Sister Zhejiang is at the helm of making chips, and Lianru Technology is going to ring the bell for IPO

The investment community

2024-06-02 16:33Posted on the official account of Beijing Qingke Entrepreneurship Information Consulting Co., Ltd

A-shares ushered in a long-lost scene.

On the evening of May 31, the Shanghai Stock Exchange issued an announcement that Lianru Technology's IPO had passed the initial meeting, which means that after 115 days, A-shares finally ushered in the IPO meeting.

After such a node, Lianru Technology has received unprecedented attention. Recalling that 10 years ago, Fang Xiaoling, an alumnus of Zhejiang University, came to Hangzhou to found Lianru Technology, focusing on platform-based chip design, and has launched a variety of SSD main control chip products, becoming one of the few companies in the world that has mastered the core technology of data storage master control chips.

You must know that this is also the first A-share IPO company after the introduction of the new "National Nine Articles". Prior to this, no IPO company in A-shares was reviewed by the Listing Committee for more than 3 months, during which Marco Polo's initial offering application was suspended on May 16. In the eyes of the outside world, it seems that there is now a listing sample that can be used as a reference.

The post-60s sister of Zhejiang University makes chips

It's finally time for an IPO

Born in 1963, Fang Xiaoling graduated from the Department of Biological Instrumentation of Zhejiang University in her early years, which is now the School of Biological Instrumentation of Zhejiang University, and then stayed in the school to complete her master's degree. After graduation, Fang Xiaoling went to the United States to study for a doctorate and worked as an engineer in a well-known technology company.

In 2001, Fang Xiaoling started her entrepreneurial career and co-founded a fabless technology design company called JMicron. Until 2014, she came to Hangzhou Binjiang and founded Lianru Technology again, and has served as the chairman of the board until now.

Since its inception, the company has kept a low profile. Based on its self-built R&D platform and core IP, Lianru Technology has set up branches engaged in R&D, marketing and technical support in Shanghai, Guangzhou, Shenzhen, Suzhou, Chengdu and other places.

During this period, the company has successively launched nearly ten competitive SSD main control chip products, realizing a complete layout from SATA to PCIe SSD main control chip, covering consumer, industrial and enterprise SSD main control chips. Among them, the company's self-developed series of data storage master control chips, AIoT signal processing and transmission chips, have achieved large-scale sales, which can be widely used in consumer electronics, intelligent IoT, industrial control, data communication, transportation, industrial Internet of Things, smart office and other fields.

According to the official website, Lianru Technology has developed into an independent SSD main control chip manufacturer with the world's top shipments, and is also one of the few companies in the world that has mastered the core technology of data storage master control chips. According to the prospectus, during the reporting period, the cumulative shipments of data storage main control chips of Lianru Technology were close to 90 million, and the shipments of SSD main control chips accounted for 22% of the whole market, ranking second in the world.

In fact, as early as the end of 2022, Lianru Technology was accepted for IPO, but it was briefly suspended last year and has passed two rounds of inquiries. This time, Lianru Technology chose the fourth set of listing criteria for the Science and Technology Innovation Board, that is, "the expected market value is not less than RMB 3 billion, and the operating income in the latest year is not less than RMB 300 million".

After ten years of entrepreneurship, 60-year-old Fang Xiaoling's first IPO in her life is just around the corner.

The first IPO of A-shares has recently passed

How is it made?

That night, the news of Lianru Technology's meeting attracted great attention, and was even pinned on the weather vane.

According to the prospectus, Lianru Technology is a platform-based chip design company that provides data storage master control chips, AIoT (artificial intelligence Internet of Things) signal processing and transmission chips. The proposed issuance of no more than 120 million shares, to raise funds of 1.52 billion yuan, plans to invest in the new generation of data storage master control chip series products research and development and industrialization projects, AIoT signal processing and transmission chip research and development and industrialization projects and Lianru Technology data management chip industrialization base project.

From 2021 to 2023, the company's operating income will be about 579 million yuan, 573 million yuan, and 1.034 billion yuan respectively, and the corresponding net profit will be about 45.1239 million yuan, -79.1606 million yuan, and 52.2296 million yuan respectively. In the first quarter of this year, affected by the growth of data storage master control chip revenue, Lianru Technology achieved an operating income of about 217 million yuan, an increase of 174.65% over the same period last year, and a net profit of about 10.22 million yuan, a significant increase.

It is not difficult to see that the company's performance fluctuates greatly. It is understood that the integrated circuit design industry in which the company is located has the characteristics of fierce competition, large R&D investment, and rapid product upgrading, especially the company's main AIoT signal processing and transmission business is still in its infancy, with high technical requirements, complex processes, and high tape-out costs, which need to continuously upgrade and update existing products to maintain competitiveness.

During the reporting period, the R&D expenses of Lianru Technology were about 155 million yuan, 253 million yuan and 380 million yuan respectively, accounting for 26.74%, 44.10% and 36.73% of operating income respectively. By the end of 2023, the number of its R&D personnel has exceeded 500, accounting for 83.78% of the total number of employees, which is higher than the requirements of the "Decision on Amending the Guidelines for the Evaluation of Scientific and Technological Innovation Attributes (Trial)" issued last month.

Who are the customers? According to the prospectus, Lianru Technology has entered the supply chain system of leading customers in the industry such as customer E, Longsys, Yangtze River Storage, ADATA, Innodisk, Apacer, BIWIN, Jintaike and other leading customers in the industry, and has become its main supplier. During the reporting period, the revenue of the company's top five customers accounted for more than 70% of the operating income, of which the company's sales revenue to customer E and its related parties accounted for more than 30% of the operating income.

According to the prospectus, Lianru Technology has no controlling shareholder, and Fang Xiaoling controls a total of 45.22% of the shares of Lianru Technology and is the actual controller of the company. Hongling Investment, Tongjin Investment, Guoxin Central Enterprise, Tibet Vision, and Xinxiang Investment are all investors.

Among them, Hikvision, the "first brother of security", appeared behind and directly held 22.43% of the shares of Lianru Technology, the second largest shareholder of the company, with the right of veto, the most preferential right, the right of first refusal and other rights at the board level. Its subsidiary, Hikvision Technology, also holds a 14.95% stake in Lianru Technology, with a total stake of nearly 40%.

In any case, this is a case of A-share listing that is worth studying.

A new era of IPOs

On the last day of May, the success of Lianru Technology will bring a long-lost excitement to the outside world: it not only breaks the tranquility of the IPO market for several months, but also seems to provide a sample for benchmarking after the listing of the new "National Nine Articles".

As the outside world has concerned, Lianru Technology has chosen the fourth set of listing standards on the Science and Technology Innovation Board, that is, the expected market value is not less than 3 billion yuan, and the operating income in the latest year is not less than 300 million.

"After the new policy, what kind of standards will be used for IPO review and which companies can meet the new IPO listing standards have always been the focus of everyone's attention. Now the first company to sample a new productivity IPO has surfaced, and the A-share IPO is slowly coming back. A person in the venture capital circle commented.

Prior to this, the last A-share corporate meeting was on February 6, when the 9th review meeting of the Listing Committee of the Beijing Stock Exchange in 2024 was held, and Tongling Nonferrous Metals held its first meeting. Since then, the listing deliberations of various A-share sectors have fallen into "silence". Marco Polo's deliberations at the meeting on May 16 caused a wave of concern and anticipation, but were ultimately postponed.

During this period, a series of high-profile policies were introduced:

On April 12, the State Council issued the "Several Opinions on Regulating and Preventing Risks and Promoting the High-quality Development of the Capital Market", which consists of 9 parts, referred to as the new "National Nine Articles" of the capital market. This is the first time in 10 years that the State Council has issued a special guiding document for the capital market, following the two "National Nine Articles" in 2004 and 2014.

The new "National Nine Articles" put forward an overall framework for the high-quality development of the capital market in the next five years, and at the same time indicated that the access to issuance and listing should be strictly controlled, such as improving the listing standards of the main board and the Growth Enterprise Market, improving the evaluation standards for the scientific and technological innovation attributes of the Science and Technology Innovation Board, and increasing the supervision of delisting, and vigorously promoting the entry of medium and long-term funds into the market.

A few days later, on April 19, the China Securities Regulatory Commission (CSRC) issued the "Sixteen Measures for the Capital Market to Serve the High-level Development of Science and Technology Enterprises" (hereinafter referred to as the "16 Measures for Science and Technology Innovation") to further improve the function of the capital market, optimize the allocation of resources, and make greater efforts to serve the self-reliance and self-improvement of science and technology, and promote the development of new quality productivity.

It can be seen that both the new "National Nine Articles" and the 16 Science and Technology Innovation Articles propose to improve the inclusiveness of new industries, new formats and new technologies to promote the development of new quality productivity, which further highlights the "hard technology" characteristics of the Science and Technology Innovation Board. Subsequently, the China Securities Regulatory Commission (CSRC) also revised the Guidelines for the Evaluation of Science and Technology Innovation Attributes (for Trial Implementation), and the Shanghai Stock Exchange simultaneously revised the Interim Provisions on the Application and Recommendation of the Issuance and Listing of Enterprises on the Science and Technology Innovation Board, further strengthening the strict control of the issuance and listing review while maintaining the normalization of the issuance review.

All this, A-shares are opening a new prelude to listing.

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