Semiconductor equipment manufacturer Tuojing Technology successfully landed on the Science and Technology Innovation Board after a 35.6% increase in its listing

On April 20, Tuojing Technology was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. The company's stock code is 688072 and the issue price is 71.88 yuan per share.

As of press time, Tuojing Technology surged 35.60% to 97.47 yuan, with a total market value of 12.33 billion yuan. 

As a leading domestic thin film deposition equipment company, Tuojing Technology insists on independent innovation and research and development, and has achieved steady growth in operating performance in recent years. According to data, Tuojing Technology is mainly engaged in the research and development, production, sales and technical services of high-end semiconductor special equipment. The company's focus is on semiconductor thin film deposition equipment, which together with photolithography machines and etching machines constitute the three main equipment for chip manufacturing.

Tuojing Technology is the only domestic manufacturer of integrated circuit PECVD and SACVD equipment with industrialized applications. It has formed an international technical team with five national-level overseas high-level experts, led by the two former chairmen, and has formed three product series including plasma enhanced chemical vapor deposition (PECVD) equipment, atomic layer deposition (ALD) equipment and sub-atmospheric pressure chemical vapor deposition (SACVD) equipment. These products have been widely used in domestic wafer fabs' 14nm and above process integrated circuit manufacturing production lines, and verification tests of 10nm and below process products have been launched.

Tuojing Technology's products have been widely used in the production lines of mainstream domestic wafer fabs such as SMIC, Huahong Group, Yangtze Memory Technologies, Changxin Memory Technologies, Xiamen Leadcore, and Yandong Microelectronics, with a total shipment of over 150 sets of machines. Relying on long-term technology research and development and process accumulation, the company has broken the monopoly of international manufacturers on the domestic market and directly competed with international oligarchs. During the reporting period, the company's products under development have been sent to a leading international wafer fab to participate in its advanced process technology research and development.

From 2018 to the first quarter of 2021, Tuojing Technology achieved operating income of RMB 70.644 million, RMB 251.2515 million, RMB 435.6277 million and RMB 57.7410 million, respectively; the net profit in the same period was RMB -103.2229 million, RMB -19.3664 million, RMB -11.6999 million and RMB -10.5892 million, respectively. After deducting non-recurring gains and losses, the net profit attributable to the parent company's owners was RMB -149.9305 million, RMB -62.4663 million, RMB -57.1162 million and RMB -24.0090 million, respectively.

Tuojing Technology stated that it has not yet achieved profitability during the reporting period, mainly due to the high technical content, large R&D investment and long product verification cycle of the semiconductor equipment industry, and the company has continued to make large amounts of R&D investment.

During the reporting period, Tuojing Technology's R&D expenses were RMB 107,973,100, RMB 74,318,700, RMB 122,781,800 and RMB 27,148,600, accounting for 152.84%, 29.58%, 28.19% and 47.02% of the operating income in each period. It pointed out that the proportion of R&D investment to operating income in 2018 exceeded 100% due to the small operating income.

Tuojing Technology's net profit is in the red. In addition to R&D investment, its ALD and SACVD equipment contribute less revenue. During the reporting period, Tuojing Technology's PECVD sales revenue accounted for a high proportion of the issuer's main business revenue, which was 77.98%, 100.00%, 97.55% and 100.00% respectively. At present, the company's ALD and SACVD are in the market development stage where products are sent to different clients for production line verification. Batch sales need to be verified by different customers, and there is uncertainty in the cycle.