Shulou(Shulou.com)11/24 Report--

Zhonghe Technology, Xiaomi's first smart car industry chain company, terminated IPO.

Zongmu technology has been established for ten years, mainly engaged in intelligent driving systems, products account for more than 10% of the domestic independent brand fusion parking market share, partners including FAW, Changan and ideal, and so on.

Zongmu submitted its listing application to the Shanghai Stock Exchange in November last year and responded to review inquiries at the end of March this year. IPO has now been officially terminated.

Zhonghu Technology IPO terminated the Shanghai Stock Exchange disclosed that not long ago, Longmu Technology and sponsor Huatai United Securities withdrew their listing application, and according to relevant regulations, the Shanghai Stock Exchange terminated the examination and approval of its listing.

In late November last year, Zongmu Technology submitted an application for listing on the Shanghai Stock Exchange, sprinting the first shares of Science and Technology Innovation Board, a supplier of intelligent driving, to issue 32.11 million shares in a public offering, with a planned fund-raising amount of 2 billion yuan.

According to the prospectus, its revenue was 49 million yuan last year in 2019, 83 million yuan in 2020, 227 million yuan in 2021 and 90 million yuan in the first quarter of 2022.

Investment in R & D is also growing rapidly, with 119 million yuan invested in 2019, 171 million yuan in 2020 and 268 million yuan in 2021.

It is clear from the chart that R & D expenditure exceeded operating input in the publicly disclosed financial cycle, even twice revenue in 2019 and 2020.

In the first quarter of 2022, Zongmu Technology employs a total of 835 people, of which 517 are R & D personnel, accounting for 61.92%.

High R & D investment has brought the advantage of hardware self-research, but at the same time, the profit index in the financial report data is not very good-looking, losing money for three consecutive years.

This is also one of the main contents questioned by the media after Zhonghu Technology submitted its listing application:

The business still stays at the stage of burning money, and the deficit gap is still expanding. The loss state of the company after listing may persist or the cumulative uncompensated loss may continue to expand, which may face the risk of directly terminating the listing of the stock.

At the end of March this year, Zongmu Technology also responded to the above questions and the SSE's review inquiries, only to withdraw its listing application not long ago.

What kind of company is Songgu Technology? And why is it getting attention?

Who is Longmu Technology, founded in 2013, headquartered in Shanghai, mainly engaged in intelligent driving systems, including L2-level auxiliary driving and L4 low-speed automatic parking system, and self-developed hardware such as 4D millimeter wave radar, ultrasonic radar and cameras, which is also the reason why its R & D investment has increased year after year.

Products have been recognized by a number of auto companies and auto industry suppliers, reached cooperation, may also be on the millet car.

▲ source: the official website of Longmu Science and Technology has accumulated nearly 3 billion yuan in financing before sprinting IPO, and its shareholders include Lenovo, Qualcomm and Xiaomi.

Among them, Xiaomi held 4.43% of the shares and bought shares in June 2021, only 60 days after Lei officer Xuan Xiaomi entered the bureau to build a car, and it was the first smart car industry chain company invested by Xiaomi.

The latest important development revealed on the company's website is the construction of a new intelligent driving system production plant in Dongyang in July last year, which is also one of the main purposes of its listing and financing, Zongmu Technology revealed in its prospectus.

Tang Rui, founder of Zhonghu Technology, is also the largest shareholder and actual controller of the company. He was born in 1976 with a master's degree in electronic engineering from Tsinghua University. He once served as the software director of microelectronics company and the global senior R & D director of CSR Semiconductor (now acquired by Qualcomm Qualcomm). He has accumulated 14 years of experience in R & D and management of automotive electronics semiconductors in Silicon Valley.

Tang Rui's career is closely related to hardware and semiconductors. For example, he led the development of the world's first integrated GPS application processor chip, which successfully promoted the rapid growth of China's handheld navigator market and vehicle navigation market from zero to 10 billion.

At present, the CSR vehicle navigation schemes on the market based on AtlasV, AtlasVI, Prima, PrimaII and other integrated GPS and Beidou baseband navigation main chips are all developed and successfully introduced to the market by Tang Rui.

It is still unknown why Tech withdrew its listing application. 18 months after the last financing disclosure, it was originally planned to go public to raise funds to build R & D centers and factories. With high R & D investment, how can we get the funds needed for the next step of development?

Or will it, like other smart car companies, aim at Hong Kong stocks and sprint for IPO?

Reference link:

Https://pdf.dfcfw.com/pdf/H2_AN202309271600015826_1.pdf?1695835952000.pdf

Http://static.sse.com.cn/stock/information/c/202211/07b4b9dcfef54ad38b8f34e017e25f3b.pdf

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