IPO Observation: After Over 7 Months, Silicon Technology Still Fails to Submit Registration: Are Large Shareholders "Low-Price" Investors? Gross Margin Far Below Comparable Companies

As of today, over seven months have passed since Silicon Technology (Shenzhen) Co., Ltd. ("Silicon Tech") failed to move forward with the IPO process by submitting its registration application. According to the China Securities Regulatory Commission's issuance and listing procedures, after the "pre-review" stage is completed, the company will submit a registration application to the relevant authorities, which will then review the application within 20 working days.

After over seven months of delay, Silicon Tech still has not entered the next stage of the IPO process. This has raised concerns about the company's ability to complete the IPO and the potential impact on its stock price.

Large Shareholders' Sudden Investment

Despite successfully completing the pre-review stage, Silicon Tech still has several issues that need to be addressed. One of these is the sudden investment by large shareholders, including the chairman of one of Silicon Tech's major customers and the daughter of another shareholder.

The investment was made through a capital increase, with the two investors purchasing 75 million shares and 54.55 million shares, respectively. The purchase price was RMB 36.67 per share. While this has raised concerns about potential conflicts of interest, Silicon Tech claims that the investment was made to recognize the company's technology and industry position.

However, there are several issues that need to be addressed. Firstly, the sudden investment by large shareholders has increased the company's accounts receivable from RMB 2.39 billion in 2020 to RMB 6.95 billion in 2022, which is a significant increase. This has raised concerns about the company's ability to collect its debts and the potential impact on its cash flow.

Low Gross Margin

Another issue that needs to be addressed is Silicon Tech's low gross margin. According to the company's prospectus, its gross margin in 2020-2022 was RMB 39.59%, RMB 42.62%, and RMB 44.66%, respectively. This is significantly lower than comparable companies, which had gross margins of over 70% during the same period.

When Will Silicon Tech Submit Registration Application?

The article concludes by noting that Silicon Tech has failed to submit its registration application for over seven months and raises concerns about when it will be able to complete the IPO process. The company's ability to register successfully is also in question.