Runxin Technology: Application for RMB 140 million private placement accepted by Shenzhen Stock Exchange

On February 18, Runxin Technology announced that the company recently received the "Notice on Acceptance of Application Documents for Shanghai Runxin Technology Co., Ltd. to Issue Shares to Specific Objects" (Shenzhen Stock Exchange Examination [2022] No. 39) issued by the Shenzhen Stock Exchange. The Shenzhen Stock Exchange reviewed the prospectus and related application documents submitted by the company for issuing shares to specific objects through simplified procedures, and believed that the application documents were complete and decided to accept them.

The announcement shows that Runxin Technology plans to issue stocks to specific objects through a simplified procedure, with the total amount of funds raised not exceeding 140 million yuan, which will be used for wireless beacons, micro-energy collection chips and IC system solutions; high-definition LED drive, control chips and IC system solutions.

润欣科技是国内领先的 IC 产品分销和解决方案提供商，主要通过向客户提供包括IC应用方案在内的技术支持服务，形成IC产品的销售。公司的主营业务以无线连接芯片、射频元器件和MEMS传感器模块为主，是IC产业链中连接上下游的重要纽带。近年来，公司持续增加在无线通讯、射频和 MEMS 传感芯片的研发投入，智慧家居、TWS无线耳机、混合模拟信号等市场的业务增长显著。未来公司将继续保持在无线通讯领域的领先优势，积极拓展无线芯片定制、射频元器件、MEMS 传感器、5G 通讯模块等在智慧家居、智能穿戴、智慧交通、未来教育等领域的应用。

With the rapid development of emerging technologies such as mobile Internet, Internet of Things, and artificial intelligence, and the rapid popularization of smart terminals, the global IC market sales scale has grown steadily. According to data from the World Semiconductor Trade Statistics Association (WSTS), the global semiconductor market size in 2020 was approximately US$440.40 billion, an increase of 6.80% from 2019, and semiconductor products represented by memory and special chips began to enter a prosperity cycle. Among them, integrated circuit sales were US$361.2 billion, a year-on-year increase of 8.40%, and integrated circuit sales accounted for 82.00% of semiconductor market sales. In 2021, the global semiconductor market size totaled US$583.5 billion, a year-on-year increase of 25.10%.

Compared with large international electronic component distributors, the distribution scale of local distributors in my country is generally small. In recent years, some local distributors in my country have continued to grow and become stronger through mergers and acquisitions, and distribution companies with sales of more than RMB 10 billion have emerged one after another, such as China Electronics Port, Tycosource, Shenzhen Huaqiang, etc. During the reporting period, the issuer's distribution income scale was approximately RMB 1.4-1.8 billion. According to the ranking of local electronic component distributors published by "International Electronic Business", the issuer's electronic component distribution business ranked 21st, 29th and 31st from 2018 to 2020.

Runxin Technology's core competitiveness is mainly reflected in its application design and product positioning capabilities for IC products. As a technology-based authorized distributor, the company has designed and laid out chips with huge sales volumes from well-known IC chip manufacturers such as Qualcomm Atheros, Skyworks, AVX/Kyocera, Atmosic, Hong Kong Hengxuan, and AAC Technologies (AAC). The company can effectively help downstream customers solve design problems and has strong market competitiveness.

During its development, the company has always maintained cooperation with leading international and domestic IC design manufacturers, including Qualcomm, Skyworks, AVX/Kyocera, AAC, etc., which are IC design companies with significant influence in the world. The upstream high-quality IC design resources give the company advantages in product competitiveness and new technology learning ability, and play a directional role in the company's sustainable development. The company's important customers are well-known domestic electronic product manufacturers, such as Midea Group, Wingtech Technology, DJI Innovations, etc. Through long-term cooperation, the company has a high-quality customer base in key business areas. The industry-leading customer base is conducive to the company's expansion of market influence and acquisition of market share. More importantly, it enables the company to have the ability to discover and customize new IC products for the market.

In recent years, with the upgrading of China's local electronic manufacturing industry, the country has attached great importance to and strongly supported the development of the integrated circuit industry, and has successively introduced a series of policies to promote the development of the industry. Penetrating into the upstream of the IC industry and providing customized IC products to key customers are important development directions for China's local IC distributors. Through long-term accumulation, the company has a complete embedded development tool platform, code and IP protocol stack for wireless chips. The company can extend to the upstream of the industrial chain in a system integration manner, integrating chip design resources, wafer fab testing services, EDA tools, module combination packaging, IC system service software and other upstream and downstream links to make up for shortcomings and obtain market dividends of domestic substitution. With the development of Internet of Things technology, the company continues to develop IC solutions in the fields of smart home, smart wearables and automotive electronics, using wireless communication chips as a platform, integrating RF devices, sensor technology, and intelligent processing modules, and developing integrated intelligent software products and scenario realization.

The company is an authorized IC distributor focusing on wireless communication, radio frequency and sensor technology, and has competitive advantages in the smart Internet of Things, acoustics, automotive electronics and other market segments. Focusing on technical services in the market segments can make the company's business team more professional and improve coordination and operational efficiency; on the other hand, focusing on the market segments can enable the company to keep abreast of changes in technology and demand in the field and enhance the viscosity of cooperation with IC suppliers. The wireless communication, radio frequency and sensor technology field that the company has worked on for many years is one of the most promising segments in the IC industry chain. Communication, radio frequency and sensor ICs involve signal acquisition, transmission, modulation, reception, calculation and control, and are the basic links of the Internet of Things network, with a continuous and stable market demand. In addition, the emerging intelligent Internet of Things AIOT uses communication technologies such as local area interconnection and narrowband data networks to connect wireless radio frequency, sensors, controllers, terminal devices, etc., to form a network that connects people and things, things and things, and drives image, voice recognition, sensor data acquisition, information interaction and edge computing. Massive equipment networking and 5G intelligent scene applications will provide continuous and huge market demand for the wireless communication, radio frequency and sensor industries, and bring new development opportunities to the company.

润欣科技称，公司是国内领先的IC产品分销和解决方案提供商，主要通过向客户提供包括IC应用方案在内的技术支持服务，形成IC产品的销售。公司的主营业务以无线连接芯片、射频元器件和MEMS传感器模块为主，是IC产业链中连接上下游的重要纽带。近年来，公司持续增加在无线通讯、射频和MEMS传感芯片的研发投入，智慧家居、TWS无线耳机、混合模拟信号等市场的业务增长显著。未来公司将继续保持在无线通讯领域的领先优势，积极拓展无线芯片定制、射频元器件、MEMS传感器、5G通讯模块等在智慧家居、智能穿戴、智慧交通、未来教育等领域的应用。

Against the backdrop of my country's industrial policy push for semiconductor integrated circuits and the rapid development of emerging industries such as smart Internet of Things and automotive electronics, the company needs to take advantage of opportunities in domestic substitution and customized chip design to expand into the upstream IC design and wafer testing fields.

The investment projects of the raised funds are in line with the country's industrial policy on semiconductor integrated circuits, and are in line with the company's long-term development strategy of expanding into the upstream chip design field and wafer testing. They focus on the company's advantageous market segments, increase investment in the company's independent intellectual property rights, make up for shortcomings, and strengthen coordinated development with upstream and downstream of the industrial chain.

The investment projects of the raised funds adopt a market-oriented chip customization strategy, which will help improve the company's professional capabilities in the field of IC design; at the same time, it can also provide wafer quota protection and wafer testing services for small and medium-sized chip design companies. In general, the investment projects of the raised funds will help improve the company's independent research and development and profitability, and enhance its core competitiveness.