Suzhou Embraces a Semiconductor Testing IPO
Suzhou is about to welcome another semiconductor IPO.
On November 22nd, SinoNano (Suzhou) Co., Ltd., metaphorically referred to as a "full-service chip hospital," successfully passed the review of the Shanghai Stock Exchange's listing committee. The company plans to go public on the STAR Market, with Huatai United Securities as the sponsor.
The listing process indicates that SinoNano submitted its prospectus in May 2023 and underwent three financial data expirations and two rounds of inquiries before the meeting. In this IPO, the company plans to raise 297 million yuan, all of which will be used for the Suzhou Testing and Analysis Capacity Enhancement Project. Based on a minimum issuance ratio of 10%, its market value upon listing could reach nearly 3 billion yuan.
It is worth mentioning that SinoNano's latest planned fundraising amount has shrunk by 50 million yuan compared to the initial 347 million yuan; this figure is also the lowest in the past two years, slightly higher than the 250 million yuan planned fundraising amount of Sains in August 2022.
Born in Qingdao, Shandong in April 1975, Li Xiaoming obtained a bachelor's degree in microelectronics from Peking University in 1998 and then went on to earn a master's degree in electronic engineering from the National University of Singapore. After working for three years, he keenly identified that "semiconductor chip failure analysis is a strong demand for many semiconductor companies' production and R&D activities." In October 2004, he founded a commercial high-end analysis laboratory, SinoNano Singapore, and has served as the general manager ever since.
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In August 2012, SinoNano officially settled in the Suzhou Industrial Park of the Jiangsu Free Trade Zone, where Li Xiaoming has since served as the chairman and general manager of the company. As one of the cities in China that started to lay out the integrated circuit industry early on, Suzhou is one of the main reasons for attracting the company. At the same time, with more and more "SinoNanos" settling down, by August of this year, Suzhou has gathered 350 key enterprises, forming a complete industrial chain of design, manufacturing, packaging, testing, equipment, and materials.
The prospectus shows that before the IPO, Li Xiaoming directly held 43.79% of SinoNano's shares (39.41% after the IPO), and through Jiangsu Yuanxiang Holdings 6.69%, Suzhou Hexin Holdings 5.52%, Suzhou Shengyin Holdings 1.98%, and Ningbo Shengnuo Holdings 1.74%. In total, he controls 59.72% of the company's shares through direct and indirect means (approximately 53.76% after the IPO).
It should be noted that, in order to stabilize control, the actual controller Li Xiaoming has taken on a large amount of debt to dilute the shares of SinoNano in sync with external investors. As of October 31, 2024, Li Xiaoming has a total of 93.75 million yuan in outstanding debt contracts and a total of 8.1482 million yuan in interest payable. His large debt has also been inquired about twice by the STAR Market listing committee.
In addition, after the IPO, Fengnian Capital, through Fengnian Junhe, holds about 6.22%, and Fengnian Xinxiang holds about 0.17%, becoming the largest external shareholder of SinoNano; followed by GaoJie Capital, through Shenzhen GaoJie, holding about 5.92%; NaChuan Capital, through Suna Tonghe, holds about 4.34%, and through Tonghe Zhixin, holds about 0.27%; Yida Capital holds about 1.31%; YuanHe Zhongyuan holds about 0.94%; and GuoKe Jiahe holds about 0.47%.
As a well-known semiconductor third-party testing and analysis laboratory in the industry, SinoNano is committed to providing professional and efficient third-party testing and analysis experiments for the semiconductor industry chain. The company mainly serves the R&D segment of semiconductor customers, providing failure analysis of samples, material analysis, and reliability analysis, among other testing experiments.
According to the introduction, through professional and precise testing and analysis experiments, SinoNano can determine defects in customers' product design or processes, helping customers improve product yield and performance. It has become a key technical support platform for product R&D and quality control in the semiconductor field, playing an important role in assisting customer R&D. The company is also metaphorically referred to as a "full-service chip hospital."
So far, SinoNano's important suppliers include Thermo Fisher Scientific, Hamamatsu Group, Zeiss Group, Hitachi Group, and Micro Control Company, among others. It has served more than 2,000 global customers, covering the entire semiconductor industry chain, including chip design, wafer foundry, packaging and testing, IDM, raw materials, equipment manufacturers, module and terminal application customers, research institutions, and universities.
This year, SinoNano has had in-depth discussions and established cooperative relations with new customers such as ZTE, Yitang Semiconductor, Tongfu Microelectronics, the Institute of Microelectronics of the Chinese Academy of Sciences, BYD Semiconductor, Qingfang Technology, and Goer Shares.
During the reporting period of 2021-2023 and the first half of 2024, SinoNano's operating income was approximately 168 million, 287 million, 394 million, and 185 million yuan, respectively; net profit was about 27.5034 million, 65.5859 million, 98.5385 million, and 29.9322 million yuan, respectively; and net profit attributable to the parent company after deducting non-recurring gains and losses was 22.7561 million, 51.5845 million, 85.8791 million, and 26.4899 million yuan, respectively.
Among them, from 2021 to 2023, SinoNano's compound annual growth rate reached 48.43%; in the first half of 2024, the company's revenue increased by 8.37% year-on-year, continuing to maintain a growth trend.
The latest draft shows that in the first three quarters of 2024, SinoNano achieved an operating income of about 294 million yuan, a year-on-year increase of 4.49%; it achieved a net profit attributable to the parent company after deducting non-recurring gains and losses of 49.7515 million yuan, a year-on-year decrease of 14.12%, mainly due to the gradual start of production in Shenzhen and Qingdao laboratories and the recruitment of some new personnel. If the relevant impact is excluded, it is expected that the company's net profit attributable to the parent company after deducting non-recurring gains and losses for January-September 2024 will achieve year-on-year growth.
As of October 31, 2024, SinoNano had orders on hand totaling about 113 million yuan, a year-on-year increase of 24.68%.
Based on recent developments, SinoNano estimates that it will achieve a revenue of about 415 million to 425 million yuan for the whole year of 2024, a year-on-year increase of about 5.33% to 7.87%; it is expected to achieve a net profit attributable to the parent company after deducting non-recurring gains and losses of about 71 million to 77 million yuan, a year-on-year decrease of about 17.33% to 10.34%.
SinoNano mentioned in the draft that the business expansion of Shenzhen and Qingdao laboratories has made significant progress. Among them, the Qingdao laboratory has achieved monthly profitability in August and September 2024, and the revenue of the Shenzhen laboratory has also increased rapidly. It is expected that both Shenzhen and Qingdao laboratories will achieve profitability throughout 2025.