Loongson Technology's IPO on the Science and Technology Innovation Board was accepted, raising 3.5 billion yuan, mainly for high-performance graphics chips

At present, the Shanghai Stock Exchange has officially accepted the IPO application of Loongson Technology Co., Ltd. ("Loongson" for short) on the Science and Technology Innovation Board. At the same time, Loongson's IPO prospectus (submission draft) was also officially disclosed. It is reported that Loongson plans to issue no more than 41 million shares on the Science and Technology Innovation Board, and the proportion of the total share capital after issuance will not be less than 10%. This issuance does not involve public offering by shareholders, and the total amount of funds to be raised is 3.5 billion yuan.

The "Loongson" series is one of the earliest general-purpose processor series developed in my country. It began to be developed in the Institute of Computing Technology of the Chinese Academy of Sciences in 2001, and has received strong support from the Chinese Academy of Sciences, 863, 973, and core high-tech projects, and has accumulated ten years of core technology. In 2010, Loongson Zhongke was officially established and began market-oriented operations to industrialize the research and development results of Loongson processors.

From 2018 to the end of 2020, the company's operating income was RMB 193.245 million, RMB 485.629 million and RMB 1,082.321 million, respectively, with a compound growth rate of asset scale and revenue scale of 73.79% and 136.66%, respectively. Net profits were RMB 7.753 million, RMB 192.288 million and RMB 72.237 million, respectively.

As of the end of 2020, the company had a total of 647 employees, including 425 core technical personnel and other R&D personnel, accounting for more than 65% of the total employees. Before the IPO, Hu Weiwu, chairman and general manager of Loongson Technology, held 11.43% of the shares. He and his wife Jin Hong together controlled 33.61% of the voting rights of Loongson Technology, making them the joint actual controllers. (Wen Meng)

The following are the main contents of the prospectus:

　　According to the prospectus, the company's business scale continues to grow rapidly. At the end of 2018, the end of 2019, and the end of 2020, the company's total assets were 548.4191 million yuan, 1179.6348 million yuan, and 1656.3173 million yuan, respectively, and its operating income was 193.2450 million yuan, 485.6293 million yuan, and 1082.3210 million yuan, respectively. The compound growth rate of asset scale and revenue scale reached 73.79% and 136.66%, respectively. Net profits were 7.753 million yuan, 192.2883 million yuan, and 72.2374 million yuan, respectively.

　　During the reporting period, benefiting from the technology premium and independent innovation advantages, the company's main business comprehensive gross profit margin was 62.55%, 57.16% and 48.68% respectively, maintaining a high level. However, as a technology-intensive enterprise, Loongson Zhongke's R&D investment in each period during the reporting period was RMB 74.5546 million, RMB 78.2139 million and RMB 208.4441 million, and R&D investment continued to increase, accounting for 38.58%, 16.11% and 19.26% of revenue respectively. The company faces the risk of long-term high investment and difficulty in ensuring market stability.

　　Benefiting from the encouragement and support of the national industrial policy for the integrated circuit design industry, the company has undertaken a number of major national and local scientific research projects. During the reporting period, the government subsidies included in the company's current income were RMB 6,055,800, RMB 91,862,600 and RMB 28,846,300, accounting for 85.83%, 44.95% and 29.76% of the total profit for the period, respectively.

　　龙芯中科表示，如果公司未来不能持续获得政府补助或政府补助显著降低，则可能会对公司盈利产生一定的不利影响。

　　According to reports, the total amount of funds to be raised in this IPO is 3.5 billion yuan, of which 1.25 billion yuan will be invested in advanced process chip research and development and industrialization projects; 1.05 billion yuan will be invested in high-performance general-purpose graphics processor chip and system research and development projects; and 1.2 billion yuan will be invested to supplement working capital.