Another super chip unicorn is about to hit the market.
The investment community - Tiantian IPO learned that the CSRC has reviewed the registration application documents for Haiguang Information's initial public offering of shares and listing on the Science and Technology Innovation Board, and has agreed to the registration application for Haiguang Information's initial public offering of shares. At this point, Haiguang Information is one step closer to the IPO.
Founded in 2014, Haiguang Information is a company of the Chinese Academy of Sciences, and its largest shareholder is Shuguang. Haiguang Information is mainly engaged in the research and development of high-end processors, accelerators and other computing chip products and systems, including Haiguang general purpose processor (CPU) and Haiguang coprocessor (DCU). According to the prospectus, in 2020, the revenue of Haiguang Information was 1.022 billion yuan. Its latest valuation is more than 90 billion yuan.
Haiguang Information added a fire to the hot CPU track. From overseas to China, the wind of entering the CPU is getting stronger and stronger, and NVIDIA has proposed a "three-core strategy" before it, and then there are wall servants to follow. In this mature but full of changes in the track, a number of emerging companies such as Hongjunwei, Qi Lingxin, Yuxianwei and so on have also quietly emerged. Along with the entrepreneurial tide, there is also the investment fever, and well-known VCs/PE have lined up to come to the door.
Born from the Chinese Academy of Sciences, the valuation exceeds 90 billion yuan
2014 coincided with a new node in the development of the semiconductor industry, the National Integrated Circuit Industry Development Promotion Outline was released, the National Integrated Circuit Industry Investment Fund with a scale of 100 billion yuan was established, and Haiguang Information was also established in this year, focusing on CPUs.
The CPU is the core component of servers, workstations, personal computers, etc., affecting the technical route and actual performance of operating systems, databases, application software, etc., and is the most important basic device in the IT field. In other words, people's mobile phones and computers are inseparable from CPUs, and modern people's lives are inseparable from CPUs.
This area was originally firmly occupied by overseas giants. By the end of 2020, x86 architecture server CPUs accounted for more than 97.00% of the global server market sales, which is the current mainstream architecture, and its representative international manufacturers are Intel and AMD.
However, the state continues to support the development of domestic CPUs. Industrial Securities report shows that since the "Tenth Five-Year Plan", the issue of domestic CPU autonomy has been put on the agenda many times, and industrial policies have been continuously increased. With the support of scientific research programs such as Taishan Project and 863 Project, a number of domestic CPU brands were born, such as Loongson. In 2002, the first general-purpose CPU in mainland China, Loongson No. 1 (code X1A50), was successfully tape-out. In 2006, the state also launched a major special project of "nuclear high base", "high" is a high-end general CPU.
The birth of Haiguang Information is also in this context. Similar to the Longxin Zhongke, which was born from the Chinese Academy of Sciences, Haiguang Information is also a typical representative of the company of the Chinese Academy of Sciences. Up to now, Shuguang, a listed company of the Chinese Academy of Sciences, is the largest shareholder of Haiguang Information, with a shareholding ratio of 32.10%.
From the beginning of its establishment, it has a "national team" aura, and Haiguang Information has been supported by many venture capital institutions. In the 2014 Haiguang Information Angel Round of Financing, Institutions such as Shuguang Zhongke, Guoke Holdings, CBC Broadband Capital, Chaos Investment, Changhong Electric Appliances, Jinshi Investment, Tianchuang Capital, Zhongji Investment, CITIC Securities Investment and so on came.
In 2018, Haiguang Information launched a round of financing, and received support from Changhong Electric Appliances, Chengdu Industrial Group, Chengdu High-tech Investment Group, Xinding Capital, Titanium Capital, ICBC Asia Investment, Guoke Investment and other institutions. In the same year, the A+ round was increased by the Haihe Industry Fund.
In 2020, Haiguang Information completed the B and C rounds of financing, and Rongtai Zhonghe, Chenshan Capital, and Kungaoxin Group participated in the investment.
At present, the latest valuation of Haiguang Information is more than 90 billion yuan, according to statistics, as of June 13, 2022, among the more than 300 A-share science and technology innovation board enterprises, only 4 companies have a market value of more than 90 billion yuan.
Domestic substitution, annual revenue of more than 1 billion yuan
Different from taking the road of independent innovation, Haiguang has taken a route of technology introduction. Haiguang Information's technology originates from AMD's technology license.
The prospectus mentions that based on the CPU processor design technology obtained, Haiguang CPU series Haiguang No. 1 and Haiguang No. 2 have been commercially applied, Haiguang No. 3 has completed laboratory verification, and Haiguang No. 4 is in the research and development stage. Among them, Haiguang No. 1 and Haiguang No. 2 products have been applied by users in the government, the three major operators, the five state-owned banks and other industries.
Shouldering the national task of overcoming difficulties and realizing technological independence and autonomy, Haiguang Information has received large amounts of financial support. From 2018 to the first half of 2021, Haiguang Information received government subsidies of 61.5386 million yuan, 20.0816 million yuan, 39.9179 million yuan and 10.3805 million yuan, respectively.
R&D is very expensive. From 2018 to the first half of 2021, Haiguang Information invested 921 million yuan, 989 million yuan, 1.279 billion yuan and 863 million yuan respectively, increasing year by year.
In terms of patents, as of the end of December 2021, Haiguang Information has 179 authorized patents (including 136 invention patents), 154 software copyrights and 81 exclusive rights to integrated circuit layout design. In the first quarter of 2022, the company added 17 authorized patents (including 14 invention patents), 2 software copyrights and 45 exclusive rights to integrated circuit layout designs.
From the perspective of revenue and net profit, Haiguang Information is in a growth trend. From 2018 to the first half of 2021, the operating income of Haiguang Information was 48.2514 million yuan, 379 million yuan, 1.022 billion yuan and 571 million yuan, respectively, and the net profit for the same period was -180 million yuan, -137 million yuan, -82.9752 million yuan and -96.6677 million yuan, respectively.
Among them, in 2020 and 2021, its revenue growth rate was 169.53% and 126.09% respectively, and although the growth slowed down, it still achieved a high growth rate of doubling in one year.
The downstream customers of Haiguang Information's products are mainly server manufacturers such as Company A, Inspur, Lenovo, New H3C, and Tongfang. However, the sales revenue of the top five customers accounted for 99.12%, 92.21% and 91.23% of the operating income, respectively, showing great dependence.
In terms of technology, scale effect, etc., Haiguang Information does not have obvious advantages, and its biggest feature is domestic production. Let's look at a set of data, IDC data show that in 2020, the domestic x86 server chip shipments of 6.981 million, most of the market share is occupied by Intel and AMD two companies, the total market share of more than 95.00%, of which Intel product market share is far ahead.
Looking at Haiguang Information, in 2020, the sales volume of Haiguang Information CPU products accounted for about 3.75% of the overall market share, which occupied most of the market share of domestic x86 server processors.
The tide of CPU entrepreneurship has exploded
VCs came en masse
As a benchmark for the domestic CPU segmentation track in the semiconductor industry, the new progress of Haiguang Information IPO has undoubtedly added a fire to the hot track.
From overseas to China, the CPU wind is getting stronger and stronger. From September 2020, when Nvidia plans to acquire ARM from Son Zhengyi, to the release of the first data center CPU in 2021, GPU giant Nvidia's ambitions in the CPU field have been revealed. Although NVIDIA's acquisition of ARM ultimately failed, Nvidia still said that it will adhere to the three-core strategy of "CPU + GPU + DPU" in the future. Zhang Wen, founder of the domestic GPU startup Biling, also said that it is necessary to build a data center system-level solution of "CPU + GPU + DPU".
Not long ago, the first domestic CPU stock Loongson Zhongke successfully landed on the Science and Technology Innovation Board, and the stock price rose sharply on the first day of listing, with a current market value of more than 36 billion yuan and a price-earnings ratio of 173.
The tide of CPU entrepreneurship has also become unstoppable. Newly established CPU companies such as Hongjun Micro, Qi LingXin, and Yu Xian Wei are gradually surfaced. Most of them are low-key and mysterious, and it is difficult to see the founder team on the company's official website, but the financing speed is fast and the amount of financing is staggering.
In May this year, Hongjun Microelectronics, which was established less than a year ago, completed nearly 800 million yuan of angel round and Pre-A round financing, in addition to Walden International, Hillhouse Venture Capital, CDH VGC (Innovation and Growth Fund) three first-line institutions jointly led the investment, other investors include Biling Technology, Xin Lan Micro, Chendao Capital, Xingrui Capital, Songhe Capital, Liumai Capital, C Capital, Zhongyiren Capital, Haihe Qirui Capital, Small is a large venture capital, etc., simple and detailed, as many as more than a dozen institutions.
The founding team star of Hongjun Microelectronics will develop a server CPU based on arm architecture. CEO Rong Shen has been working for Intel for more than 20 years and has been involved in the process of replacing traditional RISC architecture servers with x86 architecture servers; CTO Chen Weixiang was the main architect of Huawei's Kunpeng kernel and also served as the soC design leader in the "Yitian 710" project of The Ali Pingtou brother team.
Similarly, there is the Spirit Core. According to "Late Post", Qi Lingxin was established in the second half of last year and has completed two rounds of financing in less than a year, with a financing amount of about 600 million yuan. Qi Lingxin's angel round investors Silicon Lijie, Shixin Technology, Weier Shares, Hengxuan Technology and other semiconductor companies founders, A round investors include Lightspeed China. The core technical team of Qi Lingxin is also from Ali Pingtou Brother.
In 2021, Yuxianwei also raised hundreds of millions of yuan and obtained Innovation Factory, Ivy, Guangyuan Capital, Oriental Jiafu and Yuanlai Capital. Luo Yong, the founder of Yuxian Micro, served as the deputy general manager of the domestic CPU company Zhaoxin, and co-founder Ji Xinwei was a former Intel scientist and Huawei's director of research and development in the United States.
Once this was an unpopular track, most of the investment institutions that supported domestic CPU companies were also from the national team background, but why are investors optimistic now? Dinghui VGC (Innovation and Growth Fund) senior partner Wang Mingyu once mentioned that the server CPU is a 100-billion-level market, but also the most challenging "spire" in the field of semiconductor chip design, China as a country catching up in the global semiconductor field, will inevitably appear the world's leading server CPU companies.
There is no doubt that driven by the wave of domestic substitution and technological innovation, the CPU has become a track that many investors do not want to miss.