Major Event Warning
The Company hereby reminds investors that before making any investment decision, they must carefully read the main text of this Prospectus and pay special attention to the following important matters.
I. Special Risk Warning
(I) Risk of Fluctuations and Decline in Operating Performance
During the reporting period, the Company's operating revenue was RMB 1.30 billion, RMB 1.34 billion, RMB 1.284 billion, and RMB 0.327 billion, respectively. Net profit attributable to the parent company was RMB 0.186 billion, RMB 0.134 billion, RMB 0.060 billion, and RMB 0.20 billion, respectively. Net profit attributable to the parent company is expected to decline in 2024 and 2025, mainly due to intensified market competition, declining product prices, increased inventory write-downs, and continuous R&D investment. The semiconductor industry is characterized by significant cyclicality. If the industry downturn continues, downstream demand falls short of expectations, or the competitive landscape deteriorates, the Company's operating revenue and net profit may further decline.
(II) Risk of Fluctuations and Decline in Gross Profit Margin
The Company's main products are microcontrollers and analog products. During the reporting period, the Company's overall gross profit margin was 35.62%, 33.60%, 31.51%, and 31.73%, showing a downward trend. The decline in the Company's gross profit margin during the reporting period was mainly due to intensified market competition and fluctuations in downstream market demand. If industry competition further intensifies or product prices continue to decline, and costs do not decrease proportionally, the Company's gross profit margin may continue to decline, adversely affecting its profitability.
(III) Risk of R&D Progress of Raised Fund Investment Projects Not Meeting Expectations
The projects to be funded by the raised capital include the R&D and industrialization of high-end industrial-grade (including automotive-grade) analog and mixed-signal chips, and the R&D and industrialization of high-end industrial-grade (including automotive-grade) main control SoC (including intelligent) chips. These projects are formulated based on the Company's business development plan and its existing business. Project 1 includes three major product categories: tool-grade, light electric vehicle and household energy storage, and industrial and commercial energy storage and automotive-grade products. Among them, tool-grade and light electric vehicle and household energy storage products have achieved large-scale sales of similar lithium battery management chips during the reporting period. However, industrial and commercial energy storage and automotive-grade products are still in the R&D phase, and no products in similar sub-sectors have achieved sales. Project 2 includes three major product categories: motor control SoC, high-end industrial control main control SoC, and automotive-grade main control SoC. Among them, motor control MCU and high-end industrial control main control MCU have achieved large-scale sales during the reporting period. Existing similar products of automotive-grade MCU are in small-batch production, and downstream vehicle manufacturers are currently conducting product verification.
[Image: Sino Wealth logo]
The specific part numbers to be developed for the raised fund investment projects are still in the project initiation or product R&D phase and have not yet been sent to customers for sample verification. Furthermore, the technical requirements, design complexity, and functional safety requirements for automotive-grade products are higher than those for the Company's traditional industrial-grade products, which may lead to risks of delayed project implementation if product R&D falls short of expectations.
(IV) Risk of Market Development for New Customers and New Products from Raised Fund Investment Projects Not Meeting Expectations