AXT, Inc. Announces Next Filing Step for IPO in China
05 Julho 2022 - 5:05PM
AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound
semiconductor wafer substrates, today announced that its wafer
manufacturing subsidiary in China, Beijing Tongmei Xtal Technology
Co., Ltd. (“Tongmei”), submitted to the Shanghai Stock Exchange,
and the Shanghai Stock Exchange accepted for review, additional
documents as the next step in the process of listing Tongmei’s
shares in an initial public offering (the “IPO”) on the Shanghai
Stock Exchange’s Sci-Tech innovAtion boaRd (the “STAR Market”).
This is the fourth round of submissions and conforms to the normal
processes and steps toward a listing on the STAR Market.
Management Qualitative
Comments
“We believe we are making good progress on the
IPO,” said Morris Young, chief executive officer. “The initial
filing was formally accepted for review by the Shanghai Stock
Exchange on January 10, 2022. Since then, we have replied to two
rounds of questions. The recent submission is our fourth filing and
updates items previously submitted as well as provides new
information, including additional financial information presented
under the Accounting Standards for Business Enterprises under
Chinese generally accepted accounting principles (“Chinese GAAP”).
It is important for our investors to understand that Tongmei’s
results do not equate to AXT, Inc.’s results and that Chinese GAAP
can differ materially from U.S. GAAP. AXT is not updating the
guidance we provided on April 28, 2022 for Q2 2022. As we continue
to work through the IPO process, we are encouraged by the progress
of our application. I am proud of our team for their diligence and
appreciate the support and guidance from our investment bank and
law firm in China.”
STAR Market Listing Update
In conjunction with the IPO process, the Shanghai Stock Exchange
posted on its website certain consolidated financial results for
Tongmei for the three months ended March 31, 2022, and Tongmei’s
preliminary expectations for those financial results for the six
months ended June 30, 2022. Tongmei’s financial results were
determined in accordance with Chinese GAAP and consisted of the
following:
- Revenue of Tongmei under Chinese GAAP for the three months
ended March 31, 2022 was RMB 252.6 million, as compared to RMB
193.2 million for the three months ended March 31, 2021.
- Net profit attributable to the shareholders of Tongmei under
Chinese GAAP for the three months ended March 31, 2022 was RMB 20.4
million, as compared to RMB 13.9 million for the three months ended
March 31, 2021.
- Revenue of Tongmei under Chinese GAAP for the six months ended
June 30, 2022 is preliminarily estimated to be in the range of RMB
456.2 million to RMB 557.6 million, as compared to RMB 393.6
million for the six months ended June 30, 2021.
- Net profit attributable to the shareholders of Tongmei under
Chinese GAAP for the six months ended June 30, 2022 is
preliminarily estimated to be in the range of RMB 44.3 million to
RMB 54.2 million, as compared to RMB 40.2 million for the six
months ended June 30, 2021.
The preliminary estimates of revenue and net profit set forth
above with respect to the six-month period ended June 30, 2022
reflect the consolidated, stand-alone results of Tongmei in RMB as
prepared in accordance with Chinese GAAP, and those results will
differ, potentially materially, from AXT, Inc’s consolidated
revenue and net profit for the period, which will reflect
additional financial and operational items and will be prepared in
U.S. dollars in accordance with U.S. generally accepted accounting
principles (“US GAAP”).
The process of going public on the STAR Market
includes several periods of review and, therefore, is a lengthy
process. Tongmei expects to accomplish this goal in the second half
of 2022. AXT has posted a brief summary of the plan and the process
on its website at http://www.axt.com.
About AXT, Inc.
AXT is a material science company that develops and manufactures
high-performance compound and single element semiconductor
substrate wafers comprising indium phosphide (InP), gallium
arsenide (GaAs) and germanium (Ge). The company’s substrate wafers
are used when a typical silicon substrate wafer cannot meet the
performance requirements of a semiconductor or optoelectronic
device. End markets include 5G infrastructure, data center
connectivity (silicon photonics), passive optical networks, LED
lighting, lasers, sensors, power amplifiers for wireless devices
and satellite solar cells. AXT’s worldwide headquarters are in
Fremont, California and includes sales, administration and customer
service functions. AXT has its Asia headquarters in Beijing, China
and manufacturing facilities in three separate locations in
China. In addition, as part of its supply chain strategy, the
Company has partial ownership in ten companies in China producing
raw materials for its manufacturing process. For more information,
see AXT’s website at http://www.axt.com.
Forward-Looking Statements
The foregoing paragraphs contain forward-looking
statements within the meaning of the Federal securities laws,
including, for example, statements regarding the preliminary
estimates of Tongmei’s revenue and net profit for the six-month
period ended June 30, 2022 and the progress, timing and estimated
completion of the proposed listing of shares of Tongmei on the STAR
Market. These forward-looking statements are based upon assumptions
that are subject to uncertainties and factors relating to the
company’s operations and business environment, which could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements contained in the foregoing
discussion. These uncertainties and factors include but are not
limited to: the requests for redemptions by private equity funds in
China of investments in Tongmei, the administrative challenges in
satisfying the requirements of various government agencies in China
in connection with the listing of shares of Tongmei on the STAR
Market, continued open access to companies to list shares on the
STAR Market, investor enthusiasm for new listings of shares on the
STAR Market and geopolitical tensions between China and the United
States. Additional uncertainties and factors include, but are not
limited to: the timing and receipt of significant orders; the
cancellation of orders and return of product; emerging applications
using chips or devices fabricated on our substrates; end-user
acceptance of products containing chips or devices fabricated on
our substrates; our ability to bring new products to market;
product announcements by our competitors; the ability to control
costs and improve efficiency; the ability to utilize our
manufacturing capacity; product yields and their impact on gross
margins; the relocation of manufacturing lines and ramping of
production; possible factory shutdowns as a result of air pollution
in China or COVID-19; COVID-19 or other outbreaks of a contagious
disease; tariffs and other trade war issues; the financial
performance of our partially owned supply chain companies; policies
and regulations in China; and other factors as set forth in the
company’s Annual Report on Form 10-K, quarterly reports on Form
10-Q and other filings made with the Securities and Exchange
Commission. Each of these factors is difficult to predict and many
are beyond the company’s control. The company does not undertake
any obligation to update any forward-looking statement, as a result
of new information, future events or otherwise.
Contacts: |
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Gary Fischer |
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Chief Financial Officer |
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(510) 438-4700 |
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Leslie Green |
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Green Communications Consulting, LLC |
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(650) 312-9060 |
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