The valuation is over 30 billion! Shanxi "Coal II" is about to harvest a chip IPO.

The panic of "lack of core tide" still exists, and enterprises still need to leverage the capital market to accelerate the industrial layout.

Just recently, another IC design company, Beijing Jichuang North Technology Co., Ltd. (hereinafter referred to as "Jichuang North") submitted a listing application to the Shanghai Stock Exchange, and plans to raise RMB 6,065.438 billion, with Huatai United Securities and CICC as joint lead underwriters.

You may not be familiar with this company, but its products were launched as early as the Beijing Winter Olympics. With the support of its high-performance display driver chip, several famous scenes such as "How the Yellow River water goes to heaven" and "Olympic rings break the ice" exploded the audience, presenting a visual feast that perfectly interprets the romantic genes of China people.

Before the IPO, Jichuang North had completed seven rounds of financing, and the influx of star venture capitalists included TCL Capital, Xiaomi Investment, Songhai Capital, CPE Yuanfeng, ggv Capital, etc. The last round of financing, that is, the E round of financing exceeding 6.5 billion yuan, was completed at the end of last year, and the post-investment valuation exceeded 30 billion yuan, making it a unicorn in the field of display driver chips.

As of the signing date of the prospectus, among the company's major shareholders, Xiaomi Industrial Fund holds 3.73%, ranking sixth; Vivo holds 1.59%, ranking fifteenth; Hubble Partnership under Huawei and Hubble Technology hold 1.5 1% and 0.94% respectively.

I have to say that such a big battle is still rare. Why did Jichuang North become the object of capital looting?

0 1 Shanxi rich second generation entrepreneurship

In 2008, Zhang Jinfang and four like-minded graduate students founded Jichuang North.

Zhang Jinfang was born in a wealthy family in Shaanxi on 1983. His father, Zhang Laishuan, was a coal boss and made a fortune from energy in his early years.

When it comes to coal bosses, they can't escape the stereotype of nouveau riche, but unlike Zhang Laishuan, he didn't stop at primitive accumulation, but continued to invest in career development.

In 2003, when the market was depressed, Zhang Laishuan boldly won Jiaochangping Coal Mine in Shuozhou City, Shanxi Province at twice the pre-bid price. At that time, the price of coal was only one ton in 50 yuan, and the annual production capacity of coal mine was only 6.5438+500,000 tons, with average benefits.

To this end, he spent tens of millions of yuan to buy comprehensive mechanized coal mining equipment to improve efficiency, but fully mechanized coal mining equipment was rarely used in that year, so this decision was rejected by other shareholders of the company.

Who knows that boss Zhang is a cruel person? He directly said: If you make money, it's everyone's, and if you lose money, it's his.

In 2003, the coal industry began to take off, and Mr. Zhang prospered with his unique vision. Now the total assets are 654.38 billion yuan and there are more than 5,000 employees.

In 2007, the first generation of iPhone was born, which immediately set off a craze in China. Zhang Jinfang took a fancy to the development potential of human-computer interaction. With the help of his tutor, he and four students set up Jichuang North.

With the planting of trees by predecessors, Zhang Jinfang had the start-up capital at the beginning of his business. Making chips is a burning job, and his father invested 400 million yuan to help him.

He is also quite strong in chip research, and graduated from Beijing Jiaotong University with a doctorate in circuit system. In this way, Zhang Jinfang, who grew up with a golden spoon, did not inherit his father's business, opened up a brand-new world with excellent resources, and started the "second generation", which developed from a 40-square-meter office in Zhongguancun, Beijing to offices in Shanghai, Shenzhen, Hefei, the United States, Taiwan Province Province and other places, and the number of employees increased from only five to nearly a thousand.

break up a monopoly

With the strong rise of panel leaders such as BOE and Huaxing Optoelectronics, the global panel industry has gradually shifted to Chinese mainland.

Although the monopoly of China and South Korea on the panel field has been broken, the core components of the panel in South Korea are still controlled by others, such as display driver chips, which are highly dependent on imports. The annual purchase amount exceeds 30 billion yuan, and the share from mainland manufacturers is less than 65,438+00%, which is in a very passive predicament.

The display driver chip, like the nerve center of the brain, plays a key role in panel imaging, and technical autonomy is imminent. Jichuang North is a good opportunity to catch up with the domestic substitution wave, focusing on the research, development, design and sales of display chips, and is committed to providing display chip solutions for various display panels/screens.

Since its establishment, Jichuang North has overcome many technical difficulties and made great efforts in R&D investment. R&D personnel accounted for 60%, and the R&D expense ratio remained above 65,438+05%, exceeding the average level of comparable companies in the same industry. Up to 202 1, 65438+2, 3 1, the company has 399 overseas invention patents and 89 domestic invention patents.

The first domestic TDDI chip was launched in 20 18.

In 20 19, the first mini-LED display driver chip supporting the pitch as low as 0.4 mm was introduced in China.

In 2020, China introduced the first medium and large display driver chip supporting 4K resolution.

...

As Zhang Jinfang said, "Whoever has mastered the latest science and technology will open the channel for rapid development". Jichuang North turned losses into profits in 2020, and the net profit returned to the mother in 20021year increased by 1649% year-on-year. The blue ocean of this market is very vast. From 20 19 to 202 1 year, the company achieved revenue of144.7 billion yuan, 2.38 billion yuan and 5.674 billion yuan respectively, with a compound growth rate of 98%.

During the reporting period, the company's products were widely used in various electronic products with display functions such as smart phones, televisions, notebook computers, tablet computers and wearable devices. Customers include well-known panel factories /LED screen factories at home and abroad such as BOE, Huaxing Optoelectronics and LG Group, and terminal brands include TCL, LG, Samsung, OPPO, vivo and Xiaomi.

At present, Jichuang North has ranked first in the global LED display driver chip market for three consecutive years. However, compared with the world's top integrated circuit design companies such as Samsung LSI and Yong Lian, there is still a certain gap between LCD drivers and OLED drivers, so it is necessary to further improve their competitiveness to compete for more market share.

03 upstream and downstream pressures coexist

For a long time, China's scientific and technological circles have been shrouded in the shadow of "lack of core and screen". After more than ten years of development, Jichuang North has filled the gap of domestic display chips, but its road to rise also faces many challenges, and the supply chain is one of them.

Looking back on the development process of display driver chip manufacturers in South Korea and Taiwan Province Province of China, it is not difficult to find that their industrial chains are deeply bound, one is the whole industry integration mode in South Korea, and the other is the upstream and downstream binding mode in Taiwan Province Province of China. At present, domestic semiconductor design companies and upstream wafers have not yet formed a binding, and they are still working hard in this direction.

Take Jichuang North as an example, it has always adopted Fabless business model. Wafer manufacturing and packaging testing services are outsourced to suppliers, and the purchase price and production capacity are affected by the periodic fluctuation of upstream industries to some extent.

At present, the wafer market is full of orders, and the demand is great, mainly from new energy vehicles, high-performance computing, and the Internet of Things. There is almost no possibility of price reduction, and it is even possible to continue to increase prices. However, display driver chip manufacturers generally have a low voice in the fab, and their bargaining power and ability to strive for production capacity are relatively low.

It is worth noting that, according to Omdia's tracking report, it is estimated that the capacity utilization rate of global display panel manufacturers will drop to 73% in the third quarter of 2022, the lowest in ten years. Even Samsung, the panel leader, has cut the purchase orders of panels many times this year, which will also lead to a decrease in the demand for display chips.

During the reporting period, the comprehensive gross profit margin of Jichuang North was lower than the average level of comparable companies in the same industry. On the one hand, for the sake of maintaining customer relationship, the price increase of products is lower than the average level of the same industry.

Under the double pressure of upstream price increase and downstream shrinkage, the company's profit rate may further run, and its sustainable profitability is uncertain, so its future business development is facing certain challenges.

04 conclusion

From coal to chips, Zhang's father and son stepped on the tuyere again and again, and witnessed the rolling wave of China's economic development together.

After more than ten years' accumulation, Jichuang North has made a breakthrough in the problem of "sticking the neck" of display chips and gained more initiative in the highly competitive market. However, the company is currently facing greater upstream and downstream pressure, and needs to actively promote cost reduction and efficiency improvement to ensure the company's profitability.

This article comes from Gelonghui new shares.