Text | Zhou Youhui
Edit | Peng Xiaoqiu
The "ferocious" chip jianghu of the wealth-making movement will add a new IPO.
This is also the third impact of Jerry Technology IPO, as a company mainly engaged in Bluetooth headset chips, Bluetooth speaker chips, intelligent Internet of Things terminal chips, ordinary audio chips, etc. It has been established for 12 years and relies on Zhuhai, an important domestic semiconductor manufacturing town.
Performance has also soared. Revenue climbed from 276 million yuan in 2015 to 2.141 billion yuan in 2020, with a compound annual growth rate of 26.55% in the past three years. From the perspective of net profit, from 2018 to 2020, it reached 259 million yuan, 384 million yuan and 453 million yuan respectively.
(Jelli Technology Business Segment)
Splitting the revenue structure of Jelli Technology can be found that the company's main sources of revenue are Bluetooth speakers and Bluetooth headset chips, and from 2019 to 2020, the revenue contribution of both businesses will account for more than 40%.
For the listing of this matter, Jerry Technology has never given up. As early as 2017 and 2018, Jerry Technology submitted IPO applications twice to register on the main board of the Shanghai Stock Exchange, but both failed. At the time of the second IPO, it was also investigated by the CSRC because of internal control issues. In January 2021, the CSRC officially issued a warning letter on this issue, indicating that Jelli Technology had used personal bank accounts to receive and receive payments outside of body, which was embodied in the company's use of personal bank accounts to receive and pay for goods from 2015 to 2016. The total scale of funds reached 169 million yuan.
The issue of financial compliance did not slow down the pace of Jerry Technology's listing sprint, and only 3 months later it submitted a prospectus on the ChiNext board again, and the sponsor was still CITIC Construction Investment at the time of the second IPO, which planned to raise more than 2.5 billion yuan.
Seizing the downstream market of Bluetooth chips several times, under the rising revenue performance, what are the highlights and hidden worries of Jerry Technology? In the second half of the Bluetooth headset chip, can Jerry Technology be favored by the market again?
First, from zhuhai chip leader out of business
The founder of Jerry Technology is Wang Yihui, one of the few female entrepreneurs in Zhuhai's chip semiconductor industry. In 1992, Wang Yihui came to Zhuhai from his hometown of Chengdu, started from small administrative staff, and slowly grew into a veteran figure in the IC industry.
Before starting his business, Wang Yihui joined the newly established Zhuhai Jianrong in 2003, and then rose all the way to the vice president of the company until he left in 2010 to start a business.
Zhuhai Jianrong can be said to be the "Whampoa Military Academy" of chip semiconductor enterprises in the Greater Bay Area, and Quanzhi Technology and Zhongke Lanxun have a number of technical backbones from Zhuhai Jianrong. The founder of Zhuhai Jianrong is Zheng Zhuorong, a Hong Kong businessman who returned from Silicon Valley, who once explained the company's name, "I think that only by laying a good foundation can we pursue excellence, and I take Zhuhai as the research and development base of Zhuorong Company (Hong Kong) products, build it well, and only then will there be a future for Zhuorong, so it is called Jianrong." ”
During Wang Yihui's tenure, Zhuhai Jianrong swept the chip market of electronic products such as MP3, MP4, U disk, and Bluetooth speakers for many times. In 2010, Wang Yihui pulled Zhang Qiming, technical director of the IC Design Center of Zhuhai Jianrong at that time, and a group of engineers under the latter, and jointly left to establish Jelli Technology, aiming at the domestic Bluetooth chip market.
In order to avoid possible adverse effects, Wang Yihui once entrusted his friend Xu Dapeng to hold 100% of the equity of Jerry Technology on his behalf. Later, Zheng Zhuorong, president of Zhuhai Jianrong, publicly said that the departure of Wang Yihui and others made Zhuhai Jianrong almost paralyzed. After the creation of Jerry Technology, a number of chips were issued, which was a very big blow to Jianrong. Zhuhai Jianrong began to lose money from 2012 and lost money for four consecutive years until 2015. Zhuhai Jianrong has also repeatedly sued Jerry Technology for infringement of intellectual property rights during its IPO.
Looking back at the history of Jerry Technology, grasping the inflection point of industry development and meeting the upstream demand of phenomenon-level products is the key node of its high-speed growth, these two nodes are Bluetooth smart speaker chips and Bluetooth headset chips.
In 2014, Amazon debuted the Echo smart speaker, attracting a number of Internet giants such as JD.com and Tmall to follow. However, because of the poor product experience, the penetration rate at this time is still not high, so the chip production and sales of Jerry Technology in this period are also relatively average.
Until the maturity of AI voice technology in 2018, the Bluetooth smart speaker integrated into the new technology has become a family hit, and was once regarded by major manufacturers as the Internet interactive entrance second only to mobile phones. In 2018, Bluetooth smart speaker shipments instantly jumped from 1.76 million units in 2017 to 20 million units.
After the single product became popular, the chip experience accumulated by Jerry Technology for many years finally came into play, and naturally it will implement the cost performance to the extreme, especially the cost of a single chip is pressed to the 1 yuan range. Zhang Qiming, vice president of Jelli Technology, revealed in an interview that the team racked its brains every day to find ways to save costs, "For example, in the peripheral circuit, the products provided by Jerry Technology will be smaller than the competitors' bare dies." ”
According to the prospectus, in 2017 and 2018, Jerry Technology successively listed two Bluetooth speaker chips, AC690N and AC692N, of which AC692N was successfully applied to xiaomi Xiaoai Bluetooth speaker portable version, and subsequent Jerry Technology developed and supplied chips AC790N for Xiaoai Classmate 3.0.
(Source: Xiaomi 2019 Developer Conference)
The successful cooperation with Xiaomi, the shipment of the overall bluetooth speaker market has increased sharply, and from 2018 to 2020, the business segment of bluetooth speaker chips has brought 2.3 billion yuan of revenue to Jelli Technology, with a total of 1.329 billion units sold, becoming half of the main business of Jelli Technology. Jerry Technology has thus gained a firm foothold in the chip market and squeezed into the head echelon of Zhuhai Chip Company.
Second, roll up the Bluetooth headset chip blood sea, three consecutive years of price reduction of 10%
Jellig Technology's second battle followed 2019 after the surge in performance.
At that time, the Android Bluetooth headset market broke through the patent barriers of Apple headphones one by one, and each company launched a chip solution to improve the bluetooth headset experience while reducing power loss.
Under the R & D team, the Bluetooth chip AC693N launched in 2019 integrates Bluetooth 5.1 technology to achieve seamless switching of the master and slave, and the playback power consumption is as low as 7mA. Compared with imported chips, AC693N in addition to basically meeting the needs of downstream customers, the price with obvious advantages is also very popular in the market, so it was once sold out of stock.
In the same year, Jelli Technology and another headphone chip company, Zhongke Lanxun, "met in a narrow way", which had passed the science and technology innovation board meeting and submitted registration on January 21 this year. In the case of bluetooth chips from other manufacturers, most of them are still in the case of about 10 yuan, and the two have reduced their prices by 10% for three consecutive years, reducing the price of chips to the 1.5 yuan range, rolling up the price war. In the end, the shipments of the two Bluetooth headset chips totaled nearly 3 billion, and the shipment volume was almost equal.
(Bluetooth audio sales unit price comparison chart Source: prospectus)
It is conceivable that the chips of the two companies have almost covered every counter of Huaqiang North during the explosion of Bluetooth headset demand, becoming the "heart" of a treasure, a hundred yuan or even dozens of dollars of Bluetooth wireless headphones, and once also boosted the reproduction of huaqiang North's "highlight moment" of the cottage mobile phone.
Of course, the competitive password that has driven the surge in sales of Jerry Technology chips is not simply a cost advantage, but also its full use of funds.
The prospectus discloses that Jieli Technology and Zhongke Blue News both adopt the sales model of first payment and later goods for downstream customers, while other competitors have account periods ranging from 1 to 3 months. The way to quickly withdraw funds has greatly improved the inventory turnover rate of the two, for enterprises with low R&D expense rates such as Jerry Technology, because there is no technical barrier formed by high R&D investment, the scale of sales is larger through low-cost products, and the efficient use of cash flow is its core competitiveness.
The index of inventory turnover rate is the intuitive embodiment of this strategy, in the most competitive 2019, the inventory turnover rate of Zhongke Blue News was 7.36 times, while Jelli Technology was 4.06 times, which was higher than the industry average of 3.66 times that year. In other words, Jelli Technology can turn over inventory every three months.
(Inventory turnover ratio of each company Source: Prospectus)
Further analysis of performance, Jelli Technology's entire Bluetooth headset chip, 2018-2020 business revenue reached 456 million yuan, 682 million yuan, 956 million yuan, the corresponding gross profit reached 0.88 billion yuan, 214 million yuan, 288 million yuan.
However, after three years of TWS headphone dividend period, the high-growth Jerry Technology is facing a hidden worry that can be clearly perceived.
According to the research data of Xinzhixun, it is expected that in 2021, the annual shipment of Luoda chips (mainly supplying white-brand AirPods, which has been acquired by MediaTek) will be 150 million units, corresponding to 0.75 billion pairs of headphones, close to the annual shipments of the original AirPods, so in fact, the corresponding placement rate of Apple's genuine AirPods + white AirPods has exceeded 80%.
In contrast, the Android camp, the penetration rate of Android TWS headphones in 2020 is only 3.2%, but due to the comprehensive coverage of mobile phone brands such as OPPO, Honor, Xiaomi, Huawei, sony and other mobile phone brands on high-end Android TWS headphones, most of the flagship headphones of these brands take the lead in using chips produced by Hengxuan Technology, which is listed on the Science and Technology Innovation Board.
This means that Jerry Technology, which has been focusing on "learning Apple", has touched the ceiling of the Apple camp TWS headphones, but at the same time, because of the low research and development investment, it cannot win the Android camp brand customers, and will face extremely high market barriers.
According to the judgment of Shanghai Securities, the headset market in the Android camp will usher in an outbreak next, and the placement rate also has the potential to rise to 80%.
TWS headphone placement rates for different camps
In the future, Xiaomi's stake may be the second growth curve breaking point of Jerry Technology. In addition, in the next development plan, Jerry Technology is also trying to find a new round of outlets in the Internet of Things device chips, and 360 million yuan of funds will be used for Bluetooth and WIFI Internet of Things chip upgrade projects.
Third, external capital suddenly invested in shares, and the dividends of the founding team before the listing reached 400 million yuan
After the baptism of the first two IPOs, the capital actions of Jerry Technology are frequent. Compared with the previous one, from the beginning of its inception to the announcement of the second IPO, Jerry Technology has not introduced external capital.
In December 2020, Jerry Technology carried out the first capital increase and share expansion. The introduction of new shareholders Rizhao Zhongrong, Yiwu Huaxin, Shenzhen Zhanxiang, Yuxin Jin, Suzhou Yuanhe, a total of 235 million yuan of subscribed capital, the five companies accounted for a total of 2.86% of the shares, the overall valuation of 8.217 billion yuan. Among them, Shenzhen Exhibition wants to be Transsion Holdings (688036. SH)。
In March 2021, Jelli Technology increased its capital for the second time, introducing new shareholders Xiaomi Technology and Shanghai Huahong (SS), with a total subscribed capital of 280 million yuan, accounting for 3.29% of the shares. Among them, Xiaomi invested 240 million yuan, and the overall valuation reached 8.511 billion yuan. If you add the amount to be raised, Jelli Technology will attract nearly 3 billion yuan of external funds.
Just as Zhongke Blue News introduced the largest supplier, SMIC, binding interests, Shanghai Huahong is also the largest supplier in the upstream of Jerry Technology. From 2018 to 2020, Jelli Technology purchased 460 million yuan, 380 million yuan and 920 million yuan from it respectively.
(Jelli Technology shareholding structure Source: Prospectus )
In addition to the introduction of external capital, Jerry Technology also made four cash dividends to the founding team during the reporting period, including 1 institutional shareholder of Zhuhai Gaoqi and 20 natural person shareholders such as Wang Yihui, Zhang Qiming, Zhang Jinhua and Hu Xiangjun. From 2018 to 2020, the cash dividends of Jelli Technology were 29.88 million yuan, 39.6 million yuan and 399 million yuan, respectively.
Among them, Wang Yihui, Hu Xiangjun, Zhang Qiming and Zhang Jinhua are two brothers and two joint entrepreneurial partners, each of whom is an old colleague who ran away from Zhuhai Jianrong, and also holds the equity of Zhuhai Gaoqi, and the four directly and indirectly control a total of 63.95% of the company's shares. Therefore, if the dividends are distributed in proportion to equity, the vast majority of them fall into the pockets of these four executives. Roughly calculated, the maximum amount of dividends received by the four people is about 299 million yuan.
What is more noteworthy is that in the allocation of 2.5 billion raised funds, 1.1 billion yuan will be used to supplement the working capital, accounting for far more than 30% of the total amount recommended by the regulator.
However, from the historical changes in the equity structure, it can be seen that Jelli Technology has not considered setting up an employee equity incentive platform, and as of March 3, 2021, the company's R & D personnel have reached 241. In the chip design industry, which is fiercely competitive and extremely tests technological competitiveness, the attractiveness of Jerry Technology to high-end talents will obviously be weaker than that of competitors.