Text | Wang Manhua
Source | Invest in Net East Forty Capital
On April 12, Weijie Chuangxin (Tianjin) Electronic Technology Co., Ltd. (hereinafter referred to as "Weijie Chuangxin") officially landed on the Science and Technology Innovation Board, the IPO issue price was 66.6 yuan / share, after the opening, once fell 30.9%, at 46.0 yuan / share, as of press time, the total market value of Weijie Chuangxin was 20 billion yuan.
Founded in 2010, Weijie Chuangxin is mainly engaged in RF front-end chips, and is a supplier of head mobile phone brands such as Xiaomi, OPPO, and Vivo. Before the IPO, the company obtained a total of 8 rounds of financing, including a number of investment institutions with state-owned backgrounds such as Guoke Jiahe and Tianchuang Capital, and mobile phone giants such as Huami OV.
Rong Xiuli, the helmsman behind Weijie Chuangxin, is also worthy of attention. Rong Xiuli is not only a standard female student bully, but also the founder of the first generation of domestic mobile phone "Tianyu Mobile Phone", the brand's market share once ranked first in China, and she was also known as the "godmother of mobile phones" by the industry. Although Tianyu Mobile phone was inferior to the opponent in the later domestic mobile phone competition, after several years, Rong Xiuli returned to the public vision with the new project Weijie Chuangxin, and today harvested the first IPO in her life.
The 59-year-old female scholar, from researching tractors to making mobile phones and chips, is now worth more than 4.8 billion
Looking back on Rong Xiuli's life experience in the first 59 years, it is a legend.
Born in 1963, Rong Xiuli has achieved excellent results since she was a child, and at the age of 16, she was admitted to the School of Mechanical and Automotive Engineering of Hunan University to study internal combustion engines. After graduation, Rong Xiuli was assigned to the Luoyang Tractor Research Institute as an engineer, mainly responsible for the research of tractor internal combustion engines, which she did for ten years, and also went all the way from engineer to the middle level of the enterprise.
However, in the 1990s, with the rapid development of the economy, Rong Xiuli began to be uneasy with the status quo. She once recalled in an interview with the media: "At that time, the house price in some cities in Henan had risen to nearly 1,000 yuan per square meter, but my salary was only 105 yuan. Therefore, Rong Xiuli came up with the idea of starting a business in the sea. However, after she left her job, she did not choose to start a business directly, but first went to Beijing to obtain an MBA from China Europe Business School.
In 1993, after the completion of the MBA program, Rong Xiuli entered a company that operated communication equipment such as telephone exchanges and was responsible for the sales of communication equipment. At the time, Paragon, Finland's largest mobile phone agency, was planning to enter China and commission her company to conduct market research. After a year of research, Rong Xiuli recommended that the company win the Chinese agency right of Bai Li Feng.
However, at that time in China, people's mainstream communication tools were still BP machines, mobile phones were still luxury goods, and sales were not good, so the company lost 1.6 million yuan. When the boss decided to immigrate, Rong Xiuli chose to take on the debt, took over the inventory and the mobile phone agency rights of Bailifeng, and established Bailifeng Communications Company. By 1998, the company had become an agent for Samsung, Ericsson and other brands in China, with annual sales of more than 1 billion yuan.
This time, Rong Xiuli, who "loves toss", is not satisfied with just being a mobile phone agent. So in 2002, she took out all her 10 million yuan savings to register Tianyu Longtong Communication Equipment Company and began to develop her own mobile phone. However, it is not easy to independently complete the "research and production and marketing" of a mobile phone, after experiencing a series of trial and error, loss, Rong Xiuli began to change her thinking, decided to introduce MediaTek's mobile phone chip, and then handed over the production and processing of the mobile phone to Foxconn, and concentrated on channel sales.
Tianyu Langtong, who was "lightly armed", quickly opened the mode of running wildly. In 2008, the shipment volume of Tianyu mobile phones reached 21 million units, achieving sales revenue of 8 billion yuan, and the market share ranked first in domestic brand mobile phones. In the same year, Rong Xiuli, with a net worth of 4.2 billion yuan, ranked 11th on the Hurun IT rich list.
The turning point came in 2009, the year Apple released the iPhone 3GS, and the mobile phone market has since entered the era of smartphones. However, the main function machine of Tianyu has not been able to keep up with the changes in the industry, and gradually showed its decline.
In 2010, when Tianyu was still struggling with the competition with brands such as Apple, Samsung, and Xiaomi, the 47-year-old Rong Xiuli had set her sights on a new industry, RF front-end chips, and founded Weijie Chuangxin.
Today, the 12-year-old Weijie Chuangxin has successfully landed on the science and technology innovation board, and Rong Xiuli has also won the first IPO in her life.
According to the prospectus, before the IPO, Rong Xiuli held a total of 24.19% of the company's shares through direct or indirect means, and if calculated by the market value before the publication, Rong Xiuli's net worth would exceed 4.8 billion yuan.
With an annual income of 1.8 billion, Huami OV is a shareholder
The former "godmother of mobile phones" has struck again, how is the new project doing?
The main business of Weijie Chuangxin is the research and development, design and sales of RF front-end chips, the main products are RF power amplifier modules (PA modules), others include RF switch chips and Wi-Fi RF front-end modules and receiver modules, etc., mainly used in smart phones, tablets, smart wearable devices and other mobile terminals, as well as wireless broadband routers and other communication equipment.
At present, Weijie Chuangxin is a leading domestic PA module company, according to CB Insights data, Weijie Chuangxin's 4G RF power amplifier shipments rank first in the country.
According to the prospectus, in the first half of 2021, the top five customers of Weijie Chuangxin are Vivo Mobile (vivo), Huaxinke (corresponding to the end customers are Xiaomi, Wingtech Technology), Shenzhen Huansheng (corresponding to OPPO, Waterward), Tycoyuan (corresponding to Huaqin Communications, Longqi Technology, Wingtech Technology, Transsion Shares) and Glory, and the total sales amount of the five companies accounted for 99.08%.
In terms of financial data, from 2018 to 2020, the revenue of Weijie Chuangxin was 284 million yuan, 581 million yuan and 1.81 billion yuan respectively, with an annual compound growth rate of 152.48%; in the first half of 2021, the company's operating income was 1.702 billion yuan, almost the same as the annual revenue in 2020. During the reporting period, the company's net profit was -33.8588 million yuan, -29.9941 million yuan, -77.7291 million yuan and 4.2586 million yuan, respectively, and achieved a turnaround in the first half of 2021.
From 2018 to the first half of 2021, the gross profit margin of Weijie Chuangxin was 21.89%, 18.04%, 17.92% and 26.61%, respectively. It is worth noting that while the number will improve in 2021, it is still below the industry average.
(Comparison of gross margins of comparable companies, source: prospectus)
Specifically, the PA module is the main source of income for Jie Chuangxin. During the reporting period, the product contributed 92.16%, 96.09%, 88.59% and 71.57% of the revenue respectively. However, at present, the product models of Weijie Chuangxin PA module are mainly concentrated in 4G, and the revenue accounted for 93.78%, 98.13%, 89.30% and 73.58% in the same period.
At present, the penetration rate of 5G smartphones is increasing, and the market demand for more integrated RF front-end solutions is increasing. In this context, Weijie Chuangxin also mentioned in the prospectus: "The company does not yet have the complete capability of 5G high-integration RF front-end architecture solution, and faces the risk of higher technical challenges in the process of 4G to 5G iteration".
Along the way, Weijie Chuangxin has also attracted the favor of a large number of capitals.
According to CVSource investment data, since its establishment, Weijie Chuangxin has obtained a total of 8 rounds of financing, and the investors include more than ten investment institutions and mobile phone industry chain giants such as Guoke Jiahe, Huaxin Venture, Tianchuang Capital, Huaden International, MediaTek, Huami OV and so on.
Before the IPO, MediaTek's company Gaintech held 28.12% of the shares of Weijie Chuangxin, which was the company's largest external shareholder, while Guijin Capital, Hubble Investment, OPPO Mobile, Vivo Mobile, and Xiaomi Fund held 3.65%, 3.57%, 3.39%, 2.61% and 1.74% respectively.
It is worth mentioning that Weijie Chuangxin is also the first IPO that OPPO has harvested since it participated in the primary market investment.
Another card neck track, a number of companies are lining up for IPOs
First do a simple science popularization.
The wireless communications we mention in daily life such as 2G, 3G, 4G, and 5G mainly use electromagnetic waves to achieve information transmission between multiple devices such as base stations and mobile phone terminals. The main RF front end of Weijie Chuangxin is the core component of the wireless communication module, including RF power amplifiers, RF switches, filters and duplexers, low-noise amplifiers and other RF devices, and the function is to transmit and receive radio signals between devices.
China Merchants Securities pointed out in the report that the RF front end is crucial to the wireless communication performance of mobile phones, which determines the communication mode, received signal strength, call stability, transmission power and other important performance indicators that the mobile terminal can support, which directly affects the end user experience. In addition to communication systems, wireless connectivity systems in handheld devices (WiFi, GPS, Bluetooth, FM, NFC, etc.) also have a strong demand for RF front-end chips.
According to QY Research, the global RF front-end market size in 2019 was $16.957 billion, and the agency predicts that the global mobile RF front-end market size is expected to reach $25.4 billion in 2025.
Due to the high technical threshold of RF front-end devices, the difficulty of research and development, and the late start of domestic enterprises, the main players in the global RF front-end market are still mainly American and Japanese manufacturers. According to Yole Development, Murata, Skyworks, Broadcom, Qorvo and Qualcomm together account for 79% of the global market share.
However, with the rapid penetration of 5G network deployment and 5G smartphones, the market demand for RF front-end has surged, and a number of RF front-end chip manufacturers have emerged in China in recent years.
According to the incomplete statistics of the investment network, the local RF front-end enterprises that have been listed at present include Zhuosheng Micro, Maijie Technology, Xinwei Communications, Kuangda Technology (Core Investment Micro), Ai Wei Electronics, Weijie Chuangxin and so on. Among them, Zhuoshengwei has the highest market value, with a close of about 63 billion yuan as of the close of trading on April 11.
In addition, four companies, Haoda Electronics, Feijun Technology, Guobo Electronics and Huizhi Microelectronics, are also promoting the listing plan. Guobo Electronics has now passed the meeting, and Feijun Technology and Huizhi Microelectronics have carried out listing counseling for the record.
Unlisted companies are also constantly financing. The super material information of the main RF front-end filter and duplexer has obtained a total of 4 rounds of financing in the past year, investors include Dachen Caizhi, Daxing Investment, Silk Road Huachuang, Guofu Capital, etc.; in January 2022, 5G RF front-end manufacturer Chengxin Semiconductor obtained a round of financing of 1 billion yuan, jointly led by China Internet Investment Fund and Wuyuefeng Kechuang, and more than 10 institutional investors such as CICC Capital followed the investment; in March, Xingyao Semiconductor announced the completion of a round of financing of 100 million yuan, and the investors included Walden International, Huaqin Technology, Longqi Technology, Tianlong Mobile, etc.; Subsequently, Pingang Microelectronics also announced the completion of the C round of financing, and the investors include Chengdu Science and Technology Innovation Group, Chengdu Technology Transfer Group, Chongning Capital, etc.