Core Viewpoint - Hengkun New Materials Technology Co., Ltd. has successfully passed the IPO review, marking a significant step towards its listing on the STAR Market, with its financial status, business model, and compliance recognized by regulators [1][3]. Company Overview - Established in 2004, Hengkun New Materials focuses on the R&D, production, and sales of key materials for integrated circuits, including photoresist materials and precursor materials [3]. - The company is one of the few domestic firms capable of R&D and mass production of key materials for 12-inch wafer manufacturing, with products used in advanced NAND, DRAM storage chips, and logic chip manufacturing processes at technology nodes of 90nm and below [3]. Financial Performance - Hengkun New Materials has shown steady revenue growth, with reported revenues of 322 million yuan, 368 million yuan, and 548 million yuan for the years 2022 to 2024, respectively [3]. - The net profit attributable to the parent company was 101 million yuan, 90 million yuan, and 97 million yuan for the same period [3]. - The sales revenue from self-produced products has experienced rapid growth, with figures of 124 million yuan, 191 million yuan, and 344 million yuan, reflecting a compound growth rate of 66.89% [3]. - The proportion of self-produced product sales in total revenue increased from 38.94% to 63.77%, indicating enhanced competitiveness and optimized business structure [3]. - For the first nine months of 2025, the company expects to achieve revenue between 440 million yuan and 500 million yuan, representing a year-on-year growth of 12.48% to 27.82% [3]. Industry Outlook - The demand for key materials in advanced process chips has significantly increased due to breakthroughs in integrated circuit manufacturing processes and packaging technologies in China [4]. - The domestic integrated circuit materials market is projected to grow rapidly, with forecasts indicating a market size of 258.96 billion yuan by 2028 [4]. - Hengkun New Materials plans to raise 1.007 billion yuan through its IPO, primarily for two projects: the second phase of the integrated circuit precursor project and the advanced materials project for integrated circuits [4]. - The implementation of these fundraising projects is expected to expand the product line, enhance R&D capabilities, and better meet the urgent demand for domestic materials from downstream customers [4]. - As these projects are completed and put into production, Hengkun New Materials is anticipated to open up growth opportunities in multiple new product areas and further enhance its market position [4].

Core Viewpoint - Hengkun New Materials faces challenges in its IPO process, primarily due to concerns over technology intellectual property disputes and the appropriateness of its revenue recognition methods [3][4]. Group 1: IPO Challenges - Hengkun New Materials was the first company to face a "suspension of review" in 2025 during the Shanghai Stock Exchange's listing committee meeting, raising questions about its compliance and technical capabilities [3]. - The listing committee questioned the company's technological independence and required further clarification on potential ownership disputes regarding core technologies [3]. - Concerns were also raised about the revenue recognition method used for its introduced business, prompting the company to justify its compliance with accounting standards [3]. Group 2: Response to Regulatory Concerns - In response to the regulatory scrutiny, Hengkun New Materials provided detailed evidence and logical explanations to address the concerns, ultimately gaining approval [4]. - The company emphasized that all core technologies are derived from independent research and development, having obtained 78 patent authorizations, including 45 invention patents [4]. - To alleviate concerns about ownership disputes, Hengkun New Materials clarified that there are no unresolved technical disputes with upstream and downstream partners and has established a comprehensive intellectual property protection system [4]. Group 3: Company Background and Development - Established in 2004 and headquartered in Xiamen, Hengkun New Materials is one of the few companies in China capable of developing and mass-producing key materials for 12-inch integrated circuit wafer manufacturing [6]. - The company transitioned from its initial focus on optical film devices to the semiconductor materials sector in 2014, seizing opportunities for domestic production [6]. - By the end of 2024, Hengkun New Materials had obtained 89 patent authorizations and was recognized as a key materials engineering research center in Fujian Province [6].

Core Viewpoint - Xiamen Hengkang New Materials Technology Co., Ltd. (referred to as "Hengkang New Materials") is set to reapply for its IPO on the Sci-Tech Innovation Board, aiming to raise approximately 1 billion yuan. The company heavily relies on a few major clients for its revenue, with over 97% of its income coming from the top five clients, raising concerns about customer concentration risk [1][10][11]. Group 1: Financial Performance - Hengkang New Materials reported revenues of 322 million yuan, 368 million yuan, and 548 million yuan for the years 2022 to 2024, with net profits of 101 million yuan, 90 million yuan, and 97 million yuan respectively. For the first nine months of 2025, the company expects revenues between 440 million yuan and 500 million yuan, representing a year-on-year growth of 12.48% to 27.82% [9]. - The company has received government subsidies amounting to 19.12 million yuan, 16.76 million yuan, and 16.24 million yuan during the reporting periods, accounting for approximately 15% of total profits [9]. Group 2: Customer Dependency - The revenue from the top five clients accounted for 99.22%, 97.92%, and 97.20% of the main business income during the reporting periods, indicating a high customer concentration. Sales to the largest client represented 72.35%, 66.47%, and 64.07% of total revenue, highlighting significant reliance on a few customers [11][12]. Group 3: Production Capacity and Utilization - The company's production capacity utilization remains low, with only one product's utilization rate reaching 84% in the first half of the year, while the rest are below 50%. For instance, the utilization rates for BARC, KrF photoresist, and i-Line photoresist are projected to remain below 50% in 2025 [15][18]. - Hengkang New Materials has several production lines that are yet to be operational, including three 1000L lines and two 5000L lines, with one 2000L SOC line in standby [16]. Group 4: IPO Fundraising and Investment Plans - The company plans to raise 1 billion yuan through its IPO, with approximately 400 million yuan allocated for the second phase of the integrated circuit precursor project and about 607 million yuan for advanced materials for integrated circuits [13][14]. - The total investment for the precursor project is estimated at 519 million yuan, while the advanced materials project is projected to cost around 909 million yuan [14]. Group 5: Market Position and Product Development - Hengkang New Materials focuses on the research and industrial application of key materials for integrated circuits, being one of the few domestic companies capable of developing and mass-producing critical materials for 12-inch integrated circuit wafer manufacturing [8]. - The company has achieved mass production of its self-developed products, including SOC, BARC, KrF photoresist, and i-Line photoresist, while the ArF immersion photoresist has passed validation and is in small-scale sales [8]. Group 6: Risks and Challenges - The company faces potential risks regarding the sustainability of its cooperation with one of its target clients, as sales to this client have been declining over the reporting periods [21]. Additionally, the existing TEOS production capacity is underutilized, raising concerns about the feasibility of expanding production capacity [20][21].

Core Viewpoint - Xiamen Hengkang New Materials Technology Co., Ltd. is set to undergo IPO review on the Sci-Tech Innovation Board, marking a significant milestone in its long-term commitment and innovation in the key materials for integrated circuits [1] Group 1: Company Development - Since its establishment in 2004, the company has transformed from optical film devices to key materials for integrated circuits, with a strategic shift confirmed in 2014 [3] - The company achieved sales breakthroughs in self-produced materials by 2020, and by 2022, its product sales revenue exceeded 100 million yuan, demonstrating solid technical accumulation and strong industrialization capabilities [3] - According to Frost & Sullivan market research, the company has become a leading player in the domestic photolithography materials market for 12-inch integrated circuits, ranking first among domestic manufacturers in SOC and BARC sales in 2023 [3] Group 2: Technical Strength - The company has undertaken multiple national special research tasks since 2020, addressing critical industry challenges [3] - Its subsidiary, Fujian Hongguang, has been recognized as a key materials engineering research center for photolithography in Fujian Province and was identified as a national-level specialized and innovative "little giant" enterprise in 2022 [3] - As of July this year, the company holds 89 patents, including 36 invention patents, establishing a solid technical barrier [3] Group 3: Future Outlook - The company aims to continue its commitment to the localization of key materials for integrated circuits, increasing R&D investment and expanding product varieties and application fields [4] - The upcoming IPO is expected to provide new development opportunities, helping the company secure a position in the global semiconductor materials landscape and contribute to the self-controllability of China's integrated circuit industry chain [4]

Core Viewpoint - Xiamen Hengkang New Materials Technology Co., Ltd. is preparing for its IPO on the Sci-Tech Innovation Board, focusing on the production of semiconductor materials, particularly photolithography materials, and aims to break foreign monopolies in this sector [2][8]. Financial Performance - The company's revenue projections for 2022, 2023, and 2024 are 322 million yuan, 368 million yuan, and 548 million yuan, respectively, with profits of approximately 99.73 million yuan, 89.76 million yuan, and 96.91 million yuan [2]. - Interest income has become a significant source of profit, contributing 2.07 million yuan, 16.93 million yuan, and 21.29 million yuan over the same period [2]. Product Overview - Hengkang New Materials' products are categorized into introduced products and self-produced products, with self-produced products expected to generate 344 million yuan in revenue by 2024, accounting for 63.77% of total revenue [3]. - The gross margin for self-produced products is declining, projected at 33.52%, 30.29%, and 28.97% from 2022 to 2024 due to product structure changes and price negotiations with clients [3]. Customer Dependency - The company has a high dependency on its top five customers, with their revenue contribution to main business income being 99.22%, 97.92%, and 97.2% from 2022 to 2024 [4]. - The first two major customers account for a significant portion of sales, with combined revenue contributions of 84.43%, 85.44%, and 87.19% during the same period [4]. IPO Details - Initially planning to raise 1.2 billion yuan, the company reduced its fundraising target to 1 billion yuan after inquiries, stating that the cut projects could be funded through self-raised capital [4]. Shareholding Structure - The actual controller of Hengkang New Materials, Yi Rongkun, holds a direct stake of 19.52% and controls a total of 35.65% of voting rights through various entities [4]. - There have been significant shareholding arrangements, including shareholding by Yi Rongkun and others, raising concerns about potential insider trading [5][6]. Industry Context - Hengkang New Materials is positioned as a key player in the semiconductor materials sector, contributing to the localization of critical materials for integrated circuits, which is vital for national strategic security [8].