Another case of dismantling listing!Torch Electronics spin -off Tianji Science and Technology Innovation Board was available for acceptance

On June 29, Capital State learned that Guangzhou Tianji Electronic Technology Co., Ltd. (hereinafter referred to as "Tianji Technology") was approved by the Shanghai Stock Exchange, and it was planned to raise 383 million yuan.

Picture source: Shanghai Stock Exchange official website

Tianji Technology is a high -tech enterprise mainly engaged in the development, production and sales of microwave passive components and film integration products. The products are used in military radar, electronic confrontation, precise guidance, satellite communication and other national defense military industry, as well as 5G communication and optical communication Waiting for civilian fields.

Picture source: company prospectus

Financial data shows that the company's revenue in 2019, 2020, and 2021 was 72.666 million yuan, 126 million yuan, and 174 million yuan, respectively; the corresponding net profit corresponding to the mother was 24.291 million yuan, 44.299 million yuan, and 56.61 million yuan, respectively.

According to Article 22 of the "Shanghai Stock Exchange Science and Technology Innovation Board Stock Exchange and Listing Review Regulations" and Article 2.1.2 of the "Shanghai Stock Exchange Science and Technology Innovation Board Listing Rules", the issuer applies for listing on the science and technology board, and The market value and financial indicators should meet at least one of the following standards: "(1) The estimated market value is not less than RMB 1 billion, and the net profit in the past two years is positive and the cumulative net profit will not be less than RMB 50 million, or it is expected to be expected The market value is not less than RMB 1 billion, and the net profit in the past year is positive and operating income is not less than RMB 100 million; 100 million yuan, and the cumulative research and development investment in the past three years accounted for not less than 15%of the cumulative operating income in the past three years; (3) The estimated market value is not less than RMB 2 billion, and the operating income in the past year is not less than RMB 300 million And the net cash flow generated by operating activities in the past three years is not less than RMB 100 million; (4) The estimated market value is not less than RMB 3 billion, and the operating income in the past year is not less than RMB 300 million. "

According to the "Audit Report" issued by the accountant of Rongcheng ("Rongcheng Trial [2022] 361Z0257"), the issuer's net profit of the issuer's deduction in 2020 and 2021 was 4,407,700 yuan and 52.7039 million, respectively. Yuan, the net profit in the past two years has been positive and cumulative net profit is not less than 50 million yuan. Combined with the recent valuation of the publisher company in the domestic market, based on the pre -evaluation of the issuer's market value, it is expected that the total market value of the issuer will not be less than RMB 1 billion after issuance. Therefore, the issuer chooses the listing standard (1).

The proposed fundraising for microwave passive components and film integrated product expansion projects, technical research and development center expansion projects, marketing networks and information projects, and supplementary mobile funds.

Picture source: company prospectus

As of March 31, 2022, Torch Electronics held 30,947,700 shares of the issuer, accounting for 51.58%of the total share capital of the issuer, and became the controlling shareholder of the issuer.

The issuer's actual controller is Cai Mingtong and Cai Jinjun, and the two are the relationship between father and son. As of March 31, 2022, Cai Mingtong and Cai Jinjun held a total of 191,468,895 shares of Torch Electronics, accounting for 41.63%of the total number of torch electronics shares, which was the actual controller of the torch electronics. Cai Mingtong and Cai Jinjun controlled 51.58%of the issuer's shares through the torch electronics, and were the actual controller of the issuer.

It is worth mentioning that the IPO IPO of Tianji Science and Technology Creation Board is the spin -up and listing behavior of Torch Electronics.

The torch electronics claims that Tianji Technology, a subsidiary of the subsidiary controlling subsidiary, is split to the science and technology board to go public. This spin -off meets the requirements of the "Disciplinary Rules of Listed Companies (Trial)". Torch Electronics has fulfilled the information disclosure and decision -making procedures of this spin -off in accordance with the relevant requirements of the Demolition Rules, and legal and compliance.

Torch Electronics (excluding Tianji Technology, the same below) is mainly engaged in MLCC -based self -produced business, component trade business and new material business. Structure, product performance, core technology, production technology, downstream applications are different.

Tianji Technology and Torch Electronics are independent of business, assets, finance, institutions, and personnel. They have complete procurement, R & D, production, sales, and services. They have independent business processes and have independent business capabilities directly facing the market. After the spin -up and listing of Tianji Technology, it will enhance its own capital strength and financing capabilities, and accelerate the development of microwave passive components and thin -film integrated products.

Torch Electronics is split this time the independence listing of Tianji Technology is conducive to both parties to highlight the main business and enhance independence, and accelerate their development in different segments.

Tianji Technology admits that the company has the following risks:

(1) The risk of technical upgrade iteration

Benefiting from the acceleration of military information construction and the upgrading of weapons and equipment, my country's military microwave millimeter wave communication market has grown rapidly. With the development of communication and reconnaissance technology to higher frequencies, higher requirements have been put on military electronics systems such as military radar, electronic confrontation, and precise guidance. As a key basic component of the company's microwave passive components and thin -film integration products, it is necessary to continuously develop to higher frequencies according to the technical requirements of users.

At the same time, with the development of communication towards high frequency, the application field of microwave millimeter wave technology has expanded to 5G communication, driverless, satellite Internet, anti -drone radar, meteorological radar and other fields. For example, 5G bases have significantly improved in terms of communication frequency and bandwidth, and also put forward higher requirements for the company's products. The company needs to be continuously upgraded and iterated according to the technological development trend and downstream customer needs to maintain technological advancedness and product competitiveness. If the company fails to accurately grasp the market development trend and always maintain innovation capabilities and keep close to the development direction of downstream applications, it may cause the company to lose market competitiveness and adversely affect the company's profit.

(2) Risk of new products research and development

The company's microwave passive components and thin -film integrated products are mainly used in the field of national defense and military industry in military radar, electronic confrontation, precision guidance, satellite communication, as well as civil fields such as 5G communication and optical communication. The company needs to quickly develop new products based on the needs of downstream customer technology upgrades and renewal iterations.

In order to maintain the continuous upgrade of product technology and the need for the iteration of customer product renewal, the company needs to continue to invest in manpower and funds. Although the suppliers of supporting products will not be easily replaced after weapons and equipment, if the company's products fail to conduct R & D investment and technological innovation in a timely manner, the product technology may not be able to meet the changes in downstream demand in time, which will affect the company's sustainable future development.

(3) The risk of disclosure of core technology

The company has formed 15 core technologies in the field of microwave passive components and thin -film integration products, all of which are formed by the company's R & D team through long -term R & D innovation and repeated test accumulation. It is an important guarantee for the company's core competitiveness and achieve rapid development. Although the company has formulated relevant confidentiality systems and signed a confidentiality and competition restriction agreement with senior management personnel and core technical personnel, it does not rule out that the company’s patent, non -patented technology and other R & D results will be leaked in the future. The core technology of the company may adversely affect the company's business development.

(4) The risk of higher customer concentration

During the reporting period, the company's national defense military workers accounted for relatively high. According to my country's military procurement system, the suppliers of weapons and equipment are mainly major military industry groups, such as China Electric Power Group, Aerospace Science and Industry Group, Aerospace Technology Group, China Weapon Group, etc. supply. There are many scientific research units under the major military industry groups, and there are certain differences in the focus of business and products. According to the sales income of customers with the same control of combined caliber statistics in the military industry group, there will be a high concentration. During the reporting period, the company's top five customers accounted for 78.18%, 77.63%, and 83.41%, respectively.

Related scientific research institutes and enterprises under the China Electric Science and Technology Group are mainly engaged in the development of military radar, electronic confrontation, and precise guidance. Among them, CSSC 02 and CLP 03 are currently the most important scientific research institutes that provide military microwave millimeter -wave chips in China; CSSC 01 is currently in China that is mainly engaged in active phase control arrays T/R components and radio frequency integration. Leading enterprise of circuit business. The company's microwave passive component and thin film integration products are key basic components that support the T/R components, radio frequency modules, and power modules developed and produced by the above units. During the reporting period, the company's sales of China Electric Power Group (the same control merger caliber) accounted for 54.70%, 53.93%, and 71.21%, respectively.

If the company's downstream market and business strategy have changed significantly in the future, or the company cannot meet the needs of customers due to technical reasons such as technical reasons, the company's operating performance will face the risk of decreased or slowed down.

(5) The risk of the continuation of military qualifications and the continuation of military industry certification

The company has relevant qualifications for military products business, holds the "Equipment Contracting Unit Qualification Certificate", "Weapon Equipment Scientific Research and Production Unit Level Three Confidential Qualification Certificate", "Weapon Equipment Quality System Certification Certificate"; The standard line certification, the product meets the standards of the national military standard (GJB2442-1995). The above qualifications and certifications need to be reviewed and certified regularly. If the company cannot continue to review and obtain the above qualifications in the future, the sales of related products with military products will face major adverse effects.

(6) Risks with higher amounts of receivables

In the end of 2019, at the end of 2020, and at the end of 2021, the company's receipts for receiving bills were RMB 24.1786 million, RMB 42,86,600, and 92.148 million yuan, and the balance of accounts receivable was 3,322,25,800 yuan, 74.4016 million yuan, and 105.273 million yuan. The company's reporting period at the end of each period of the company's reporting period is large, which is mainly the impact of the customer settlement method of the military group. Although the military customers are well -received, the amount of receivables has greatly affected the company's funding rate and brought a certain amount of capital pressure to the company. If the international situation and the national security environment changes, the company's main customer operations have difficulty, and the delayed payment progress or payment capacity will be affected, which will adversely affect the company.

(7) The risk of continuing the net cash flow of business activities is

Due to the strict internal approval and complex process of military clients, the company's military product business is relatively long, resulting in a long settlement cycle of the company's sales payment, and the company's operating receivables have grown rapidly during the reporting period. The main customers of the company's military products are scientific research units under the military group, and the settlement method is mainly a commercial acceptance bill of 6 months to 12 months. At the same time, with the expansion of the company's production and sales scale, the company needs to reserve raw materials, and the company's supplier's payment credit period is generally shorter than the sales collection cycle, further increasing the company's capital pressure. In addition, the company's orders have increased significantly during the reporting period. In order to meet the production needs and delivery time, the company continues to increase the number of employees, and the salary of employees paid has also increased significantly. In 2019, 2020 and 2021, the net cash flow generated by the company's operating activities was -255.732 million yuan, -52.1158 million yuan, and -74.40341 ​​million yuan, respectively, and continued to be negative. If the scale of the military business continues to grow rapidly or the settlement of the downstream military clients will not be settled in time, the turnover pressure of the company's operating funds will continue to increase. The company's operation has an impact.

(8) The risk of increased inventory scale and the price decline of inventory

At the end of 2019, at the end of 2020 and at the end of 2021, the company's book value of the company's inventory was 38.568 million yuan, RMB 56.771 million, and 79.224 million yuan, accounting for 38.59%, 30.64%, and 26.12%of the mobility assets at the end of each period. The preparations for the decline in inventory were 34.855 million yuan, 5.707 million yuan and 7.063 million yuan, respectively. With the expansion of the company's business scale, the company's inventory balance may continue to rise and increase the risk of inventory price decline, which will adversely affect the company's operating performance.

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