“Jin Touyan” dye ink/author
With the further promotion of the registration system, the efficiency of the effective allocation of market resources will be greatly improved, and the deep vitality of the market will be further stimulated. Compared with the main board and the GEM, the most distinctive feature of the scientific and technological innovation board is its scientific and technological innovation attribute. Among them, on December 16, 2022, Chengrui Optics (Changzhou) Co., Ltd. Chengrui Optics (hereinafter referred to as “Chengrui Optics”) applied to the Shanghai Stock Exchange for withdrawing the application documents for listing on the Science and Technology Innovation Board, and the review of it by the Shanghai Stock Exchange was terminated.
For this listing, Chengrui Optics only went through a round of inquiries. The Shanghai Stock Exchange mainly focused on 37 aspects of Chengrui Optics, including procedural compliance, asset independence, personnel, finance, business independence, trust, positioning of the science and technology innovation board, market position and market space, independence of the recommendation institution and the quality of practice, and the ability to continue operation.
On the one hand, during the reporting period, Chengrui Optics continued to lose money and blood, and was asked whether it had the ability of sustainable operation. On the other hand, Shanghai Stock Exchange has asked three consecutive questions about whether it conforms to the positioning of the science and technology innovation board, mainly concerning whether the identification of the industry is accurate, the embodiment of core technology in specific products, the source of core technology, the inheritance of patents, whether technology mainly depends on the realization of machine equipment, whether core technology has progressiveness, and whether the layout field belongs to the mainstream technical route or trend of future industry development, And whether the product has the risk of technical route iteration.
1、 The accuracy of industry identification and the foresight of product layout have been “questioned”, and the source and progressiveness of core technologies have yet to be investigated
According to the prospectus, the main business of Chengrui Optics is the R&D, manufacturing and sales of optical components such as plastic lens, WLG glass lens and glass-plastic hybrid lens, camera module, optical transmission, etc.
For this listing, Chengrui Optics applied to withdraw the materials after only one round of inquiry. In terms of the positioning of the science and technology innovation board, the regulatory authorities continuously raised three questions, including the industry, core technology and the progressiveness of core technology.
According to the application materials, (1) According to the Industrial Classification of National Economy, Chengrui Optics belongs to “C3989 manufacturing of other electronic components” in “C39 computer, communication and other electronic equipment manufacturing industry”.
(2) Chengrui optical products are mainly used in smart phones and other fields. According to the Classification of Strategic Emerging Industries (2018), this field belongs to “1.1.2 New computer and information terminal equipment manufacturing” of “1.1 Next generation information network industry”, a subcategory of “1 New generation information technology industry”. According to the Interim Provisions of the Shanghai Stock Exchange on the Application and Recommendation for the Issuance and Listing of Enterprises on the Science and Technology Innovation Board (revised in April 2021), the current main application fields of Chengrui Optics and its products belong to the new generation of information technology industry.
Therefore, in terms of the industry, SSE requires Chengrui Optics to explain: (1) Chengrui Optics is the basis for manufacturing other electronic components; (2) The company’s products, rather than the downstream fields, correspond to the situation and basis of the Strategic Emerging Industry Classification (2018); (3) Conclude the situation of comparable companies in the contract industry and analyze the accuracy of Chengrui optical industry identification.
In this regard, Chengrui Optics said that optical lens is the main product of Chengrui Optics. The optical lens product is an important achievement of “small size, high integration, high resolution optical lens design and assembly technology”, belongs to the direction of optical optoelectronics, and is an important component of the development direction of electronic information manufacturing industry.
In addition, the prospectus discloses that (1) the core technology of Chengrui optics includes optical lens technology, optical lens technology, optical transmission motor technology, and automatic assembly technology of optical components; (2) Chengrui Optics has profound experience in ultra-precision optical mold design and manufacturing, high-precision optical lens manufacturing, automatic production, whole-process digital simulation and software algorithms.
(3) The mold factories of Chengrui Optics at home and abroad are equipped with industry-leading processing equipment, and using self-developed algorithms and control software, they can manufacture ultra-precision optical plastic and glass molding molds with the highest accuracy level in the industry; However, according to the disclosed assets, Chengrui Optics did not own the software copyright, and there were cases of purchasing self-made equipment, tooling molds and imported optical equipment through related parties during the reporting period.
(4) The manufacturing process of optical lens is relatively complex. During the manufacturing process, it is necessary to not only meet the production process, but also meet the processing accuracy requirements, purchase expensive high-precision processing equipment, and invest large construction and decoration costs. During the reporting period, the issuer mainly purchased imported optical equipment through AACTechnologies Ltd., an overseas trading platform under Raytheon Technology.
(5) In 2009, it acquired ISQR Optical Lens Design Company of Japan, and in 2010, it acquired Kaleido, a Danish start-up technology company with precision optical glass mold processing technology, and laid out the research and development of WLG technology on this basis; (6) Chengrui Optics and its holding subsidiaries have a total of 3025 authorized patents, of which many have been received, mainly from the reorganization of optical-related businesses. During the reporting period, Chengrui Optics has formed 329 domestic invention patents with main business income and 334 overseas invention patents.
In response, in the inquiry letter, the Shanghai Stock Exchange requested Chengrui Optics to explain the following information: (1) the specific embodiment of core technology in product production, testing and other links; (2) Whether the technology mainly depends on the realization of machinery and equipment; (3) Reasons for not owning software copyright;
Further discuss the specific content and progressiveness of lens mold design and processing technology, optical device automatic assembly technology in combination with purchased equipment and mold; (4) Source of main machinery and equipment; (5) Reasons for purchasing imported equipment through related parties; (6) Import dependence of main machinery and equipment.
(6) The source, formation and development process of core technology, and the relationship with overseas acquisition of subsidiaries; (7) Analyze the reasons for patent succession according to overseas equity acquisition, asset integration of spin-off and other reasons. (8) The relationship between core technology and related invention patents, and whether the core technology is mainly represented as invention patents. (9) The reason why the number of invention patents used by Chengrui Optics for its main business is far lower than the total number of invention patents.
Then, in terms of the progressiveness of core technology, the prospectus discloses that (1) according to the composition of optical lens materials, optical lenses can be classified into three types: plastic lens, glass plastic hybrid lens, and glass lens; (2) The glass-plastic hybrid lens combines the advantages of glass lens and plastic lens, and is expected to gradually become a new direction for lens upgrading in smart phones, automobiles and other industries; (3) Before the advent of the WLG technology independently developed by Chengrui Optics, the glass-plastic hybrid lens could not be mass produced in an economical and efficient way, and could only be applied to a few flagship models.
(4) In addition to WLG technology, the main aspheric glass lens manufacturing processes in the market also include GMO molding glass technology and WLO wafer level optical component technology; At present, only Chengrui Optics uses WLG glass lenses in the industry, and the others are mainly GMO glass lenses; (5) In the field of mobile phone lens, at present, only Chengrui Optics uses WLG technology to mass produce glass-plastic hybrid lens, and the other is mainly plastic lens.
In this regard, Shanghai Stock Exchange requires Chengrui Optics to explain: (1) The advantages and disadvantages, application fields and technical difficulties of plastic lens, glass-plastic hybrid lens and glass lens are listed in the table, and comparative analysis is made; (2) The main reasons for producing plastic lens and glass-plastic hybrid lens; Whether it has the technical level and advantages of producing glass lenses; (3) The analysis shows that the glass-plastic hybrid lens is the basis and rationality of the development direction of the industry; Whether the glass-plastic hybrid lens is the mainstream technical route or trend of the future industry development.
(4) The table lists the specific contents, technical differences, advantages and disadvantages of the three aspheric glass lens manufacturing processes of WLG, GMO and WLO. At present, the reasons why companies in the industry mainly use GMO to take glass lenses and why companies adopt the WLG route; Future technical development direction and analysis basis; (5) In combination with the raised investment project, explain whether the glass-plastic hybrid lens is the main product of Chengrui Optical’s future optical lens business, and whether Chengrui Optical has the risk of technical route iteration.
It should be pointed out that the Science and Technology Innovation Board gives priority to supporting the listing of enterprises with key core technologies, outstanding scientific and technological innovation ability, and strong growth ability that mainly rely on core technologies to carry out production and operation.
From the inquiry, it can be seen that whether an enterprise can successfully impact the science and technology innovation board depends on whether its industry positioning is accurate. In this regard, the CSRC requires Chengrui Optics to explain whether it conforms to the positioning of the Scientific Innovation Board in combination with the relevant provisions of the Scientific Innovation Board.
According to Article 2 of the Interim Provisions of the Shanghai Stock Exchange on the Application and Recommendation for the Issuance and Listing of Enterprises on the Science and Technology Innovation Board, the application and recommendation for the issuance and listing of enterprises on the Science and Technology Innovation Board should be based on whether the issuer conforms to the orientation of the Science and Technology Innovation Board in accordance with the requirements of the Science and Technology Innovation Board in the Administrative Measures for the Registration of Initial Public Offerings of Shares on the Science and Technology Innovation Board (Trial), the Guidelines for the Evaluation of the Science and Technology Innovation Attributes (Trial) and these provisions.
Article 4 An issuer applying for the issuance and listing of the Science and Technology Innovation Board shall belong to the high-tech industries and strategic emerging industries in the following industries, namely, seven major fields, including the new generation of information technology, high-end equipment, new materials, new energy, energy conservation and environmental protection, biological medicine, and other fields in line with the positioning of the Science and Technology Innovation Board.
Among them, financial technology and model innovation enterprises are limited to be listed on the Science and Technology Innovation Board. Real estate and enterprises mainly engaged in financial and investment businesses are prohibited from issuing and listing on the Science and Technology Innovation Board.
In addition, Article 19 of the Review Rules for Stock Issuance and Listing of Shanghai Stock Exchange recently issued points out that an issuer applying for initial public offering of shares and listing on the Science and Technology Innovation Board shall carefully evaluate whether it meets the requirements of the Science and Technology Innovation Board in accordance with the relevant provisions of the CSRC and the Exchange, and submit a special statement that meets the positioning of the Science and Technology Innovation Board; The sponsor shall make professional judgment on whether the issuer meets the requirements of the scientific and technological innovation attribute and issue special opinions on whether the issuer meets the positioning of the scientific and technological innovation board.
In this regard, the main product of Chengrui Optics is optical lens. The reply to the inquiry said that it belongs to the new generation of information technology. Is there sufficient basis and reason? From the perspective of its impact on the science and technology innovation board, Shanghai Stock Exchange has asked three consecutive questions about whether it conforms to the positioning of the science and technology innovation board, mainly concerning whether the identification of the industry is accurate, the embodiment of core technology in specific products, the source of core technology, the inheritance of patents, whether the technology mainly depends on the realization of machinery and equipment, whether the core technology is progressiveness, and whether the layout field belongs to the mainstream technology route or trend of future industry development, And whether the product has the risk of technical route iteration.
It can be seen that Shanghai Stock Exchange has made a detailed inquiry on Chengrui Optics in terms of the progressiveness of core technology, the dependence of core technology on machinery and equipment, and whether the product layout is forward-looking. This shows that the industry positioning and the positioning of the scientific and technological innovation board are undoubtedly the top priority of the listing review of the scientific and technological innovation board.
2、 The gross profit rate is lower than the average of the peers, which has caused regulatory concern. How can we achieve sustainable profits through “blood loss” and losses for consecutive years?
In addition to the positioning of the science and technology innovation board, the gross profit rate of the enterprises to be listed on the science and technology innovation board is an important manifestation of their ability to continue operation. During the reporting period, the gross profit rate of Chengrui Optics is lower than the average of comparable companies.
According to the prospectus, (1) from 2019 to 2021, optical lenses contributed 227.775 million yuan, 340.3535 million yuan and 396.4882 million yuan to Chengrui Optics, accounting for 100.00%, 106.03% and 84.65% respectively, which are the main sources of gross profit; (2) During the same period, the gross profit rate of Chengrui Optical’s main business was 2.19%, 19.39% and 19.53% respectively, showing an overall growth trend; (3) During the same period, the gross profit margin of Chengrui optical lens was 2.19%, 21.26% and 26.59%, and the average gross profit margin of comparable companies was 46.67%, 51.08% and 44.93%; (4) From 2020 to 2021, the gross profit margin of Chengrui optical camera module business is – 35.21% and 7.93% respectively. The gross profit margin of Chengrui optical camera module is also lower than the average of comparable companies in the same industry.
Based on the above situation, the Shanghai Stock Exchange asked Chengrui Optics to reply and explain: (1) the gross profit of the products of 6P, 5P and other segments; (2) Combining the reasons for the change of product structure and unit cost structure, quantitatively analyze the reasons for the change of gross profit rate of optical lens and camera module business, and comprehensively analyze the reasons for the change of gross profit rate of main business in combination with relevant contents; (3) In combination with product structure, gross profit structure of main product units, raw material cost, etc., analyze the difference and rationality of gross profit rate between the company and comparable companies in the same industry in a quantitative way, and comprehensively analyze the difference and rationality of comprehensive gross profit rate between the company and comparable companies in the same industry in combination with relevant contents.
In response, Chengrui Optics said that its gross profit margin was lower than that of comparable companies in the same industry because of the difference in customer structure between Chengrui Optics and comparable companies, and Chengrui Optics was expanding overseas terminal mobile phone customers. Considering that the company’s business is still in the expansion stage, the comprehensive gross profit rate is lower than that of comparable companies in the same industry. With the continuous development of the company’s business, the product structure and customer structure are continuously optimized, and the comprehensive gross profit rate is expected to increase.
According to Article 76 of the Standards for the Contents and Forms of Information Disclosure by Companies that Offer Securities to the Public No. 41 – Prospectus of Science and Technology Innovation Board Companies, the issuer’s analysis of the operating results should fully explain the reasons, impact degree and risk trend of the main influencing items, matters or factors in terms of the changes in the value and structure, Generally, it shall include the following contents: (1) the composition and change reasons of operating income and main business income during the reporting period; Analyze the specific impact of changes in sales volume, price and structure of main products or services on the increase and decrease of operating revenue according to the category and regional distribution of products or services, and in combination with customer structure and sales model; Consistency between business execution data such as production and sales volume or contract and order completion volume and financial confirmation data; If there is seasonal fluctuation in operating income, the reasons shall be explained;
（2） Segment information of operating costs, composition of main cost items and reasons for changes during the reporting period; Combined with the quantity and price changes of main raw materials, energy and other procurement objects, analyze the factors affecting the increase and decrease of operating costs;
（3） Composition and change of gross profit during the reporting period; Changes in comprehensive gross profit rate and gross profit rate of products or services; Explain the main influencing factors and change trend of gross profit rate by means of data analysis; If there are the same or similar products or services of companies in the same industry, it is necessary to compare and analyze whether there are significant differences in the gross profit rate and the reasons;
（4） The main composition and reasons for changes of sales expenses, management expenses, R&D expenses and financial expenses during the reporting period, as well as the change trend of expense level during the reporting period; If there are significant differences compared with comparable companies in the same industry, the reasons should be analyzed in combination with business characteristics and business model; For R&D expenses, the overall budget, expenditure amount and implementation progress of corresponding R&D projects should also be disclosed;
（5） Non-recurring profit and loss items that have significant impact on the operating results during the reporting period; The impact of the investment income or value change of the invested entity or financial management instrument not included in the scope of the consolidated statements on the stability of the company’s operating results and profitability; Distinguish and disclose the impact of government subsidies on the issuer’s reporting period and future period by analyzing the income related or asset related;
（6） Disclose the tax payable and paid by the company in the reporting period by tax category, and explain the impact of major tax policy changes and tax preferences on the issuer;
（7） An issuer that has not yet made profits or has accumulated unrecovered losses shall analyze the causes of such situations in combination with the characteristics of the industry, and fully disclose the impact of unprofitable or accumulated unrecovered losses on the company’s cash flow, business development, talent attraction, team stability, R&D investment
“Jin Touyan” dye ink/author