Huawei/vivo/Xiaomi supplier Xinhai Technology's IPO application on the Science and Technology Innovation Board has been accepted

On March 31, the Shanghai Stock Exchange officially accepted the application of Xinhai Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Xinhai Technology") for listing on the Science and Technology Innovation Board.

Core technology: high-precision ADC technology and high-reliability MCU technology

According to the prospectus, Xinhai Technology is a full signal chain chip design company integrating perception, computing, and control, focusing on the research and development of high-precision ADC, high-performance MCU, measurement algorithms, and one-stop solutions for the Internet of Things. Adopting a fabless business model, its chip products are widely used in smart health, pressure touch, smart home perception, industrial measurement, general microcontrollers, and other fields. The company's main business structure is shown in the figure below:

Xinhai Technology's current core technologies are high-precision ADC technology and high-reliability MCU technology.

China is weak in the field of high-precision ADC design and has always been monopolized by foreign countries. In 2007, Xinhai Technology launched the 24-bit low-speed high-precision ADC chip CS1242 in China, with an effective number of 21 bits, breaking the pattern of China's mid-to-high-end weighing instrument chip market being monopolized by foreign countries and relying entirely on imports. In 2011, Xinhai Technology launched the 24-bit low-speed high-precision ADC chip CS1232, which has reached 23.5 effective bits and a resolution of more than 1 in 10 million, reaching a relatively high level in the industry among similar chips, and is currently at the leading domestic and international advanced level.

Based on the low-speed high-precision ADC chip, Xinhai Technology has also become the first in the industry and the only company in the world to use micro-pressure strain technology and mass-produce pressure touch SoC chips, and has independently innovated in pressure touch chip technology. The pressure touch SoC chip was taped out in 2016, and mass-produced and generated revenue in 2017. It is currently mainly used in pressure touch screens, pressure-sensitive Home keys, and edge key replacements. It has been mass-supplied to Meizu flagship models (M15/16X/16/16Plus/16s/16sPro/Zero), Vivo models (Apex series/NEX3/NEX3s/iQOO series), Xiaomi flagship models (Xiaomi 8 transparent exploration version), 8848 models (M5/M4), Nubia z20 and other smartphones. At the same time, the world's first surround screen concept machine Xiaomi MIXAlpha and OPPO's first full-screen concept machine with under-screen camera also use Xinhai Technology's pressure touch solution.

Xinhai Technology's MCUs are mainly 8-bit MCUs and 32-bit MCUs. Currently, 8-bit MCUs are mainly used in small household appliances, electronic toys, and some mid- and low-end automotive electronic products; 32-bit MCUs are mainly aimed at high-end applications. In 2018, the company launched the first domestic USB PD3.0 32-bit MCU chip, which is mainly used in the field of fast power charging.

Based on a deep understanding of low-speed, high-precision ADC technology and high-reliability MCU technology, Xinhai Technology has mastered the full signal chain chip design technology and developed a one-stop service solution integrating smart IC + intelligent algorithm, cloud platform, artificial intelligence, and big data. It has established close cooperation with well-known end customers such as Huawei, Vivo, Xiaomi, Meizu, Midea, Haier, Xiangshan Scale, and Lepu Medical.

In addition, Xinhai Technology's infrared forehead thermometer chip solution has been shipped on a large scale and can be adapted to ten sensor manufacturers including Germany's Heimann, Taiwan's SmartGen, Amphenol, GE, TE, Senba, Shanghai Gefit, Weisheng, and Meisi Advanced, to assist in the research and development and production of key epidemic prevention materials and actively fulfill social responsibilities.

Performance has grown steadily for three consecutive years

The prospectus disclosed that in 2017, 2018 and 2019, Xinhai Technology's operating income was RMB 163.9477 million, RMB 219.2963 million and RMB 258.4064 million, respectively, and its net profit in the same period was RMB 20.5123 million, RMB 20.5939 million and RMB 41.8948 million, respectively.

Chipsea Technology's chip products can be divided into smart health chips, pressure touch chips, industrial measurement chips, smart home sensing chips and general microcontroller chips. During the reporting period, the composition of Chipsea Technology's sales revenue is as follows:

In terms of R&D investment, during the reporting period, Xinhai Technology's R&D expenses were RMB 40.1966 million, RMB 41.1569 million and RMB 51.0861 million, respectively, accounting for 24.52%, 18.77% and 19.77% of operating income, respectively, which is a high proportion.

As of the end of the reporting period, Xinhai Technology owned 6 core technologies, 172 patents, 134 software copyrights and 27 integrated circuit layout designs.

In terms of customers and suppliers, Xinhai Technology's customers have been relatively stable in the past three years. Its main customers include Shenzhen Xicheng Weike Electronics Co., Ltd., Shanghai Yaoxun Industry and Trade Co., Ltd., Shenzhen Quanzhixin Technology Co., Ltd., Shenzhen Weishengkang Technology Co., Ltd., Shenzhen Penglida Electronics Co., Ltd., etc.

In 2017, 2018 and 2019, Xinhai Technology's main suppliers were Shanghai Huahong Grace Semiconductor Manufacturing Co., Ltd., Tianshui Huatian Technology Co., Ltd., GLOBALFOUNDRIESINGAPOREPTE.LTD, etc.

The Science and Technology Innovation Board IPO raised 545 million yuan

Xinhai Technology plans to publicly issue no more than 25 million A-share common shares. The funds raised will be invested in high-performance 32-bit series MCU chip upgrade and industrialization projects, pressure touch chip upgrade and industrialization projects, and smart health SoC chip upgrade and industrialization projects.

Xinhai Technology stated that this fundraising and investment project is closely centered around the company's existing main business, aiming to further enhance the company's independent research and development capabilities, promote product iteration and technological innovation, expand the scale of the company's main business, and enhance core competitiveness and market share.

Regarding the company's development goals, Xinhai Technology stated that in the future, the company will continue to adapt to the development trends of emerging application fields such as the Internet of Things, artificial intelligence, automotive electronics, and medical industrial control based on downstream market demand, give full play to its own R&D and design advantages in the chip field, and continue to launch market-competitive chips and solutions. Improve product brand awareness, expand application areas and downstream customer coverage, consolidate the company's market position in the chip design field, and increase chip market share and competitiveness in segments such as perception measurement and artificial intelligence, and become an industry-leading integrated circuit design company.

Xinhai Technology said that its development goal for the next three years is to further expand the scale of the company's main business and enhance its core competitiveness and market share through continuous R&D and innovation. In the field of MCU chips, the company will focus on customer needs, complete the upgrade and industrialization of high-performance 32-bit series MCU chips in the next three years, provide customers with low-power, high-performance, high-security, and high-reliability MCU chip products, and continue to increase market share; in the field of pressure touch, the company will cater to the technical needs of the human-machine tactile interaction market segment, continue to upgrade pressure touch chips, and promote pressure touch technology to headset communications, improve user experience, consolidate the company's market leadership in the segment and open up new application markets; in the field of smart health, the company integrates bio-signal processing SoC chips, high-performance analog front-end AFE and BLE Bluetooth communication modules, and launches a new generation of smart health measurement chips with higher integration, keeping up with the industry's technological development and the direction of downstream demand changes.