Core Viewpoint - Qipai Technology has faced continuous losses and negative gross margins over the past two years, primarily due to industry downturns, pricing pressures, and increased fixed asset investments, but is showing signs of improvement in 2024 as the industry recovers [1][2]. Financial Performance - Gross margins from 2022 to the first half of 2025 were 0.99%, -17.43%, -5.94%, and -5.60%, with net profits of -58.56 million, -130.97 million, -102.11 million, and -58.67 million respectively [2]. - The main reasons for losses include product pricing being lower than costs, with significant price declines in key products like SOT, SOP, and QFN/DFN, which dropped by 12.17%, 15.08%, and 11.66% in 2023 [2]. - Fixed costs remain high, with manufacturing expenses consistently accounting for 48%-52% of main business costs, and depreciation reaching 121 million in 2023, a 14.3% increase year-on-year [2][3]. Capacity Utilization and Cost Pressure - Capacity utilization rates were 72.67% in 2022 and 68.13% in 2023, expected to improve to 80.57% in 2024 and 86.30% in the first half of 2025 [3]. - The company has invested 865 million in construction projects from 2022 to 2024, increasing fixed assets from 1.579 billion to 2.173 billion, leading to an average annual depreciation increase of over 15% [3]. Industry Comparison - Qipai Technology's performance trends align with the semiconductor packaging and testing industry, which has faced similar gross margin pressures [4]. - The company’s QFN/DFN products are the only ones with positive gross margins, contributing 32.06% of revenue in 2024 with a gross margin of 8.98% [4]. - Compared to industry peers, Qipai's gross margin of -5.45% in 2024 is significantly lower than the industry average of 13.43%, primarily due to its lower advanced packaging ratio [4]. Debt and Liquidity - As of June 2025, the company reported a current ratio of 0.41, a quick ratio of 0.29, and a debt-to-asset ratio of 66.87%, all below industry averages [5]. - The company has a total of 550 million in interest-bearing liabilities, with short-term borrowings of 121 million and long-term borrowings of 290 million [5]. - Qipai has a bank credit line of 924 million, with 314 million remaining available, and reported positive operating cash flow of 14.11 million in the first half of 2025 [5]. Future Outlook - The global packaging and testing market is expected to grow at a compound annual growth rate of 5.9% from 2024 to 2029, with advanced packaging being a key driver [6][7]. - Qipai anticipates improved gross margins and operational performance in 2025 due to increased capacity utilization and product structure optimization [6][7].

Core Viewpoint - The company, Qipai Technology (688216.SH), is facing regulatory inquiries during its refinancing review on the Sci-Tech Innovation Board due to ongoing losses and negative gross margins [1] Financial Performance - The company has reported losses for the last three years and the first half of 2025, with a net profit loss of 131 million yuan in 2023, narrowing to 102 million yuan in 2024, and a loss of 58.67 million yuan in the first half of 2025 [1] - The gross margin has been negative, with a comprehensive gross margin of -12.97% in 2023, improving slightly to -1.84% in 2024, and remaining at -2.17% in the first half of 2025 [1] Factors Affecting Profitability - The company's profitability is under pressure due to three main factors: 1. Significant price declines of key products (such as SOT and SOP) during the industry downturn in 2023 [1] 2. High fixed asset depreciation from IPO fundraising projects, coupled with a capacity utilization rate below 70% from 2022 to 2023, leading to elevated unit costs [1] 3. Increased financial expenses due to expanded financing, with total expenses of 114 million yuan in 2023 and 124 million yuan in 2024 [1] Industry Comparison - Although the company’s capacity utilization trends are similar to its peers, it faces greater fixed cost pressures due to being in an expansion phase, resulting in a main business gross margin of -5.94% in 2024, significantly lower than the industry average of 13.43% [1] Debt Situation - As of June 2025, the company's asset-liability ratio remains high at 66.87% [1]