectively control the product cost Or changes in the market competition pattern of the company's products will lead to adverse situations such as unexpected fluctuations in product prices and costs. Under such adverse circumstances, the company's comprehensive gross profit margin may continue to fluctuate or even decline in the future, which will bring certain risks to the company's operation. In addition, the company has a large number of product specifications, and the change of product sales structure of different specifications will also affect the company's gross profit margin.
Specifically, the issuer's fabless business model outsources the production and manufacturing links, and the gross profit margin level is affected by the wafer foundry cost. Therefore, the fluctuation of the wafer foundry price caused by the prosperity of the industry and the abundant capacity of the wafer foundry industry will affect the issuer's gross profit margin level. At the same time, the wafer foundry industry has the characteristics of heavy assets, large capital investment and long production capacity release cycle. The sales price of wafers fluctuates periodically affected by the prosperity of the industry. Among them, as the upstream supplier of the issuer, the industry concentration of the wafer foundry is higher than that of the downstream industry of the issuer. Under the condition of tight wafer foundry capacity, the wafer foundry has strong bargaining power and transmission capacity.
Compared with comparable companies, the issuer's business scale is smaller and its bargaining power with upstream suppliers and downstream customers is relatively weak. In addition, the issuer's main industrial customers are characterized by high stickiness and low bargaining frequency. Therefore, if the company's purchasing cost continues to rise due to the tight production capacity of upstream such as wafer foundry and packaging test, the company's gross profit margin will be affected if the timeliness of transmitting the impact of upstream wafer price changes to downstream customers is low
Profit impact. Under the influence of the above factors, the company's comprehensive gross profit margin may continue to fluctuate or even decline in the future, which will bring certain risks to the company's operation. (V) risk of single product structure
During the reporting period, the company achieved large-scale sales of MOSFET products, including high-voltage super junction MOSFET and medium and low-voltage shielded gate MOSFET. During the reporting period, the sales revenue of MOSFET products accounted for more than 99% of the main business revenue, of which the high-voltage superjunction MOSFET products accounted for 81.48%, 80.28%, 80.66% and 74.55% respectively, and the revenue of single product category accounted for a relatively high proportion. It takes a certain period of time for the company to develop new products and finally realize large-scale sales. If the growth rate of demand for MOSFET products in the downstream market slows down in a short time, it will have an adverse impact on the company's revenue and profitability.
At the same time, considering that the third generation semiconductor material power devices may be one of the components of high-performance power devices in the future, if the company cannot achieve further technological breakthroughs in the existing power device products in the future, or develop the third generation semiconductor material power devices with market competitiveness, the growth of the company's sales revenue may slow down, Adversely affect the company's operating performance. (VI) risk of new product development falling short of expectations
The R & D cycle of the semiconductor industry is long and the process is complex. The product technology renewal iteration needs continuous resource investment. In the next few years, the company will continue to invest in the technical development of new MOSFET, IGBT and other power devices. Due to the long cycle of R & D projects in the semiconductor industry, there are certain uncertainties in relevant R & D projects. If the progress and effect of R & D projects do not meet the expectations, or the new technologies or products developed do not have commercial value, a large amount of R & D investment will affect the operating performance of the company; If the company's future R & D capital investment is insufficient, the company's existing technology may be overtaken or replaced, resulting in the decline of the market competitiveness of the company's existing products and adverse impact on the company's future business development.
As of June 30, 2021, the issuer had 31 R & D personnel in total, accounting for 46% of its employees. The R & D Department of the issuer consists of product R & D engineering department and Application Technology Department, which respectively focus on the R & D of new devices and the implementation and auxiliary work in the R & D process. Issued at the end of the reporting period
