Recently, the application for listing on the scientific innovation board of Beijing core vision software technology Co., Ltd. (hereinafter referred to as “core vision”) was accepted. The main business of the company is to carry out integrated circuit analysis and design services relying on the independently developed electronic design automation (EDA) software.
EDA is the top priority in the whole chip industry chain. The company is the first company with EDA software in the scientific innovation board. On May 15, the U.S. Department of Commerce said that it would comprehensively restrict Huawei’s purchase of semiconductors produced with U.S. software and technology, and EDA was called by Dongxing securities as the “sword of the United States to restrict Huawei”. So once EDA is controlled by others, the whole chip industry will be passive, and the importance of domestic EDA will become more and more important.
The first EDA supplier concentration of sci tech Innovation Board
Core vision was established in 2002. At present, the company has built three business segments: integrated circuit analysis, integrated circuit design and EDA software authorization. Its services / products are mainly for IC design enterprises, integrated device manufacturers, electronic product system manufacturers, scientific research institutes, judicial authentication institutions, law firms and other customers.
The prospectus shows that the operating income and net profit of the company have maintained a high growth. From 2017 to 2019, the operating income of the company was 73.7052 million yuan, 114 million yuan and 160 million yuan respectively, with a compound growth rate of 41.51%; The net profit attributable to the parent company was 26.9465 million yuan, 41.6853 million yuan and 75.5764 million yuan respectively, with a compound growth rate of 67.47%.
The company is the first company with EDA on the sci-tech innovation board. EDA software can help engineers realize the compilation, simplification, segmentation, layout and optimization of logic, complete the circuit and performance analysis, layout design and other complex IC analysis and design processes, and greatly improve the analysis efficiency and design flexibility. EDA industry is the most upstream and important industry of IC design. Since its establishment, the company has positioned EDA software requirements in the field of IC analysis services and design services, and has gradually formed six software product lines and 38 software products.
However, the domestic EDA industry market is small, and the monopoly of foreign companies makes China’s chip industry relatively passive. For a long time, the global market of EDA software has been dominated by cadence, Synopsys and mentor graphics. In the Chinese market, the three giants have taken over 95% of the market share. At present, the local EDA enterprises include Huada Jiutian, core vision, Xinhe technology, Guangli microelectronics, bodavi technology, Kelun electronics, blue ocean micro technology, Orcas micro electronics and other enterprises.
At present, the EDA business revenue of core vision is small. During the reporting period, the company’s EDA business realized an operating revenue of 4.1788 million yuan, 3.5143 million yuan and 4.4207 million yuan respectively, accounting for 5.98%, 3.23% and 2.85% of the revenue respectively.
In addition, the company’s operating revenue mainly comes from IC analysis services. During the reporting period, the company’s IC analysis services operating revenue was 55.1987 million yuan, 83.0824 million yuan and 129 million yuan respectively, accounting for 78.99%, 76.27% and 83.13% of the revenue respectively; IC design services achieved operating revenue of 10.5047 million yuan, 22.3341 million yuan and 21.771 million yuan, accounting for 15.03%, 20.5% and 14.02% of the revenue respectively.
It is worth mentioning that the cost of mass production outsourcing business in IC design services is mainly IC OEM costs. During the reporting period, IC OEM fees accounted for 30.14%, 35.34% and 8.77% of the operating costs respectively. The concentration of upstream suppliers is one of the characteristics of the semiconductor design industry. During the reporting period, the proportion of the company’s IC OEM procurement to the total procurement was 38.60%, 43.21% and 19.26% respectively. The OEM manufacturers were concentrated in China Resources Shanghua, Hejian technology, Shengfan semiconductor, Tianshui Huatian, etc. This also led to the concentration of suppliers. During the reporting period, the total purchase amount of the company’s top five suppliers accounted for 53.48%, 58.27% and 52.48% of the total purchase amount of the current period respectively.
Overseas income fluctuates greatly, and R & D investment is lower than that of comparable companies
Overseas income is affected by many factors, such as changes in local policies and regulations, changes in political and economic situation, etc. Some countries restrict the import and export of China’s related industries through trade protection, resulting in large fluctuations in the company’s overseas income. During the reporting period, the company’s income from overseas was 7.6037 million yuan, 25.7488 million yuan and 12.7676 million yuan respectively, accounting for 10.88%, 23.64% and 8.22% of the main business income in the same period, mainly concentrated in North America, East Asia and other IC industry developed regions. In addition, during the reporting period, the main experimental equipment of the company was mainly international well-known brands (such as Oxford, Carl Zeiss, Leica, etc.). If the international trade frictions related to China continue to occur in the future, it may cause some obstacles to the company’s purchase of high-end equipment.
In recent years, the downstream demand of the whole industry has become more and more vigorous, and the IC manufacturing index has been evolving towards 14nm, 7Nm and 5nm, which also puts forward high requirements for the company’s IC analysis services and IC design services. At present, the most advanced manufacturing process of the IC products analyzed has reached 7 nm, the maximum scale of a single project has reached 3.5 billion transistors, and the maximum number of metal layers has reached 16.
During the reporting period, the R & D expenses of the company were 6.2432 million yuan, 11.6404 million yuan and 13.2896 million yuan, accounting for 8.47%, 10.25% and 8.29% of the operating revenue respectively. Zhiyuan technology, creative electronics and Shixin electronics were selected as comparable companies in the same industry. The average R & D expense rates were 18.58%, 23.39% and 24.14% respectively, much higher than the core vision in the same period. The large gap is mainly due to the limited scale of the company’s capital investment, cautious control over the risk of R & D investment, and strict standards for R & D project initiation and cost budget. From the perspective of the investment projects funded by the raised funds, the company will increase its R & D efforts, and will invest in the R & D project of the new generation of integrated circuit intelligent analysis platform, the development and industrialization project of IP core and design platform for IOT chips, the R & D project of design service platform for high-end digital chips, the upgrading and strengthening project of R & D center, and supplement working capital.
Editor in charge: Tzh