PCB manufacturer Benchuan Intelligent's GEM IPO was successfully approved

On January 13, the results of the 3rd review meeting of the GEM Listing Committee in 2021 showed that the initial public offering of Jiangsu Benchuan Intelligent Circuit Technology Co., Ltd. (hereinafter referred to as "Benchuan Intelligent") met the issuance conditions, listing conditions and information disclosure requirements.

At the same time, the GEM Listing Committee further raised major inquiries, including that the overseas business revenue accounts for a relatively high proportion, please explain the impact of the overseas epidemic on future operating income and gross profit margin; the transaction in which Li Peng transferred all of his shares in Dongguan Huatuo was completed in September 2019, please explain: (1) the rationality of Zhang Da, who holds 55% of the shares of Dongguan Huatuo on behalf of Li Peng, still serving as the executive director, manager and legal representative of Dongguan Huatuo; (2) the actual impact of Li Peng on the production and operation of Dongguan Huatuo.

Tianyancha data shows that Benchuan Intelligence was established on August 23, 2006 with a registered capital of 57.9737 million yuan. It is committed to providing small-batch printed circuit board products and solutions to the market, and specializes in the research and development, production and sales of printed circuit boards.

It is understood that its products are mainly sold to China, the United States, Japan, Europe, Australia and other places, and it has a deep layout in application fields such as communication equipment, industrial control, and automotive electronics.

In the field of communication applications, Benchuan Intelligent has been keeping up with the development trend of PCB technology for base station antennas since the 3G era, and has a strong competitive advantage in the industry. The products are currently mainly used in base station equipment such as 5G NMR Massive MIMO antenna systems, 5G micro base station integrated systems, 5G mmWave wireless transmission systems and 5G dielectric filters.

In the field of automotive electronics, Benchuan's intelligent products are mainly used in body electronic systems, main control modules of new energy vehicles, and battery management systems.

Benchuan Intelligent, which has a deep layout in multiple fields, has established stable cooperative relationships with many leading companies in downstream industries. In the past three years, Benchuan Intelligent's main customers include Tongyu Communication, Comba Communication, Amphenol, Guoren Communication, Luxshare Precision, Rice Information and other well-known domestic and foreign communication equipment manufacturers; in the field of automotive electronics, Benchuan Intelligent also has customers such as Guibo New Energy, Sunny Optical and Guoxuan High-tech.

Stable customers have brought it rich performance returns. From 2017 to 2019, Benchuan Intelligence achieved operating income of 299 million yuan, 372 million yuan and 466 million yuan, respectively, with a compound growth rate of 24.65%; the net profit attributable to the parent company's shareholders was 25.1181 million yuan, 47.0152 million yuan and 67.2969 million yuan, respectively, with a compound growth rate of 63.68%.

Despite good profitability, Benchuan Intelligence still has deficiencies in indicators related to operating capacity, such as accounts receivable turnover rate and inventory turnover rate. From 2017 to 2019, the book value of Benchuan Intelligence's accounts receivable was RMB 71.129 million, RMB 119 million, and RMB 167 million, respectively, accounting for 39.37%, 46.56%, and 45.15% of current assets, respectively, showing an overall upward trend.

In addition to accounts receivable, Benchuan Intelligent's inventory ratio is also high. From 2017 to 2019, the book value of Benchuan Intelligent's inventory was RMB 65.1465 million, RMB 55.2709 million and RMB 53.1460 million, respectively, accounting for 36.06%, 21.62% and 14.39% of current assets in the current period. With the fluctuation of inventory market prices, there is a risk of inventory depreciation losses.

In addition, Benchuan Intelligent's current output of printed circuit boards is 487,300 square meters, with a capacity utilization rate of 89.3%. Under the current low capacity rate, it will still expand its capacity. After listing, it plans to raise funds to invest in the construction of a high-frequency, high-speed, multi-layer and high-density printed circuit board production line project with an annual output of 480,000 square meters. After reaching full capacity, Benchuan Intelligent's capacity will nearly double.