Xuyu Optoelectronics' IPO on the Science and Technology Innovation Board was accepted and raised 282 million yuan to build LED packaging devices and other projects

Recently, the Shanghai Stock Exchange officially accepted the IPO application of Xuyu Optoelectronics (Shenzhen) Co., Ltd. (hereinafter referred to as: Xuyu Optoelectronics) on the Science and Technology Innovation Board.

According to the information, Xuyu Optoelectronics is one of the first batch of specialized and innovative "little giant" enterprises recognized by the Ministry of Industry and Information Technology of China. Its main business is the research and development, production and sales of LED packaging devices. The company's products are widely used in home lighting, commercial lighting, industrial lighting, and educational lighting, as well as special application areas such as plant lighting, UV curing, UV disinfection and sterilization, industrial testing and ambient light sensor calibration.

Accounts receivable and inventory are both high

From 2017 to January-June 2020, Xuyu Optoelectronics achieved operating income of RMB 316 million, RMB 335 million, RMB 305 million and RMB 132 million, respectively, and the corresponding net profits were RMB 19.9884 million, RMB 20.5105 million, RMB 20.3522 million and RMB 16.2610 million, respectively.

Xuyu Optoelectronics said that the revenue growth in 2018 was mainly due to the substantial increase in sales of the company's innovative product, visible full-spectrum light sources; the revenue decline in 2019 was mainly due to the decline in operating income of general lighting sources. At the same time, in order to avoid vicious competition and maintain the sustainable development of innovative products, the company took the initiative to reduce sales to some low-profit customers, resulting in a decrease in revenue from visible full-spectrum light sources.

From the perspective of revenue season, Xuyu Optoelectronics' sales revenue accounted for a high proportion in the fourth quarter, and the company's inventory at the end of the year also increased accordingly based on orders and market conditions. At the end of 2017, the end of 2018, the end of 2019, and the end of June 2020, the book value of Xuyu Optoelectronics' inventory was RMB 75.5853 million, RMB 75.6895 million, RMB 62.6689 million, and RMB 60.0663 million, respectively, accounting for 27.19%, 34.77%, 29.68%, and 27.06% of current assets, respectively, and the inventory balance was high. If market demand changes or inventory management is improper in the future, the company may still face the risk of inventory impairment.

At the same time, its accounts receivable also showed a trend of year-on-year growth. At the end of 2017, the end of 2018, the end of 2019 and the end of June 2020, the book value of Xuyu Optoelectronics' accounts receivable was RMB 77.0444 million, RMB 83.2459 million, RMB 96.3509 million and RMB 95.2751 million, respectively, accounting for 27.71%, 38.24%, 45.63% and 42.91% of current assets, respectively.

In the future, as Xuyu Optoelectronics' business scale continues to expand, the company's above-mentioned operating characteristics will lead to a continued increase in the balance of accounts receivable at the end of the year. If the operating conditions of the company's main customers deteriorate or the company's collection measures are ineffective, there will be a risk of bad debts, which will have an adverse impact on the company's financial condition and business development.

Raised 282 million yuan to invest in LED packaging devices and other projects

According to the prospectus, Xuyu Optoelectronics plans to raise 282 million yuan to invest in semiconductor light-emitting innovative application device technology transformation projects, semiconductor light-emitting innovative application device R&D center projects and to supplement working capital.

Among them, the semiconductor light-emitting innovative application device technology transformation project is mainly used for the production line construction of product series including visible light full-spectrum LED, ultraviolet LED, infrared LED, LED for plant lighting, etc. The semiconductor light-emitting innovative application device R&D center project provides technical support for the technology upgrade and development, and production process transformation of general lighting, visible light full-spectrum LED, ultraviolet LED, infrared LED, LED for plant lighting and other product series.

In recent years, the demand for LED packaging devices in various industries in the field of innovative applications has promoted the widespread application of LED light sources in related fields. For example, photomedicine and sterilization in the biomedical field, ultraviolet curing in the industrial field, etc. have generated huge market demand for new LED devices; the demand for infrared LED light sources in urban night security, night rescue and disaster relief and other fields has also continued to grow; with the improvement of LED packaging technology and the improvement of the efficacy of related LED devices, the demand for LED packaging devices in the field of plant growth lighting has been stimulated again; people's increasing attention to health has led to a rapid increase in the penetration of visible light full-spectrum LED devices in education, home, hospital and public places. The increasingly broad market space has created good market opportunities for the technical upgrading of the products of this project and the enrichment of product types.

The semiconductor light-emitting innovative application device technology transformation project will, based on Xuyu Optoelectronics' accumulation of relevant core technologies, upgrade the company's existing LED devices in terms of technical indicators such as stability, light quality and transmittance, and enhance the scale effect of innovative product production capacity.

In addition, the semiconductor light-emitting innovative application device R&D center project is mainly based on the company's existing "Xuyu Advanced Semiconductor Materials Research Institute", "Postdoctoral Innovation Practice Base" and "Guangdong Province Environmentally Friendly Deep Ultraviolet LED Sterilization and Disinfection Engineering Technology Research Center" and other R&D platforms, to build a high-quality LED packaging technology R&D center in Bao'an District, Shenzhen, to further improve and enhance the high-quality LED packaging technology and production process R&D system, and conduct in-depth research on related technologies to provide strong technical support and quality assurance for the company's innovative application products. To this end, this project will increase the purchase of advanced R&D and testing equipment and expand R&D investment.

Regarding the future development strategy, Xuyu Optoelectronics said that the company will keep up with the development trend and update rhythm of high-end LED packaging technology and device production processes at home and abroad, and continuously improve the company's R&D capabilities and technical level in high-end LED packaging. At the same time, the company will target the shortage and gaps of LED devices in new application fields, rely on the core technology and process experience, and strive to expand the extended application in many professional fields such as intelligent lighting, educational lighting, industrial testing, curing, security, sterilization and disinfection, agricultural lighting, etc., accelerate the pace of new product development and industrialization, and with the help of the capital market, strive to become a leading LED device packaging and solution provider.