ASR Microelectronics, a communication chip manufacturer, on Friday was officially listed to the Shanghai Sci-Tech Innovation Board (STAR Market), but saw its share price fall on its first day of trading. As of 2 p.m., the company’s stock had decreased by more than 34% to 108.55 yuan ($17.074) per share.
Established in 2015, the firm is a platform-based chip enterprise providing wireless-solution and ultra-large-scale chips. It is one of the few platform-based chip design enterprises in China that can conduct R&D of full-standard cellular baseband chips and multi-protocol non-cellular Internet of Things (IoT) chips, and that has the ability to provide ultra-large-scale high-speed SoC chip customization and semiconductor IP authorization services.
The company’s business covers cellular baseband chips, non-cellular IoT chips, AI chips and other products. At present, more than 25 types of chips for enterprise use have been mass-produced by the firm.
The firm focuses on cellular module communication chips, with its sales exceeding 80 million sets, accounting for more than 70% of its total revenue from chips. The sales volume of non-cellular IoT chips has exceeded 40 million.
The cellular chips of the company are mainly used for 4G communication modules and have entered the supply chain system of large national power grid enterprises such as ZTE Corporation, 360, TP-Link and other enterprises. Among them, ASR3601 is designed for functional mobile phones. According to the prospectus, the firm has not yet acquired revenue from smartphone baseband chips.
In terms of the company’s investment background, its prospectus shows that Alibaba Group Holding Limited (China) Network Technology Co., Ltd. (hereinafter referred to as Alibaba), the single largest shareholder of the company, holds 17.15% of the company’s shares, which is higher than that held by Dai Baojia, the actual controller, which directly holds 9.36% of the company’s shares. However, Alibaba is not the controlling shareholder of the company, nor has it been recognized as the actual controller.
In addition, Hubei Xiaomi Changjiang Industrial Investment Fund Management Co., Ltd. Partnership is also a shareholder of the company, claiming a minor share ratio of 1.09%. One of the investors behind this is the Beijing-based electronics giant Xiaomi Technology.
According to the prospectus, the firm is still making losses due to the need for large R&D investment that would ensure technology accumulation and product development. Over the past three years, the R&D investment of the firm accounted for 202.74% of its revenue, with an accumulative investment of 3.232 billion yuan ($508.4 million).
The company achieved revenue of 1.081 billion yuan ($170 million) in 2020, a year-on-year increase of 171.64%, as well as a net loss of 2.327 billion yuan ($366 million), including 1.767 billion yuan ($277 million) in employee equity incentives. Net losses totaled 572 million yuan ($89.975 million) during the year after deduction of this non-recurring gain. From January to June in 2021, the firm estimated that its operating income was between 817 million yuan ($128.514 million) and 903 million yuan ($142.041 million) – up 81.18% to 100.25% year-on-year.