Shenzhen’s most famous maker company terminates IPO

“There is a group of people who don’t care about commercial value and just want to turn their ideas into reality—that is, makers.” This is the evaluation of an article introducing the story of SiDi Technology in Chuangye.com.

As China's "number one" maker, Pan Hao and the first company he founded, Silidi Technology, have many entrepreneurial myths. On December 6, the Shenzhen Stock Exchange disclosed its decision to terminate the review of Silidi Technology’s initial public offering of shares and listing on the GEM, which triggered a greater discussion.

High-profile open source hardware vendor

Pan Hao's entrepreneurial experience is widely praised by engineers.

Pan Hao was born in June 1983. He has loved tinkering since he was a child and enjoys the process of dismantling and reassembling things at home. While studying in college, he participated in various competitions and got an offer from Intel as soon as he graduated. For this reason, in July 2005, he gave up the opportunity of postgraduate study and entered Chengdu Intel to become a product engineer.

He did not continue doing this job, but left in August 2006. Thereafter, he served as the general manager of Beijing Beemster International Trading Co., Ltd. from March 2007 to April 2008.

In 2008, at a multimedia exhibition in Beijing, Pan Hao saw open source hardware for the first time and found that open source hardware could help non-technical artists quickly realize their own creativity, so he came up with the idea of ​​providing open source hardware and agile manufacturing for makers. Help various startups grow into entrepreneurial ideas for different hardware products.

In August 2009, Pan Hao's idea turned into reality and he founded Sidel Co., Ltd. and served as the chairman and general manager of Sidel Co., Ltd. from August 2009 to December 2015. From December 2015 to present, he serves as the chairman and general manager of the company.

So from 2009 to 2012, Sidel Technology established a modular and open source hardware module product system around the open source controller Arduino, directly serving developers around the world through its self-operated independent station, and providing supporting rapid prototype sample services for developers. Quickly verify R&D results.

In 2011, the company founded Shenzhen's first non-governmental organization of makers, Chaihuo Maker Space, to develop a maker community. By providing professional equipment for prototype development and an open collaboration environment, we help makers quickly realize the entire process of "product prototype - sample - small batch manufacturing - large batch manufacturing".

In 2012, the internationally renowned science and technology exchange event Maker Faire was introduced to China and the Maker Faire Shenzhen Maker Summit was held. It is one of the most influential international maker exchange events in China.

It is worth noting that the company’s chief technology officer (CTO) Miao Jianguo has a high school degree and has triggered discussions about “high school academics and folk gods”.

Judging from the past financing history of Silidi Technology, it has received financing from IDG Capital many times, and its valuation has increased 14 times.

What does Sidel Technology mainly do now? According to the prospectus, it is positioned as an innovative Internet of Things technology company. Its main business is the research and development, production and sales of edge computing hardware, network communication hardware, and intelligent sensing hardware, and provides various R&D auxiliary products and services.

The company has established cooperative relationships with upstream technology companies such as NVIDIA and Microchip to help their new technologies quickly form products and solutions and shorten the technology innovation application cycle. In the downstream industry, the company has gained recognition from well-known customers such as Schneider Electric and Analog Devices by virtue of its product R&D and design capabilities, high-quality products and comprehensive high-quality services accumulated over more than ten years. At the same time, the company has established partnerships with Avnet and Digitech We have established stable cooperative relationships with well-known electronic component distributors such as Electronics, Mouser Electronics, and Arrow Electronics.

At the same time, the company actively participates in industry associations and organizations to promote the development of industry ecology. The company joined the LoRaWAN® Alliance to build the LoRa IoT ecosystem with IoT industry leaders such as Amazon and Microsoft; the company cooperated with the Micro Machine Learning Foundation and jointly promoted lightweight edge machines with leading companies such as NVIDIA, Google, and STMicroelectronics Developments in learning technologies.

Currently, Silidi Technology is promoting an industrial Linux mini PC - "A203 Mini PC". The mini PC is based on the NVIDIA Jetson Xavier NX module, equipped with 8GB memory and 128GB SSD, and is pre-installed with JetPack 5.0.2SDK. Its SDK provides great help in developing AI solutions for manufacturing, logistics, retail, services, agriculture, smart cities, healthcare, life sciences and other fields on other Jetson hardware.

As the largest open source hardware manufacturer in China, Sidel Technology has maintained a high growth rate in revenue and net profit in the past three years. However, behind the high profit growth is that nearly 90% of its revenue comes from overseas markets, and many subsidiaries are insolvent. Silidi Technology has also been investigated for under-reporting revenue for many consecutive years and underpaying taxes. Last year, it also Being fined for violating the red line of customs supervision.

Overseas income accounts for more than 85%

The prospectus shows that Silidi Technology plans to raise approximately 775 million yuan. The main fundraising projects include ultra-low-power intelligent sensing system industrialization projects, new generation edge computing industrialization projects, R&D center construction projects, and supplementary working capital projects. During the reporting period, the company's R&D expenses were 24.9286 million yuan, 34.6262 million yuan, and 42.1831 million yuan respectively, accounting for 8.74%, 6.12%, and 5.63% of the operating income in the same period, respectively, while the industry averages were 10.64%, 9.31%, and 10.4%.

During the reporting period, Sidel Technology’s overseas revenue accounted for more than 85%, and the company’s overseas sales revenue accounted for a relatively high proportion. In terms of overseas revenue, the company's products are mainly sold to countries and regions such as North America, Europe, Japan and South Korea, among which North America and Europe are the company's most important product sales markets. Regarding the authenticity of foreign sales income and tax compliance, supervision has also inquired about Sidi Technology.

At the same time, Sidel Technology has been fined for tax evasion on many occasions. From 2012 to 2015, Silidi Technology was fined for under-listing operating income of 1.1058 million yuan, resulting in underpayment of corporate income tax, value-added tax, urban maintenance and construction tax, education surcharge and local education surcharge. During the same period, the company also paid wages through personal accounts and failed to fulfill its obligation to withhold and pay personal income tax, with less than 1.1714 million yuan in personal income tax.

In addition, on September 22, 2021, the Second Inspection Bureau of the Shenzhen Taxation Bureau of the State Administration of Taxation imposed a fine of 94,375.07 yuan on the company for underpaying value-added tax, urban maintenance and construction tax from 2012 to 2016, and underpaying corporate income tax in 2013. ; If the company fails to withhold personal income tax in the current period when the withholding obligation occurs, a fine of RMB 585,711.19 will be imposed.

The issuer’s core product is suspected to be a “mining machine”

It is worth noting that the Shenzhen Stock Exchange involved as many as 16 questions in the first round of inquiries, and the first one mentioned was whether the product involved "mining machines." In the first round of inquiry letters, the Shenzhen Stock Exchange launched a focused inquiry on whether the company's products involve "mining machines."

From 2021 to 2022, the company's LoRa gateway achieved sales revenue of 224 million yuan and 274 million yuan respectively, accounting for 39.50% and 36.54% of the current sales revenue respectively; its LoRa gateway products are mainly used in the American Helium Element Platform (The Helium Network). The platform introduces a blockchain incentive mechanism and issues tokens as rewards to gateway builders who participate in the construction and maintenance of shared networks.

It is reported that the official website of the Helium Elements Platform calls the platform a "mining" platform; its token HNT is traded on 14 exchanges around the world, including Binance, Open Sesame, and Currency. The products of Silidi Technology are mining machines; related hot mining machines It has coverage in China. At present, most domestic hot mining machines are idling, mainly to obtain token rewards.

Silidi Technology made it clear in its reply letter that “its gateway products do not substantially participate in the production and circulation of virtual currencies, and the issuer’s gateway products do not meet the definition of “mining machines” in relevant Chinese documents.” It also added, “Helium The Element Platform involves the production and issuance of the virtual currency HNT. The circulation link is undertaken by the virtual currency exchange. It is fundamentally different from traditional Bitcoin 'mining' in the generation principle of virtual currency. Its platform policy prohibits activities without network construction significance. The act of acquiring virtual currency does not belong to the virtual currency 'mining' platform."