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Vaping Chip Supplier Tuoer Micro Ends IPO; Previously Faced Over RMB 30 Million Claim From Jinjia Ov

H cink2023-08-17Views 1033Source 未知

Key point: Public information shows that the IPO review of Tuoer Microelectronics Co., Ltd. for listing on Shenzhen’s ChiNext board has been terminated by the Shenzhen Stock Exchange.

Publicly available information shows that the initial public offering and listing on the Growth Enterprise Board of Tuoer Microelectronics Company Limited (hereinafter referred to as "Tuoer Micro") audit was terminated by the Shenzhen Stock Exchange. As an integrated circuit design company, Tuoer Micro mainly serves the electronic cigarette industry. Behind the incident involves customer-supplier entry issues, policy implications and successive lawsuits, changes that could impact the IC supply chain in the e-cigarette industry.

Top Micro's business and market performance

Stable performance and high gross margin: Top Micro's revenue and net profit have maintained stable growth in recent years. Among them, the gross profit margin of the company's business is maintained at a high level of 55.05%, 53.61%, 58.79% and 58.29% respectively from 2019-2022.
Business concentrated in e-cigarette field: the main products of Tuoer Micro, such as Airflow Sensor module and e-cigarette MCU solution board, both accounted for more than 69% of the total revenue.

IPO termination of the possible reasons

Customers and suppliers into the price difference is significant: in the top micro IPO before the company's customers and suppliers Huawei Holdings, Zongtou Zhanlu, etc., the price of the company's customers and suppliers into the price of the shares is much lower than the top micro the same period of time the external investors. This has caused the concern of the Shenzhen Stock Exchange, and asked to analyze the compliance of these low-priced shares and whether there is a transfer of benefits.
"Package" deal raises doubts: Tuoer Micro signed a capacity cooperation agreement with Huawei Holdings, the controlling shareholder of supplier China Resources Shanghua. This is regarded as a package deal, caused the Shenzhen Stock Exchange for the existence of improper trading doubts.

Impact on the electronic cigarette industry

Supply chain stability is being tested: Tuoer Micro, as an important supplier of integrated circuits in the electronic cigarette industry, the termination of the IPO may have an impact on its research and development and production capacity, which will in turn Impact on the stability of the integrated circuit supply chain of the entire electronic cigarette industry.
Policy impact continues to ferment: in March 2022, the State Tobacco Monopoly Administration issued the "Measures for the Administration of Electronic Cigarettes", which set the entry threshold for the e-cigarette industry, stipulating that to engage in e-cigarettes-related production and business activities, you need to obtain the license for tobacco monopoly manufacturers, and you should have the capital, technology, and equipment, etc., and the establishment of e-cigarettes-related manufacturing enterprises and the expansion of production shall be subject to approval of the State Council's administrative department of tobacco monopoly. The establishment and expansion of e-cigarette-related production enterprises are subject to the approval of the State Council's tobacco monopoly administrative department.
Market Reassessment of Supplier Risks: The legal proceedings of Tuoer Micro and the review of the Shenzhen Stock Exchange may make e-cigarette companies reassess the stability and reliability of their suppliers, and thus be more prudent in selecting suppliers of integrated circuits.
Notably, Tuoer Microelectronics has been hit with two consecutive lawsuits. The first case came from Jinjia Technology, claiming that the quality of the airflow sensors sold by Tuoer, claiming 30,539,000 yuan and litigation costs; the second case was initiated by Suzhou Jianwei, accusing Tuoer of using a similar trademark, "TMI", and infringing on its registered trademark rights, demanding compensation of 2 million yuan. The second case was initiated by Suzhou Jianwei, which accused Tuoer of using a similar trademark "TMI", infringing its registered trademark right, and demanded compensation of 2 million RMB and cessation of infringing behavior.

Conclusion

The termination of Tuoer Micro's IPO review is not only an important turnaround for the company, but may also have a far-reaching impact on the entire IC supply chain of the e-cigarette industry. Industry practitioners need to pay close attention to the subsequent development of this event and prepare a response strategy in advance to maintain their sound operation.

Tags:e-cigarette supplier industry Shenzhen Stock Exchange integrated circuits

HNB Editorial Team

HNB Home focuses on heated tobacco and vaping industry coverage, including product reviews, brand information, and global market updates.

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