Xinlong Technology Innovation Board IPO: domestic substitution boosts performance growth, low R&D investment intensity

The IPO application of Shanghai Xinlong Semiconductor Technology Co., Ltd. (hereinafter referred to as “Xinlong Technology” or the “Company”) has been accepted by the Shanghai Stock Exchange on June 22, 2021. The company plans to issue no more than 15 million shares this time and raise funds no more than 263 million yuan.

Xinlong Technology is mainly responsible for the design and sales of power chips. Under the trend of localization of semiconductor products and import substitution, the company’s chip sales totaled 240.33 million in 2020, a year-on-year increase of 49.01%; revenue was 158 million yuan, a year-on-year increase of 41.86%, showing a trend of rapid growth.

At present, the core performance indicators of some of the company’s products, such as operating voltage, input current, output current, output power, etc., have reached or exceeded similar products from well-known international manufacturers such as Texas Instruments and Analog Devices, realizing the import substitution of related products. But it still faces the risk of low intensity of R&D investment.

Shanghai Airport indirectly holds shares of medium-voltage power supply chips as the main product category

Xinlong Technology was established in May 2012, mainly engaged in the research and development, design and sales of power management analog integrated circuits. The company’s products are mainly switching DC-DC power chips, which are power control circuits and semiconductor power electronic devices.

As of the signing date of the prospectus, the company’s joint actual controllers were Li Ruiping, Du Yan, and Chang Xiaohui. The three held a total of 93.11% of Xinlong Technology’s shares, and there was no controlling shareholder. In November 2020, Xinlong Technology received investment from the Shanghai Pilot Free Trade Zone Phase III Equity Investment Fund Partnership (hereinafter referred to as “Free Trade Phase III”), with a shareholding ratio of 2.79%.

The third phase of the free trade is a private equity fund established in 2017 with a registered capital of 171.42 million yuan. The fund focuses on leading industries such as medical and health care, logistics supply chain, environmental protection and new energy in the free trade zone and national key development areas. According to reports, Shanghai Airport is one of the partner investors in the third phase of the free trade, with a capital contribution ratio of 29.17%, which means that Shanghai Airport indirectly holds shares in Xinlong Technology.

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