The fabless chipmaker is planning to raise CNY 1.52 billion (USD 221 million) through an initial public offering in Shanghai's Nasdaq-style marketplace.
Amlogic (晶晨半导体), an SoC (system-on-a-chip) fabless semiconductor company, together with Friendess Technology formed the second batch of stocks to be openly traded on the Star Market, which started its business last Monday.
The Shanghai-based firm filed a prospectus this March (by the way, it turned to be the first applicant on the new marketplace) and, according to the Shanghai Stock Exchange, finally got approved by the bourse on July 16. Two weeks later, share allocations were distributed between primary investors during the IPO lottery. The stock (晶晨股份, 688099:SH) is expected to start trading within two weeks since July 31 -- the day of official IPO results publication.
Founded in 2003, the chipmaker markets over dozen various types of chipsets that are mostly applied to consumer electronics such as smart STB (set-top box), smart home devices, 'TV dongle', smart TVs, projectors and speakers. Designing the core elements of the 'household IoT', the company built its business around research and development.
Over 80% (619/763) of the full-time personnel are directly involved in the R&D activity -- Amlogic is among the sci-tech board's leaders in this respect. And it is not about labor only: last year, the firm spent CNY 376 million (USD 54.6 million), or more than 15% of the annual operating revenue, to ignite innovation.
Lofty expectations (the company's P/E ratio is higher than the Star board's average) originated from a decent financial performance. Microchips sales contracts generated CNY 1.15 billion (USD 167 million), CNY 1.69 billion (USD 246 million) and CNY 2.37 billion (USD 344 million) in 2016, 2017 and 2018 respectively. The net profit margin was lately hovering between 4% and 7%, then climbed to 11.9% last year.
Like the other four chipmakers on the Star Market, Amlogic has bright macro prospects, being reinforced by a handful of objective and subjective factors. EqualOcean expects its stock to become a full-fledged bellwether of the semiconductor industry once the new Nasdaq-style board overcomes the first wave of market craze and gets stabilized.