Core Viewpoint - Xi'an Yiswei Material Technology Co., Ltd. (referred to as Xi'an Yicai) is set to undergo its IPO review by the Shanghai Stock Exchange, aiming to raise 4.9 billion yuan for its silicon industry base project, despite being an unprofitable company at the time of application [2][3]. Group 1: Company Overview - Established in 2016, Xi'an Yicai specializes in the research, development, manufacturing, and sales of 12-inch electronic-grade silicon wafers, which are essential for various applications in electronics and new energy vehicles [3]. - The company’s primary products include P-type silicon wafers, which dominate over 90% of the global 12-inch silicon wafer market [3]. Group 2: Financial Performance - Xi'an Yicai reported revenues of 10.55 billion yuan, 14.74 billion yuan, and 21.21 billion yuan from 2022 to 2024, with net losses of 5.33 billion yuan, 6.83 billion yuan, and 7.38 billion yuan during the same period [5]. - The company has accumulated losses of 19.54 billion yuan over the last three years, with a projected timeline to achieve profitability by 2027 [5][8]. Group 3: Product Sales and Pricing - The sales revenue from polished wafers was 4.19 billion yuan, 6.47 billion yuan, and 8.31 billion yuan from 2022 to 2024, with average prices declining by 7.08% and 18.91% in 2023 and 2024, respectively [4]. - Testing wafers generated sales of 4.75 billion yuan, 7.27 billion yuan, and 9.27 billion yuan during the same period, with average prices decreasing by 11.41% and 16.37% in 2023 and 2024 [4]. Group 4: Challenges and Industry Context - The company faces challenges due to the cyclical nature of the semiconductor industry, high investment intensity, and long customer certification periods, which hinder its ability to achieve profitability [5][6]. - Xi'an Yicai's gross profit margins were significantly lower than industry peers, with margins of 9.85%, 0.66%, and 5.49% from 2022 to 2024, compared to industry averages of 30.53%, 24.47%, and 14.91% [8]. Group 5: Debt and Financial Management - Long-term borrowings increased from 17.01 billion yuan to 58.68 billion yuan from 2022 to 2024, raising concerns about financial sustainability [11][12]. - The company’s financial expenses rose significantly, accounting for 6.54% of operating income in 2024, driven by increased borrowing costs [12]. Group 6: Governance and Shareholder Rights - Xi'an Yicai has undergone scrutiny regarding special shareholder rights and agreements, with commitments made to terminate certain rights to comply with regulatory requirements [14][15]. - The company has taken steps to ensure that any previously existing obligations related to shareholder rights are no longer applicable, aiming to mitigate potential risks to its capital structure [16].

Core Viewpoint - Xi'an Yiswei Material Technology Co., Ltd. is the first loss-making company accepted for listing after the "Kebatiaos" policy, drawing significant attention to its listing journey [1] Company Overview - Established in 2016 and headquartered in Xi'an High-tech Zone, the company was formerly known as Beijing Yiswei Technology Co., Ltd. and relocated to Xi'an in 2020 [3] - The core products include 12-inch silicon single crystal polishing wafers and epitaxial wafers, used in manufacturing storage chips, logic chips, image sensors, and power devices, with end markets covering smartphones, data centers, and smart vehicles [3] Industry Context - The semiconductor materials industry is characterized by a duopoly and the rise of new players, with high technical barriers and capacity expansion competition [3] - Five companies, including Shin-Etsu Chemical (Japan) and SUMCO (Japan), dominate 92% of the global 12-inch silicon wafer market, with Shin-Etsu and SUMCO accounting for over 50% [3] Financial Performance - The company's gross margins are significantly lower than its peers, with gross margins of 9.85%, 0.66%, and 5.49% from 2022 to 2024, compared to an average of 30.53%, 24.47%, and 14.91% for comparable companies [4][5] - The company is still in the capacity ramp-up phase, facing high depreciation and expense amortization [5] Future Projections - Xi'an Yiswei expects to achieve profitability after 2027, contingent on increasing the sales proportion of epitaxial wafers to 20%-30% and optimizing capacity utilization [6] - The company anticipates reaching a monthly shipment of 110,000 wafers by 2026 to break even, and 120,000 wafers to become profitable by 2027, based on optimistic assumptions of price stabilization and recovery [6] Customer and Supplier Concentration - The company has a high customer concentration, with the top five customers accounting for over 60% of total sales, which may weaken its negotiating position [8] - Supplier concentration is also high, with the top five suppliers accounting for 58.07%, 56.29%, and 60.67% of total purchases from 2022 to 2024 [8][10] R&D and Technical Workforce - As of 2024, the company has applied for 1,635 patents, with over 80% being invention patents, but shows slow progress in core technology iterations [12] - Approximately 12% of the workforce is dedicated to R&D, with over 50% of R&D personnel being part-time, raising concerns about the stability and continuity of R&D efforts [12][14]