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Interface News reporter | Feng Yuchen

Newly listed company Shengjing Micro (603375.SH) The market competition is fierce. From August 12 to August 13, Shengjing Micro's turnover rate was as high as 48.94% and 40.54%, the highest level since March. During these two days, Shengjing Micro's stock price changed by -0.89% and 4.29%, respectively. On August 14, Shengjing Micro's turnover rate was 34.33%, down 2.97%.

In terms of performance, Shengjing Micro's upcoming 2024 semi-annual report is not optimistic. The company expects its net profit for the current period to drop by nearly 90% compared with the same period last year, and its continuous steady growth before listing has come to an abrupt end. Industry insiders said that in the first half of this year, the demand of electronic detonator companies, Shengjing Micro's downstream customers, was weak.

Shengjing Micro expected in its performance forecast thatAs the civil explosives industry enters its peak sales season in the second half of the year, a series of measures will be taken to create a new growth curve.

Post-IPO performance was “cold”

A market insider said that an excessively high turnover rate indicates that the stock does not have long-term locked-in chips, and the stock price generally fluctuates greatly. This is more common in science and technology innovation board stocks, secondary new stocks and small-cap stocks. A continuous turnover rate of up to 40% indicates active trading and strong speculation, and special attention should be paid to investment risks.

In fact, Shengjing Micro's stock price was below the issue price throughout July. It was not until August that its stock price gradually returned to the issue price.

At the same time, Shengjingwei’s performance since its listing is not optimistic.

Shengjingwei will be listed on the main board of the Shanghai Stock Exchange in January 2024, and its main business is electronic control modules, detonator controllers, amplifiers, etc.PreviouslyShengjing MicroIt had planned to be listed on the Science and Technology Innovation Board, but switched to the main board after two rounds of inquiries.Looking at Shengjing Micro's financial data in the five years before its listing, its revenue and profits showed strong growth momentum.

From 2019 to 2023, Shengjing Micro's operating income gradually expanded from 75.1026 million yuan to 823 million yuan, and its net profit increased from tens of millions of yuan to hundreds of millions of yuan. In 2022 and 2023, Shengjing Micro's attributable net profit was 185 million yuan and 195 million yuan respectively.

But the momentum of "steady improvement" came to an abrupt halt after the listing. The first quarter report of 2024 showed that it had a loss of 2.2842 million yuan and its operating income also fell by 41.62% to 88.6588 million yuan. This is the first time that Shengjingwei has experienced a decline in performance.

According to its semi-annual performance forecast, the attributable net profit in the first half of 2024 is expected to be 7.6 million yuan to 9.2 million yuan, a year-on-year decrease of 79.9395 million yuan to 81.5395 million yuan, a decrease of about 91.47% to 89.68%. The non-net profit is expected to be 4.68 million yuan to 6.28 million yuan, a year-on-year decrease of 80.2203 million yuan to 81.8203 million yuan, a decrease of about 92.74% to 94.59%.

As for the reason, Shengjingwei mainly attributed it to the squeeze of the industry and industrial chain.

On the one hand, Shengjingwei said that the market demand for the civil explosives industry was weak, and the industry as a whole showed a downward trend of shrinking volume. The provinces where the company's main customers are located and the regions where its end customers are located have seen a significant decline, resulting in a decline in the company's order volume. On the other hand, the semiconductor industry is in a downward cycle with fierce competition. The production capacity of electronic detonators of downstream customers has been released, and price pressure has led to a decline in the average price of the company's products.

Weak demand from downstream customers

Shengjingwei's main business products are electronic control modules, which are the core components of electronic detonators. Currently, it mainly serves the domestic civil explosives industry. It is in the upper and middle reaches of the industrial chain. The upstream of the industrial chain mainly includes wafer manufacturing, packaging and testing, module processing, electronic components, mechanical processing and other industries, while the downstream includes detonator factories, blasting companies and other civil explosives industries.

The prospectus shows that Shengjing MicroComparable Companies in the Electronic Control Module BusinessYoulixinwei (688602.SH）、Youfang Technology（688159.SH）、Lihewei（688589.SH), from the first quarter data, the performance of the three companies showed different degrees of growth, Youfang Technology's year-on-year growth rate was as high as 400.36%. In comparison, Shengjing Micro, whose products are mainly for the civil explosives industry, had a larger decline in performance in the first half of the year among its peers.

According to the data of China Explosive Equipment Industry Association, in 2024In the first half of the year, the cumulative production and sales of industrial detonators by manufacturing enterprises were 312 million and 305 million, respectively, down 6.04% and 8.42% year-on-year. In terms of the output of industrial detonators, in the first half of the year, the output of electronic detonators was 292 million, down 3.5% year-on-year. Electronic detonators accounted for 93.59% of the total output of industrial detonators, an increase of 2.3 percentage points over the same period in 2023.。

A person from a leading company that provides chips for electronic control modules told Jiemian News:Compared with the same period last year, the electronic control module business in the first half of this year is indeed not so prosperous, and the demand from downstream customers, electronic detonators, is weak. On the other hand, electronic detonators are generally not produced much near the end of the year, and there are safety production meetings in March, so they are concentrated in April, May, and June. Therefore, the shipment situation in the second half of the year will be better.

On the sales side, Shengjing Micro is highly dependent on the top five customers. Yahua Group (002497), which mainly engages in lithium business and civil explosives business,.SZ) is Shengjingwei’s largest customer over the years. From 2019 to 2022,The sales of Shengjing Micro to its top five customers accounted for 99.85%, 93.68%, 75.57% and 65.94% respectively. Among them, the sales of Shengjing Micro to Yahua Group amounted to RMB 33.1735 million, RMB 106 million, RMB 118 million and RMB 23.7 million respectively.1.2.1 billionYuan, accounting for 44.17%, 50.49%, 33.23% and 28.66% respectively.

Yahua Group's performance in the first half of the year was also not ideal. According to its performance forecast, the company expects to make a profit of 80 million to 120 million yuan in the first half of the year, a year-on-year decrease of 91.58% to 87.38%. However, the main reason for its performance loss is the continued decline in market prices in the lithium industry, and it did not mention the civil explosives business more. On the contrary, its second-quarter explosives sales increased by 46% month-on-month, and electronic detonator sales increased by 54% month-on-month.

At an investor relations event in May, Shengjing Micro expected that sales volume this year might increase, and revenue would maintain last year's level, hoping for a slight increase. It also said that this year's economic situation and recovery were not as good as expected, which had an impact on the industry market.