Communications chip supplier Chuangyao Technology was listed on the Science and Technology Innovation Board today, with its share price rising by nearly 28%

On January 12, Chuangyao Technology was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. The company's stock code is 688259, the issue price is 66.6 yuan per share, and the issue price-earnings ratio is 83.65 times. The stock price on the first day of listing increased by nearly 28%. As of press time, it was reported at 85.01 yuan per share, with a total market value of 6.801 billion.

According to the data, Chuangyao Technology was founded in 2006. Since its establishment, it has focused on the research and development of core communication chips and has accumulated profound experience in platform technologies such as physical layer communication algorithms and software, analog circuit design, digital-analog hybrid large-scale SoC chip design and layout design. Due to the commonality of communication technologies, Chuangyao Technology can flexibly apply the existing platform technologies to multiple application fields in combination with market demand.

At present, Chuangyao Technology has successfully entered the field of power line carrier communication and access network communication (including wired access and wireless WiFi). According to the application field, Chuangyao Technology's communication chip and solution business is specifically divided into power line carrier communication chip and solution business, access network chip and solution business.

In recent years, telecom operators have placed extremely high demands on access network equipment, especially the types of services that access network chips can support, as well as the speed, real-time performance, and stability of communications. Since its establishment, Chuangyao Technology has focused on the research and development of access network chips and related technologies, and is committed to continuously improving the communication speed and stability of broadband access, providing multi-service and multimedia home gateway solutions to meet users' increasing demand for broadband access, and to achieve localization of key technologies and products.

It is worth mentioning that Chuangyao Technology has always been driven by R&D and innovation to continuously promote the evolution of technology. With the excellent layout design technology accumulated in the R&D and design of communication chips, Chuangyao Technology has expanded its chip layout design business.

To date, Chuangyao Technology has become a domestic company with core communication algorithm capabilities at the physical layer and large-scale SoC chip design capabilities, and also has physical design capabilities for 65nm/40nm/28nm CMOS process nodes and 14nm/7nm/5nm FinFET advanced process nodes. Chuangyao Technology has now formed many core technologies in algorithms and software related to power line carrier communication chips, algorithms and software related to access network chips, analog circuit design, digital-analog hybrid and layout design, and its main products and technologies are at the domestic advanced level.

The company has maintained a high growth in performance in the past three years, and the amount of orders from major customers is large.

Continuous innovation in key technologies and products has also driven the continued rapid growth of Chuangyao Technology's performance. From 2018 to 2020, Chuangyao Technology's operating income was RMB 108.9381 million, RMB 165.3258 million and RMB 209.5217 million, respectively, with a compound growth rate of 38.68%.

In November 2020, Chuangyao Technology also achieved a breakthrough in its business. Communications equipment ODM Zhongguang Interconnection and Chuangyao Technology began large-scale cooperation in the field of access networks.

According to the information, China Broadcasting Internet has signed two gateway technology licensing contracts with Chuangyao Technology, purchasing technology licenses for wired gateways and wireless gateway general platforms from Chuangyao Technology; at the same time, it has also signed two chip technology use authorization contracts with Chuangyao Technology and its subsidiary Chongqing Chuangrui, whereby Chuangyao Technology will provide them with equipment software and hardware solutions and technical support based on the company's chips, and it is agreed that Chuangyao Technology will sell chips or wafers to China Broadcasting Internet or its designated customers.

With the gradual mass production of Chuangyao Technology's access network chip products and the increase in shipments to China Broadcasting Interconnection and its designated customers, as well as the successive acceptance of technology licensing projects with China Broadcasting Interconnection, Chuangyao Technology's access network business operating income will increase significantly.

At the same time, the growth of access network chips or wafers, as well as the scale of access network technology licensing business, will also drive a substantial increase in the operating income and profits of Chuangyao Technology. According to disclosures, Chuangyao Technology's operating income and net profit in the first half of 2021 increased by 102.16% and 147.31% year-on-year, respectively.

In addition, as of June 30, 2021, the amount of orders on hand of Chuangyao Technology from Zhongguang Interconnection, Shenzhen Daxin and Xi'an Leiye was RMB 117,237,400, RMB 460,741,800 and RMB 228,631,900 respectively, which is a large amount of orders on hand. The future orders on hand will also increase its performance.

The future market prospects are broad, and product upgrades will continue to be promoted

After 2018, as the "Strong Smart Grid" plan entered the leading and upgrading stage, the State Grid launched a new round of transformation and began to bid for broadband power line carrier communication products. The demand for upgrading existing smart meters has driven another round of recovery in the smart meter market demand. The application of power line carrier communication technology in the field of smart grid electricity consumption information collection has greatly driven the development of my country's power line carrier communication industry, and the future market is broad.

In the next few years, the market of power line carrier communication industry is expected to maintain a good development trend, and the market scale is expected to expand further. First, it is driven by the demand for replacement or upgrading of smart meters in China. Second, it is the increase in demand for smart meters in overseas markets. Third, the application of power line carrier communication in the field of Internet of Things is constantly deepening. In addition to being used in the field of smart grid electricity consumption information collection, power line carrier communication can also be used in smart cities, smart homes and industrial control.

Regarding future development plans, Chuangyao Technology pointed out that the company will expand investment in industries where it has already formed strong competitive advantages and industry barriers, and through continuous innovation and research and development, further enhance the company's competitive advantages and widen its moat.

At the same time, in new application areas such as in-vehicle Ethernet gateways, high-speed industrial buses, and WiFi wireless communications, we will rely on the communication SoC platform technology accumulated in the early stages and continuous technological evolution, be guided by market demand, and use one or two early chip products as a breakthrough point to continuously launch new competitive communication SoC chip products, enrich product categories, and thus occupy new markets.