Core Viewpoint - Xiamen Youxun Chip Co., Ltd. is preparing for an IPO on the Sci-Tech Innovation Board, facing challenges related to control stability and historical equity issues [3][11]. Group 1: Company Background and Control Issues - The founder of Youxun, Ke Binglan, has a diverse background, including roles as a communication soldier, university lecturer, lawyer, and state-owned enterprise executive before founding the company in 2003 [2][5]. - The company has experienced a long period without a clear controlling shareholder until late 2022 when Ke Binglan and his son, Ke Tenglong, became the actual controllers, although their combined voting rights remain low [3][8]. - The company's voting rights are fragmented, with no single shareholder holding more than 30%, leading to potential risks in control stability post-IPO [9][11]. Group 2: Historical Equity and Governance Issues - Youxun has faced historical equity issues, including unregistered equity transfers and shareholding arrangements that could attract scrutiny from regulators [4][14]. - The initial shareholding structure was complicated, with the largest shareholder, Ping Xu, holding 60% of the shares at the company's inception, which created governance challenges [12][13]. - The transfer of shares has been slow, with significant delays in registering changes, leading to a lack of clarity in ownership [16][18]. Group 3: Financial Performance and Market Strategy - Youxun's revenue fluctuated from 339 million yuan in 2022 to 411 million yuan in 2024, with net profits of 81.4 million yuan, 72.1 million yuan, and 77.9 million yuan during the same period [30]. - The company adopted a "price-for-volume" strategy to reverse declining sales, resulting in a drop in product prices while increasing sales volume [35][36]. - The average procurement price of wafers increased by 40.19% from 6,815.7 yuan per piece to 9,555.07 yuan per piece, impacting profit margins [36]. Group 4: Supply Chain and Inventory Management - Youxun operates under a Fabless model, relying heavily on external suppliers, with over 86% of procurement coming from the top five suppliers [38]. - The company has a high inventory level, with a book value of 175 million yuan at the end of 2024, and a low inventory write-down ratio compared to peers [42][43]. - The company maintains a strong cash position, with a liquidity ratio of 6.23 and a debt ratio of 11.3%, indicating good financial health [46]. Group 5: Dividend Policy - Youxun has implemented cash dividends totaling 58 million yuan over the past two years, reflecting its strong cash flow and commitment to returning value to shareholders [47].

Core Viewpoint - Huike Co., Ltd. plans to raise 8.5 billion CNY through its IPO, with a valuation range between 56 billion CNY and 85 billion CNY. The valuation may be considered high when compared to the panel industry average PB ratio of approximately 1.2, which suggests a valuation around 40 billion CNY, indicating a potential overvaluation of 16 billion to 45 billion CNY [1][3][6]. Fundraising and Project Allocation - The company has reduced its fundraising target from 9.5 billion CNY to 8.5 billion CNY for its IPO on the Shenzhen Stock Exchange. The funds will be allocated as follows: 2.5 billion CNY for OLED R&D upgrades, 3 billion CNY for Oxide R&D and industrialization, 2 billion CNY for Mini-LED smart manufacturing, and 1 billion CNY for working capital and bank loan repayment [1][2]. Valuation Analysis - The company's valuation has significantly increased from approximately 30 billion CNY during its first IPO attempt to an estimated 66 billion CNY by the end of 2024. The current IPO fundraising suggests a valuation between 56.7 billion CNY and 85 billion CNY, which is substantially higher than the previous estimates [3][4][6]. Industry Context - The panel industry is characterized by cyclical nature and heavy asset investment, leading to the common use of PB valuation methods. The current PB ratio for major competitors like BOE and TCL Technology is around 1.28, which indicates that Huike's valuation may be inflated compared to its peers [5][6][8]. Financial Health and Risks - Huike's net assets are reported at 30 billion CNY, with over 10 billion CNY in minority interests, raising questions about the quality of its net assets and potential "hidden debt" issues. The company's inventory turnover has been declining over the past five years, while its inventory impairment provision is significantly lower than industry standards, suggesting possible discrepancies in financial reporting [11][16][19]. Revenue and Profitability Trends - The company has experienced fluctuating revenues, with reported figures of 271.34 billion CNY, 357.97 billion CNY, and 403.10 billion CNY over the past three years. Net profits have also varied, with a notable loss in 2019 and a recovery to 36.73 billion CNY in 2024, reflecting a 29.96% year-on-year increase [20][21][23]. Customer Dependency and Market Dynamics - Huike's sales to major customer Samsung have sharply declined, with revenue dropping from 4.2 billion CNY in 2023 to 2.6 billion CNY in 2024. This decline raises concerns about customer stability and the company's reliance on a few key clients [28][29].