Yytek's Star Market Shares Rise 500% in Morning Trading on IPO Day
Recently, the Shanghai Stock Exchange Sci-Tech Innovation Board-listed stocks have been performing exceptionally well.
Yytek (云涌科技, 688060:SH), which develops embedded systems for various Industrial Internet of Things (IIoT) applications, started public trading on the Shanghai exchange's Star Market on July 10. At the midday break, its stock was up by 508.28%, hitting CNY 270.50 per share.
According to the company's prospectus, from 2017 to 2019, the revenues were CNY 137.93 million, CNY 161.96 million and CNY 250.88 million, keeping an upward trend. The net profit margin has been increasing, too. It reached 21.88%, 23.41% and 26.09% in these three years respectively.
Semiconductor chips, batteries and other electronic components account for over 70% of the company's total cost, where the share of the former has been hovering between 21% and 25%. If the geopolitical shifts continue, the company will not be able to buy chips from current suppliers, such as Intel and NXP, which can be detrimental to the company's operations.
The State Grid Corporation of China (SGCC) and the Southern Power Grid are Yytek's two main customers. These and three other firms' clients accounted for 74.89%, 81.92% and 58.57% of its operating income in 2017, 2018 and 2019 respectively.
The popularity of the Star Market is high among both individual and institutional investors in the Chinese financial sector. As more technology companies are going public there these days, a bullish mood is in the air.