Securities code: 600703 securities abbreviation: Sanan Optoelectronics Co.Ltd(600703) San'an North Electro-Optic Co.Ltd(600184) Co., Ltd
And
Citic Securities Company Limited(600030)
about
Reply to the feedback on the application documents for non-public offering of A-Shares in 2021
(Revised Version)
Sponsor (lead underwriter)
January, 2002, North block, excellence Times Plaza (phase II), No. 8, Zhongxin Third Road, Futian District, Shenzhen, Guangdong Province
China Securities Regulatory Commission:
According to the requirements of the notice of the CSRC on the first feedback on the examination of administrative licensing projects (No. 213195) (hereinafter referred to as the "feedback") issued by your commission on December 14, 2021, San'an North Electro-Optic Co.Ltd(600184) Co., Ltd. (hereinafter referred to as " Sanan Optoelectronics Co.Ltd(600703) ", "company", "applicant" or "issuer") together with Citic Securities Company Limited(600030) (hereinafter referred to as " Citic Securities Company Limited(600030) " or "sponsor"), China audit Zhonghuan Certified Public Accountants (special general partnership) (hereinafter referred to as "applicant accountant" and "accountant") Shanghai jintiancheng law firm (hereinafter referred to as "applicant's lawyer" and "lawyer") and other relevant parties have verified and answered the listed questions one by one according to the feedback requirements. The answers to the questions in the feedback are as follows. Please review them.
explain:
1. Unless otherwise specified, all values in this feedback reply shall be kept to two decimal places. If the sum of the values of each sub item is inconsistent with the mantissa of the total, it is caused by rounding.
2. Unless the context otherwise requires, the interpretation used in this feedback reply is consistent with the due diligence report on non-public development of A-share shares of San'an North Electro-Optic Co.Ltd(600184) Co., Ltd. in 2021.
3. The font in this feedback reply represents the following meanings:
Questions listed in the feedback in bold (not bold)
Song typeface (bold, not bold) reply to the questions listed in the feedback
Supplement and revision of the responses to the questions listed in the feedback in italics (BOLD)
catalogue
Question 1 3 question 2 34 question 3 49 question 4 59 question 5 64 question 6 79 question 7 95 question 8 105 question 9 114 question 10 132 question 11 147 question 12 152 question 13 154 question 14 161 question 15 one hundred and sixty-nine
Question 1
The applicant intends to raise no more than 7.9 billion yuan for "mini / micro display industrialization project of Hubei Sanan Optoelectronics Co.Ltd(600703) Co., Ltd." and "supplementary working capital". The applicant is requested to supplement: (1) explain the feasibility of the mini / micro display industrialization project in combination with the R & D team, technical reserves, market foundation, comparison of advantages and disadvantages of main competitors, etc; (2) The relationship between this raised investment project and the previous raised investment project, explain the rationality of the scale of new capacity in combination with capacity utilization and production and marketing rate, explain the digestion measures of new capacity in combination with orders in hand, intentional contracts, market space and market competition, and whether there is repeated construction; (3) The detailed arrangement of the specific investment amount of the raised investment project, the calculation basis and process of the investment amount, whether each investment composition belongs to capital expenditure and whether the raised funds are used; (4) The current progress, expected schedule and expected use progress of the raised investment project, and whether there is any situation of replacing the investment before the board of directors; (5) The basis and process of benefit calculation of raised investment projects, and the prudence and rationality of benefit calculation. The recommendation institution is requested to give verification opinions.
reply:
1、 The feasibility of the mini / micro display industrialization project is explained in combination with the R & D team, technical reserves, market foundation, comparison of advantages and disadvantages of main competitors, etc
(I) R & D team
The company has long attached great importance to the talent training and team construction of the R & D team. The R & D team meets the company's development strategic objectives and market development needs. As a nationally recognized postdoctoral scientific research workstation and national enterprise technology center, the company has successively established R & D centers in the United States, Sweden, Japan and other countries around the world. It has a technical R & D team composed of top talents in the field of compound semiconductors. The postdoctoral scientific research station has gathered a group of top experts in the field of LED at home and abroad, and its R & D ability ranks in the forefront of the industry. At the end of each reporting period, the number of R & D personnel of the company was 1752, 2099, 2602 and 2857 respectively, accounting for 15.36%, 17.33%, 18.62% and 16.55% of the total number of the company respectively. The scale of R & D team continued to grow.
In terms of mini / micro led, the company has established a research and development team with excellent professional background and rich industry experience led by senior executives such as Dr. Zhang Zhongying, Dr. Zhang Hongzhang and Dr. Xu ChenKe, bringing together top talents in the field of mini / micro led at home and abroad, including senior engineers with many years of research and development experience, It also includes technicians with rich experience in front-line production, with diversified and complementary professional backgrounds, which provides a solid talent foundation for the company's continuous innovation and technological breakthrough in the field of mini / micro led, so as to further ensure the smooth implementation of this raised investment project.
(II) technical reserve
As the largest and leading full-color ultra-high brightness LED epitaxy and chip industrialization production enterprise in China, the company has formed a deep technical accumulation, and its core technology and R & D capability have reached the international advanced level. The company has won the first prize of the national science and technology progress award, the second prize of the national science and technology progress award, the Chinese patent Excellence Award, the national high-tech industrialization demonstration project, the national recognized enterprise technology center, the national technological innovation demonstration enterprise, a number of provincial and municipal scientific and technological progress awards, and its R & D technical strength has been widely recognized.
In terms of mini / micro led, as one of the enterprises that entered China earlier and continued to layout, after years of development and precipitation, the company has made a breakthrough in the core technology and process technology of mini / micro LED products, and mastered the core technologies such as flip chip structure, ultra-high uniformity, large-scale epitaxial mass production, large-scale transfer, large-scale welding and high brightness optical design, Based on this, we independently developed 50-300 μ M Size Mini LED chip and 10-50 μ M-Size micro LED chips have been widely recognized by customers in terms of performance, reliability and stability.
In addition, the company attaches great importance to the construction of intellectual property management system. It is a national intellectual property advantage enterprise and a national intellectual property demonstration enterprise recognized by the State Intellectual Property Office; By the end of September 2021, the company has more than 2700 patents (including applications), including more than 200 in the field of mini / micro led, which is at the leading level in China's LED chip industry. Through long-term patent layout, the company has formed an intellectual property moat to provide effective protection for the company's products to the global market.
(III) market basis
As a new generation of core display technology, mini / micro LED has excellent characteristics such as high display effect, low power consumption, high integration, high technology life and so on. After several years of accumulation, mini / micro LED has entered the stage of accelerated penetration, multi brands have accelerated the layout of mini / micro led, and relevant products have been launched one after another. Apple launched the first iPad Pro equipped with mini led in April 2021, and launched the MacBook Pro with mini LED backlight technology in October 2021; SKYWORTH launched a new generation of large-size high-end Mini LED TV q72 in September 2021, integrating 20736 Mini led beads; Huawei released the first mini led smart screen product "Huawei smart screen V 75 super" in July 2021, with 46080 super mini LEDs; Samsung
In 2018, the commercial display screen of micro led was launched for the first time, and a new micro LED TV was launched in December 2020; Philips, TCL, Lenovo, Xiaomi, Konka, Hisense and LG have all launched TV, computer and other products of mini LED backlight series. With the acceleration of commercialization, mini / micro LED is expected to usher in explosive growth.
According to the prediction of LED inside, mini / micro LED will become the main driver of LED application market growth in the next five years. According to arizton's statistics and prediction, the global Mini LED market will reach 150 million US dollars in 2021, with a year-on-year increase of 148%; It is expected to rise to USD 2.322 billion in 2024, and the CAGR from 2020 to 2024 is 147.92%. According to trendforce statistics and prediction, the global output value of micro LED TV chips will reach US $3.4 billion in 2025, and the CAGR will reach 250% from 2021 to 2025. Mini / micro LED has a broad market space, which lays a good market foundation for the implementation of the project.
(IV) comparison of main competitors
1. Major competitors
As the core of the new generation of display technology, mini / micro LED has obvious technical performance advantages and will become an important trend in the next round of LED technology development. Therefore, all parties in the LED industry chain have laid out Mini / micro led. In the chip sector, on the one hand, mini / micro LED chips have high technical barriers and greater requirements for R & D and equipment investment. On the other hand, mini / micro led end customers are mainly large consumer electronics manufacturers, with higher requirements for product performance, consistency, stability and capacity guarantee. Leading enterprises have more strength to enter relevant supply chains. Therefore, there are relatively few enterprises that can realize mass production and large-scale shipment of mini LED chips, and enterprises with corresponding customer resources, stable yield and capacity guarantee are more scarce. At present, the main enterprises in the mini / micro LED chip link include the company, Taiwan Fucai (former wafer Optoelectronics), Seoul semiconductor of Korea and relevant enterprises engaged in the production of related products in China.
2. Competitive advantage
(1) Talent reserve advantage
The company has long attached great importance to the talent training and team construction of the R & D team, and has a competitive advantage in talent reserve. For details, see "(I) R & D team" in "question 1" of this reply: "I. explain the feasibility of mini / micro display industrialization project in combination with the R & D team, technical reserve, market foundation, comparison of advantages and disadvantages of main competitors".
(2) R & D investment and technical advantages
Since its establishment, the company has attached great importance to independent scientific and technological innovation and maintained high R & D investment for a long time. In 2018, 2019 and 2020, the R & D investment of the company and listed companies in the same industry is as follows:
Unit: 10000 yuan
Period project Hc Semitek Corporation(300323) Xiamen Changelight Co.Ltd(300102) Focus Lightings Tech Co.Ltd(300708) average Sanan Optoelectronics Co.Ltd(600703)
R & D investment 15295.55 9085.95 6132.92 10171.47 92995.75 2020 operating revenue 264413.30 131571.98 140667.42 178884.23 845388.28
R & D investment accounts for 5.78%, 6.91%, 4.36%, 5.69% and 11.00% of operating revenue
R & D investment 21468.65 11146.51 4565.10 12393.42 64847.842019 operating revenue 271633.05 103924.08 114320.55 163292.56 746001.39
The proportion of R & D investment in operating income is 7.90%, 10.73%, 3.99%, 7.59%, 8.69%
R & D investment 18392.55 8538.73 4671.72 10534.33 80650.88 2018 operating income 273158.81 102956.20 55871.89 143995.63 836437.42 year
R & D investment accounts for 6.73%, 8.29%, 8.36%, 7.32% and 9.64% of operating revenue
Data source: annual report of Listed Companies in the same industry.
As shown above, the amount of R & D investment and the proportion in operating revenue of the company are significantly higher than those of Listed Companies in the same industry. Through the high attention and continuous investment in R & D and technological innovation, the company has formed a profound technological accumulation and formed a competitive advantage in terms of technical strength. See details
