Sidiwei: car gauge-grade DC/DC chips supply Qualcomm product line extends to a full range of analog chips

On January 11, analog chip manufacturer Xidi Wei officially launched Science and Technology Innovation Board IPO application, online purchase code is 787173, stock code 688173. The company's offering price is 33.57 yuan per share, and the corresponding price-to-sales ratio (2020) is 58.8 times. It is expected to raise 1.343 billion yuan, 1.1 times more than the original plan.

The company's DC/DC chip business has grown rapidly in the past two years, which has become one of the main driving forces driving the high growth of Xidi's performance. In addition to the mobile phone power management chip, its car specification-level DC/DC chip is also the focus of the market.

Tao Hai, chairman of Xidiwei, told Science and Technology Innovation Board Daily during the online roadshow that the company's specification-grade DC/DC chips are mainly used in the automobile front market and are commercialized in Audi, Hyundai, Kia and other automobile brands through Tier1.

90% of revenue comes from smartphones

Xidi Micro is mainly engaged in the research and development, design and sales of analog chips such as power management chips and signal chain chips, using Fabless business model. The company's main products and business include DC/DC chips, charge management chips, port protection and signal switching chips, which can be used in mobile phones, notebook computers, wearable devices and other fields, but 90% of its revenue comes from smartphones.

Among them, the mobile phone power management chip mainly around the main chip platform or through the "chipset" to supply to terminal manufacturers. Qualcomm Snapdragon platform and MTK platform were tested and adopted by Xidi micro-phone DC/DC chip products in 2015 and 2020 respectively. The main end customers in the mobile phone field include Samsung, OPPO, VIVO and so on.

In terms of car specification-grade DC/DC chips, Tao Hai, chairman of Xidiwei, told Science and Technology Innovation Board Daily that the company's car-grade DC/DC chips are mainly used in the automobile front-loading market. "the vehicle specification grade DC/DC chip successfully entered Qualcomm's global platform reference design in 2015, and has since been commercialized in Audi, Hyundai, Kia and other automotive brands through Tier1."

"Science and Technology Innovation Board Daily" reporter noted that the DC/DC chip business is one of the main driving forces for the high performance of Xidi in the past three years, and the proportion of revenue continues to rise. From January to June in 2020 and 2021, the company's DC/DC chips achieved revenue of 137 million yuan and 163 million yuan respectively, an increase of 416.72% and 368.8% over the same period.

Although Huawei, the company's major customer, stopped ordering due to changes in the relevant external business environment in 2020, the sales amount of Taiwan Ambury increased significantly in the first half of 2021, accounting for 24.31 percentage points to 53.82% compared with the end of 2020. At the same time, due to the particularity of the business model, the concentration of Xidi's customers and suppliers is relatively high, and the combined proportion of the top five customers and suppliers is 93.22% and 85.02%, respectively.

It is worth noting that the micro-gross interest rates of Xidi in the past three years are 28.59%, 42.19% and 47.46% respectively, showing an upward trend. The company said that it is mainly affected by factors such as product structure, product price and production cost. From the perspective of product structure, the proportion of DC/DC chip revenue and gross profit margin of Synchronize rose, promoting the company's gross profit margin to rise step by step.

On the question of the price increase in the supply chain and its impact on gross profit margin, Tao Hai responded to a reporter from Science and Technology Innovation Board Daily: "the company makes a production plan according to the order on hand and prepares the goods in advance." At the same time, in order to ensure the stability of raw material supply, the company is expanding new suppliers and procurement channels year by year. "

The company believes that the semiconductor industry is characterized by the popularity of products, its price and gross profit margin will show a downward trend. However, the industry manufacturers for the development of new products and product upgrading, may make a higher gross profit margin can be maintained.

Hiddiwei further disclosed its performance forecasts for the first quarter of 2021 and 2022. Revenue is expected to reach 450 million yuan to 480 million yuan in 2021, an increase of 97.03% to 110.17% over the same period last year; net profit from return to mother is 21.6449 million yuan to 36.5247 million yuan, deducting non-return net profit from 11.1209 million yuan to 26 million yuan, turning losses into profits over the same period last year, and comprehensive gross profit margin continues to rise; the company expects revenue to reach 140 million yuan to 160 million yuan in the first quarter of 2022, an increase of 65.21% and 88.82% over the same period last year.

1.1 times more than the original plan.

Xidi Wei plans to issue 40.01 million new shares, with a total share capital of 400m shares (10 per cent). The company plans to raise 582 million yuan, it is intended to be used for high-performance consumer electronics and communication equipment power management chip research and development and industrialization projects, new generation automotive and industrial power management chip research and development projects, headquarters base and cutting-edge technology research and development projects and supplementary liquidity.

The company said that the fund-raising investment project is an upgrade, extension and supplement of the existing business. In the future, based on the existing product layout, we will devote ourselves to providing customers with a full range of analog chip product lines covering diversified terminal applications in the fields of automotive electronics, communications and storage.

The micro-offering price of Xidi is 33.57 yuan per share, corresponding to a market capitalization of 13.428 billion yuan. As the company is in a period of rapid development, and equity incentive costs have a certain impact on performance, sponsor agencies choose the market-to-sales rate to make a comparative valuation. The sales rate of Xidi micro market (2020) is 58.8 times, which is higher than the average and median of comparable companies in the same industry. The market-to-sales ratio (2021) is 27.98 ~ 29.84 times. The company expects to raise 1.343 billion yuan, which is 109.98% higher than the original planned amount after deducting the offering fee.

Tang Ya, deputy general manager, financial director and secretary of Xidiwei, told Science and Technology Innovation Board Daily that because the number of shares issued and the amount of the project did not meet the conditions for placing to other strategic investors, the company did not arrange strategic investors except the relevant subsidiaries of sponsor institutions and the special capital management plan for core employees.

It is reported that Minsheng Securities Investment, CICC Wealth and core staff salary management plan of the underwriter subsidiary will be allocated 53.73 million yuan, 53.73 million yuan and 140 million yuan respectively. In the core salary management plan, Tanya's participation accounted for 78.7% of the total, and the amount allocated reached 110 million yuan.

In terms of shareholders, Dai Zuyu, Tangya, Ningbo Hongyi, Chongqing Weichun and Shenzhen Chenxin hold 26.05%, 16.35%, 12.07%, 10.52% and 5.74% respectively. Xidiwei said that the company does not have a controlling shareholder. Dai Zuyu, TAO HAI (Tao Hai) and Tang Ya have signed the "concerted Action Agreement", which jointly controls 44.82% of the shares of the company and is the common actual controller of the company. Among them, Dai Zuyu and TAO HAI (Tao Hai) is a mother-son relationship, and Tanya's mother, he Shizhen, is one of the founders of the company.

A reporter from Science and Technology Innovation Board Daily noted that the company has been established for more than 9 years, but the number of management team is too small and younger. According to the prospectus, there are only two current senior managers, General Manager NAM DAVID INGYUN and Tanya, and the members of the supervisory board are between 1994 and 1998.