Earnings pressure sent shares down 70%

Minxin is an enterprise that has the capability of designing and manufacturing MEMS chips in various categories, and is committed to becoming a leading MEMS chip platform enterprise in the industry. At present, the main product lines include MEMS acoustic sensors, MEMS pressure sensors and MEMS inertial sensors.

According to the annual report, the company achieved operating income of 293 million yuan in 2022, a year-on-year decline of 16.8%; Net loss of 54.93 million yuan, a decrease of 542.16%; Gross profit margin was 25.75%, down 9.22 percentage points year-on-year.

According to the reasons for the sharp decline in the company’s net profit, the main reason is the decline in the unit price of some products caused by the intensification of industry competition, and the decline in the overall gross margin; The increase of inventory volume, the longer inventory turnover time, and the increase of falling price risk lead to the increase of impairment provisions; The company’s capacity expansion, customer breakthrough, new product research and development is in the early stage of investment or early verification, and the relevant investment benefits have not been reflected in the current period.

As of the first quarter of 2023, the company achieved operating income of 66 million yuan, down 11.36% year-on-year; Net profit attributable to mother was -0.21 million yuan, down 674.39% year on year; Non-net profit was -25 million yuan, down 681.5% year-on-year.

In May this year, Li Gang, chairman of Minxin shares, said at the company’s 2022 annual shareholders’ meeting that the mobile phone market was in decline last year, and some analysis pointed out that the global mobile phone market may decline by nearly 10% this year, and the consumer electronics as a whole is not particularly optimistic, relatively lacking in innovation, and the current supply is greater than demand, of course, there is a periodicity.

Li Gang also said that the consumer electronics cycle is particularly strong, to take advantage of the trend, waiting for the arrival of the next cycle. In addition, Minxin shares will also lay out some segments with good gross profit.

Performance continued to be under pressure, and the company’s share price performance was depressed. In terms of the performance of the capital market, the stock price of Minxin, which has been listed for less than three years, has fallen more than 70% from its peak.

On August 10, 2020, Mincore shares were listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, with an issue price of 62.67 yuan/share. On the first day of listing, Mincore shares reached the highest intraday price of 249.90 yuan on the day of listing, an increase of 298.76%.

Since then, the stock price has fluctuated all the way down, as of July 7, the closing price of Minxin shares was 63.69 yuan/share, which fell 75% from the highest point, and the total market value of 3.413 billion yuan.

The falling stock price trend since the company’s listing has also attracted the attention of many investors. On the investor interactive platform, some investors asked questions about the company’s stock price decline of more than 70% since its listing.

In this regard, the company’s secretary replied, “The secondary market stock price is affected by many aspects, and is related to the macroeconomic environment, the capital market funding situation, the market trend, market sentiment and other factors, please investors rationally look at stock price fluctuations.” At the same time, the company attaches great importance to communication and exchange with investors, and will continue to strengthen investor relations management in the future to convey the company’s core values and business philosophy to the market.”