In The Past, The Main Board Listing Was Not This Will Enter The Pass Technology Innovation Board Crystal Rich Source Ten Years Focus On LED Driver Chip Quality Remains To Be Verified

- Jul 19, 2019-

Bright stars and thousands of lights have become a symbol of modern urban civilization, and a key technology supporting the flashing of lights is LED lighting driver chip.

Ten years of entrepreneurship, 2018 domestic sales of 3.8 billion LED lighting driver chips, revenue reached 767 million yuan, market share of nearly 30%.

However, the main board listing of the company in 2018 was rejected, and the change of route to science and innovation board in 2019 will be held on July 23. Will the fate of jingfengmingyuan be different this time?

Focused LED lighting driver

Establish a technical moat

Different from the traditional incandescent lamp, LED lighting products because of its sensitive nature, cannot be directly connected ac mains, need to design complex in the process of application of constant current drive circuit for stability and protection, LED lighting driver chip as the core component of drive circuit, the effective power, constant current accuracy, life of power, and electromagnetic compatibility directly determines the performance and life of the LED lighting products, known as the "heart" of LED lighting products.

In 2008, hu liqiang and his wife, liu jiexi, founded jingfengmingyuan. In the early stage of enterprise development, the company adopted a cautious development strategy and concentrated its products in LED lighting driving industry.

After years of development, jingfengmingyuan has gradually gained a firm foothold, with the market share of relevant products approaching 30%.

According to the statistics of the national semiconductor lighting engineering research and development and industry alliance (CSA), the output of LED lighting products in China in 2018 was about 13.5 billion sets. According to the calculation of one LED lighting driver chip for each LED lighting product, the domestic sales volume of the company in 2018 was 3.818 billion pieces (including the number of converted untested wafers), with a market share of 28.28%.

In fact, at the early stage of the development of semiconductor lighting industry in China, lighting driver chips mainly rely on imports.

Crystal FengMingYuan in such aspects as high precision constant current technology to realize the technological breakthrough, mastered the "parasitic capacitance coupling and line voltage compensation constant current technology", "single ohmic overvoltage protection technology", "temperature drop current closed-loop control technology", LED lighting driver chip design of the key technologies such as launched LED lighting driver of the overall solution.

The research and development achievements break through the monopoly of foreign chip enterprises on LED lighting driver chip, and take a leading position in the industry in constant current precision, source-pole drive technology and other technical indicators, and complement the development of China's semiconductor lighting industry "the last piece of the puzzle".

Jingfengmingyuan also won the "China LED initiative award" and other honorary titles issued by China lighting society and semiconductor lighting technology application committee.

In addition, the company and the university of electronic science and technology and other units through the mode of production, study and development of high voltage power MOS device is the key technology and application of technology in 2017 won the "sichuan province won the first prize in science and technology progress prize", and in 2019 the ministry of education to the national science and technology awards office nomination for "national science and technology progress prize", the technology has broken the Europe, Japan, America and other countries power semiconductor companies long-term monopoly of high power high voltage MOS chip.

The company's products have also been widely recognized by downstream customers. Major LED lighting enterprises well known by the public, such as philips, opp lighting, leishi lighting, sunshine lighting, sanxiong aurora, foshan lighting and debang lighting, all use LED lighting driver chip products of jingfengmingyuan.

In 2016 and 2017, "top ten export enterprises of Chinese LED lighting products", a total of 13 large lighting enterprises have all applied the LED driver chip of jingfengmingyuan.

According to the prospectus, from 2016 to 2018, jingfengmingyuan achieved revenue of 567 million yuan, 694 million yuan and 767 million yuan respectively, and net profit of parent company was 29.915,300 yuan, 76.159 million yuan and 81.311 million yuan respectively.

From 2016 to 2018, the r&d expenditure of the company was 45718,800 yuan, 52510,800 yuan and 60817,200 yuan respectively, accounting for 8.06%, 7.56% and 7.93% of the revenue respectively.

As of December 31, 2018, the company has 115 technical r&d personnel, accounting for 59.59% of the total number of employees.

Jingfengmingyuan said that one of the company's competitive advantages is to build an efficient talent team, which has rich management experience, research and development experience and industry chain integration experience, and the overall operation efficiency is high.

Compared with 9 comparable listed companies such as Shanghai beiling, zhaoyi innovation, shengbang holding co., LTD., and zhongying electronics co., LTD., in 2018, jingfengmingyuan achieved a per capita income of 4.15500 yuan and a per capita income of 440,800 yuan, both of which are in the forefront of the industry, and the per capita income is second only to zhaoyi innovation.

In the field of LED lighting driver chips, the main competitors of jingfengmingyuan are shilanwei, A listed company, and sili lijie, A listed company in Taiwan.

Gross margin is lower than comparable companies

2018 main board listing was rejected

From 2016 to 2018, the company's comprehensive gross profit margin was 20.31%, 22.06% and 23.21% respectively, which increased year by year, but was lower than the average level of comparable listed companies.

According to the prospectus, the average gross margin of comparable listed companies from 2016 to 2018 is 32.98%, 33.35% and 32.80% respectively.

As for the reasons why the gross profit margin is lower than the average level of comparable listed companies, the company explains that the main products in the reporting period are general LED lighting driver chips and intelligent LED lighting driver chips, among which the gross profit margin of general LED lighting driver chips in the reporting period is 16.00%, 17.75% and 18.89% respectively, lower than the average level of comparable listed companies.

The gross profit margin of intelligent LED lighting driver chip is 46.80%, 40.49% and 39.37% respectively, which is higher than the average level of comparable listed companies.

As the penetration rate of the company's intelligent lighting products is still gradually increasing at the present stage, the proportion of the company's intelligent LED lighting driver chip products is lower than that of general LED lighting driver chip, resulting in the comprehensive gross profit rate is lower than the average level of comparable listed companies.

Among the main products of jingfengmingyuan, the revenue of general LED lighting driver chips accounted for 83.23%, 78.96% and 75.57% of the company's revenue from 2016 to 2018 respectively.

Smart LED driver chips accounted for 13.94%, 16.87% and 16.31% of the company's revenue from 2016 to 2018.

Company introduction, compared with the traditional LED general lighting, intelligent LED lighting can provide multi-function lighting service to meet the needs of all kinds of scenarios, each big LED lighting manufacturers and manufacturers also gradually with the intelligent lighting field, in order to comply with the industry development trend, realize the early development of market occupation and dividends.

In 2016, huawei, xiaomi, haier and other well-known brands have started to cross the boundary of intelligent lighting, jointly committed to building an intelligent lighting ecosystem based on the Internet of things.

In this context, the company layout intelligent LED lighting chip products, increase the investment in intelligent lighting chip technology research and development.

At the same time, intelligent LED lighting driver chip has high technical added value, compared with general LED lighting driver chip product gross margin is higher.

In this listing of science and technology innovation board, jingfengmingyuan plans to raise fund of 710 million yuan, and the development and industrialization project of intelligent LED lighting chip is also one of the projects.

In fact, the company applied to list on the main board in 2017, but was rejected after the meeting in July 2018.

The inquiry opinions of the commission mainly include: the gross profit margin of the company during the reporting period is lower than that of comparable companies in the same industry, the change trend in 2017 is inconsistent with that of comparable companies in the same industry, the distribution income accounts for about 80%, and the inventory quantity declared by dealers at the end of each period increases significantly.

Jingfengmingyuan adopts the sales mode of "distribution first and direct sales second", that is, the company mainly sells products through dealers, and a few products are directly sold to LED lighting manufacturers.

From 2016 to 2018, the distribution revenue of jingfengmingyuan was 452 million yuan, 551 million yuan and 560 million yuan respectively, accounting for 79.72%, 79.36% and 73.09% of the main business revenue respectively.

Distribution mode is the usual sales mode in the integrated circuit industry. Listed companies in the same industry, such as shengbang stock co., ltd. and Shanghai beiling, etc. all use or partly use the distribution mode to complete product sales.

From the perspective of business division of labor, is conducive to improving efficiency.

However, the distribution model is prone to financial problems. Whether it is the previous inquiry by the CSRC or the three inquiries by the Shanghai stock exchange of the listing of sci-tech innovation board, "distribution" is the focus of regulatory attention to jingfengmingyuan.

In response to inquiries, jingfengmingyuan said that the company has established an instant dealer inventory reporting system to prevent dealers from hoarding unsalable goods and affecting the interests of the company.

The ending inventory of the dealers is all reasonable stocking according to the later sales situation, and there is no situation that the company presses the goods through the dealers.

During the reporting period, the proportion of the ending inventory of dealers in the sales volume of the following January is 65.80%, 63.03% and 55.46%, respectively, which is relatively stable and showing a decreasing trend. Therefore, the ending inventory of such dealers is required for normal sales and has a fast turnover, which is reasonable.

During the reporting period, all the company products purchased by the dealers are purchased by their follow-up sales, and the overall purchase and sales of the dealers are relatively high.

After verification, the company's sales revenue is normal and no large amount of return, there is no dealer channel pressure goods, surprise purchase situation.

In addition, the company sponsor organizations and lawyers say, the company's annual top five distributors during the reporting period and its controlling shareholders, actual controllers, directors, supervisors and senior management personnel and the core staff and the issuer of the directors, supervisors and senior management personnel and other associated natural person and there is no correlation between employees or former employees, related party transactions, no real trade background of funds or other benefits.

Promote product diversification strategy

Although it sells billions of chips a year, the unit price is not high. From 2016 to 2018, the price of its general LED lighting driver chip is 0.22 yuan, 0.219 yuan and 0.205 yuan respectively.

The price of intelligent LED lighting driver chip is 0.38 yuan, 0.38 yuan and 0.34 yuan per chip, and the product price shows a downward trend.

Core product unit price decline is bound to bring pressure on the company's future performance.

According to unaudited data, jingfengmingyuan's performance increased slightly in the first half of 2019.

From January to June 2019, jingfengmingyuan's operating income reached 411 million yuan, an increase of 8.88% over the same period last year.

From January to June 2019, the company's gross profit margin was 22.92%, which was basically the same as that of the same period last year.

From January to June 2019, the company realized net profit of RMB 41,168,300 yuan deducted from non-parent company, an increase of 6.80% compared with the same period last year.

Crystal has recognized that its competitive disadvantage compared with its competitors is that it has fewer chip products in other fields.

During the reporting period, the main products of the company are LED lighting driver chips. Although there are many types of products, the product categories are relatively single, and the downstream application fields are concentrated in LED lighting industry.

A single product type and downstream application can help the company focus on technology breakthroughs in the early stage of development, quickly occupy market segments and establish competitive advantages, but at the same time, it also leads to a high degree of dependence on the downstream industry demand, and the overall risk resistance capacity is insufficient.

Crystal FengMingYuan had begun to advances the strategy of diversified products, during the reporting period, the company successfully developed and applied in the field of industrial control motor driver chip used in intelligent household in the field of intelligent panel chips, is the company's experience in the field of LED power management chip migration application, is also a company in the field of LED power management chip accumulated experience in concrete show in other analog chips of commonality.

As for smart panel, jingfengmingyuan has established cooperative relationship with bull electric, a leading switch and socket supplier in China, and formed related product sales.

In terms of motor drive chips, from 2016 to 2018, the company achieved sales revenue of 317,100 yuan, 2,158,100 yuan and 5,704,600 yuan respectively, achieving rapid growth of sales revenue.

Motor driver chip is mainly used in home appliances, new energy, industrial control and other fields.

Since the industrial control field needs high reliability and high performance driver chip to carry the working load of motor and motor, the ability to withstand instantaneous high voltage voltage mutation becomes an important technical threshold of power management driver chip for industrial control.

At present, the international mainstream semiconductor manufacturers all have complete motor control solutions, such as TI(Texas instruments), ST(stmicrosystems), Allegro MicroSystems. The Chinese enterprises studying motor control integrated circuits mainly include jingfengyuan, shilanwei and a few others.

It has been relatively short time for JMC to expand the field of motor driver chips, and the relevant project experience needs to be further accumulated and enriched. The brand awareness is still under construction, and it needs to face the high requirements of industrial customers and the competition from internationally renowned enterprises.

Therefore, the company to power management chip new areas of difficulty to expand, growth time is long and other risks.

According to jingfengmingyuan, in the next two to three years, the company will continuously increase research and development investment, introduce high-tech talents, strengthen technical innovation, improve management system and operation mechanism, and bring more LED lighting driver chip products with high technology content and high added value to meet the market demand.

Combined with years of accumulated LED lighting driver chip research and development and sales experience, the company will also through the motor driver chip products continued research and development and market promotion, to achieve the diversification of the company's products layout.

The company will continue to strengthen the domestic and foreign market development ability and market response ability, further optimize the company's existing product structure, enhance the company's brand influence and product market competitiveness.