Recently, Suzhou Minghao Sensor Technology Co., Ltd. (hereinafter referred to as "Minghao Sensor") submitted a prospectus on the Shanghai Stock Exchange to be listed on the board.

titanium media APP noted that the largest shareholder of minghao sensor is a listed company (002079.SZ), and the company's current actual controller Wu nianbo, Wu wanghao and his son are also the actual controller and chairman respectively. In the 1990 s, his father, Wu Nianbo, struggled to start a business and then successfully sent it to the capital market. Today, the post-80s son Wu Wenhao continues to start his own business with the support of his father, pushing Minghao to sense the impact of IPO listing. But also because of this, the "independence" of Minghao sensor was questioned.

Although the performance of Minghao Sensor has been growing year after year with the support of a group of capital, compared with a group of international MEMS giants, Minghao Sensor still has problems such as a single product structure and lower gross profit margin than its peers.

revenue from main products accounts for more than 90%

Public information shows that Minghao Sensor is a chip design company specializing in the research and development, design and sales of MEMS sensors, with a complete core technology architecture including chip design, manufacturing process, packaging testing, and software algorithms. The predecessor of the company was the American Miradia (Ming Rui Optoelectronics), which was established in 2003. At the end of 2010, the listed company acquired Miradia for US $3.6 million, and then invested in the establishment of Ming Hao Sensor on this basis in the following year. The team is currently located in Suzhou, Shenzhen, Silicon Valley in the United States and Hsinchu in Taiwan.

Since its inception, Minghao Sensor has been laid out around MEMS inertial sensors, which are mainly used in consumer electronics such as smart phones, smart wearables, tablets/laptops, smart homes, smart livestock and other IoT fields, and in-vehicle applications. The company's end customers include Glory, Xiaomi, Lenovo, Goer, Samsung, Google, Comcast, and so on.

although minghao sensor plans to be listed on the sci-tech board, titanium media APP found that due to capital and capacity constraints, the company is a MEMS sensor enterprise operating in a Fabless mode. except that some functional verification test requirements are met by its own test production line, wafer manufacturing, wafer testing, packaging and some functional verification tests are all entrusted to a representative factory.

from the performance point of view, Minghao sensing revenue has gradually increased in recent years. According to the prospectus, from 2020 to 2022 (hereinafter referred to as the "reporting period"), the company's operating income was 85.0351 million yuan, 169.783 million yuan and 197.899 million yuan respectively; the net profit attributable to the owners of the parent company was -50.4085 million yuan, -24.4305 million yuan and 27.9877 million yuan respectively. Non-net profit was -21.1244 million yuan, 14.658 million yuan and 26.1035 million yuan respectively.

For the 2020 and 2021 years of the net profit loss amount is larger, Ming Hao sensor explained that the main is the implementation of equity incentives to confirm the high share-based payment costs. After deducting the confirmed share payment fee, the company has achieved a profit in 2021.

In terms of specific business, the company's main products include MEMS accelerometers, MEMS pressure sensors and sensor modules. During the reporting period, MEMS accelerometers accounted for 93.92, 96.70 and 98.70 percent of the main business revenue, respectively, with a relatively single product structure.

But even from the point of view of the main products, Minghao Sensing is still not competitive enough compared with international leading enterprises. According to YoleIntelligence statistics, the market for inertial sensors in 2021 is still mainly occupied by international manufacturers. The top five manufacturers in the accelerometer, gyroscope and IMU markets are all international manufacturers, accounting for 84%, 83% and 88% of their respective markets respectively. According to Yole Intelligence statistics, in 2021 Minghao sensing MEMS accelerometer global sales accounted for only 2.11 percent, ranking seventh in the world, the market share compared with the head manufacturers, there is still a large gap.

ASIC chip supplier "single"

The development of the sensor industry is inseparable from huge financial support. Although Minghao's sensor volume is still far from the international giants, there is no lack of capital support behind it.

eye check shows that minghao sensor has completed three rounds of financing. shareholders include large capitals such as shangqi capital, yuanhe holding, zhidao capital, mingshan capital, guosheng capital, Huaxiang group, teda technology investment, guolian investment and well-known VC/PE. in addition, minghao sensor has also obtained investment from industrial capitals such as millet, SAIC and so on.

as of the eve of the IPO, the listed company is the largest shareholder of minghao sensor, with a shareholding ratio of 21.63. Suzhou tongbo, the controlling shareholder, also holds 7.97 per cent of minghao sensor, making it the fourth largest shareholder of the latter. Wu Nianbo, Wu Wei Hao, DAVIDDA-WEI WANG for the Ming Hao sensing of the actual controller, three people together control Ming Hao sensing 40.65 percent of the shares of the corresponding voting rights. Among them, Wu Nianbo is the actual controller and Wu Wenhao is the chairman.

In terms of operation, Minghao Sensor relies more on major shareholders.

In the prospectus, Minghao Sensor mentioned that due to the late start of the domestic MEMS industry and the non-standard characteristics of MEMS sensor packaging and testing, there is a lack of professional foundries in China to provide a full range of foundry services. Therefore, in the early days of its establishment, the company established the packaging and testing system of MEMS accelerometers with the advantage of shareholders, and purchased packaging and testing services from it. For each of the reporting periods, the Company's related purchases amounted to $20.7159 million, $30.7394 million and $33.2722 million, respectively, accounting for 25.41 percent, 20.22 percent and 21.18 percent of the total purchases for each period, respectively.

Titanium Media APP noted that Minghao Sensing is also closely related to indirectly held listed companies (688052.SH). The company mentioned in the prospectus that during the reporting period, ASIC chips, one of the company's raw materials, were purchased from the company, and the company chose to be the sole supplier of such products. The purchases were $22.3933 million, $34.5222 million and $46.5365 million, respectively, accounting for 27.47 per cent, 22.71 per cent and 29.62 per cent of the total purchases for each period, respectively. As a result, the company's procurement of ASIC chips runs the risk of relying on a single supplier.

in addition, since the private equity fund invested by the largest shareholder is more than 5% of the shareholders of the listed company, minghao sensor also disclosed the purchase with reference to related party transactions. It is worth noting that the above two related transactions accounted for 52.88 per cent, 42.93 per cent and 50.8 per cent of the total procurement of Minghao Sensing, respectively, which has accounted for "half of the country".

Gross margin below peers by period

The prospectus shows that from 2020 to 2022, Minghao Sensing's consolidated gross margin will be 18.83 percent, 30.64 percent and 34.24 percent, respectively, lower than the average of 52.16 percent, 50.39 percent and 52.75 percent of comparable companies in the same industry in China. The explanation given by Minghao Sensor is that "there are differences in the main product types and downstream application areas".

titanium media APP learned that among the comparable companies of minghao sensing, the main products are MEMS microphones, and the downstream application fields are the same as the company in the fields of smart phones, tablet computers, notebook computers, wearable devices and smart homes. The main products are military MEMS inertial sensors, which are not sensitive to price. Goermicro's main products are MEMS acoustic sensors, which are used in the field of consumer electronics, however, its products use outsourced chip solutions accounted for a relatively high proportion. Products are mainly uncooled infrared thermal imaging MEMS chips, infrared thermal imaging detectors, movements, complete machines, etc., downstream applications include military and civil security. Compared with and, Minghao sensor products are mainly consumer-grade products, which have a huge market space but more market participants, making the gross margin level relatively low.

perhaps minghao sensor is also aware of the limitations of the company's products. in this IPO, minghao sensor plans to raise 0.62 billion yuan, mainly for high-performance and high-reliability MEMS inertial sensor development and system application projects, research and development center construction projects, MEMS sensor test base construction projects, etc.

however, titanium media APP noted that the research and development costs of Ming Hao sensor in recent years have a downward trend. From 2020 to 2022, the research and development costs of Minghao Sensing are 32.1655 million yuan, 31.7097 million yuan and 22.3331 million yuan respectively, and the company's research and development cost rate in the past three years is 16.64 percent, 9.98 percent and 11.27 percent respectively, which is 17.15 percent and 21.99 percent lower than the industry average in 2021 and 2022. For the lower R & D expense rate, the company explained that it was mainly due to the relatively small size of the company's revenue in 2020 and the relatively high R & D expense rate. From 2021 to 2022, the company's revenue scale increased significantly, so the R & D expense rate decreased while R & D expenses continued to grow.

however, from a numerical point of view, the overall research and development cost of minghao sensor in 2022 has been reduced by nearly 9.4 million yuan. in response, titanium media APP also sent a letter to the company asking for specific reasons, but as of the time of publication, the other party did not reply. (this article starts with titanium media APP, by Yu ying)