It has been nearly 7 months since the application was accepted, and the Bolante Science and Technology Innovation Board IPO has ushered in new progress.

Bolant, whose IPO on the Science and Technology Innovation Board was accepted at the end of last year, recently issued its first round of inquiry letter responses.

Bolante is mainly engaged in the research, development and application of new semiconductor materials, devices and related equipment. Its current main products include PSS (patterned sapphire substrate), silicon carbide substrate and photolithography machine modification equipment.

In 2020, Bolante achieved revenue of 385 million yuan and net profit of 39.9542 million yuan, of which PSS products accounted for 91.42% of the company's total revenue. The response document to the inquiry letter shows that H&S High Tech Corp., Qianzhao Optoelectronics, Azure Lithium Core, Zhaochi Co., Ltd. and Gold Fung Reliance Group Ltd. are the top five customers of Bolant in 2020, with combined sales revenue accounting for 84.83% of Bolant's total revenue.

Image source: Bolant Science and Technology Innovation Board IPO review inquiry letter response document

At the same time, including Huacan Optoelectronics, Development Crystal, Caihong Group, Heidico, Dehao Runda, Nantong Tongfang Semiconductor, etc. are also the main customers of Bolant.

In preparation for the IPO of the Science and Technology Innovation Board, Bolante plans to raise 505 million yuan, which will be invested in a special patterned sapphire substrate project with an annual output of 3 million Mini/Micro LED chips, a sapphire substrate project with an annual output of 5.4 million pieces, and a third-generation semiconductor R&D center construction project.

According to Bolante's reply document, the Shanghai Stock Exchange's review inquiry letter for Bolante's Science and Technology Innovation Board IPO mainly focused on issues such as equity structure, business situation, core technology, and operational independence.

In terms of equity structure, Bolant was formerly a holding subsidiary of the listed company Dongjing Electronics. It was jointly funded and established by Dongjing Electronics and South Korea's CTLab, and both parties have currently withdrawn. As of the time of reply to the inquiry letter, Bolante’s shareholders include Xu Liang, Deshengtong, Liu Zhongyao, Boyuan Investment, Qianxin Investment, Shenzhen Venture Capital, etc. Among them, Xu Liang is the controlling shareholder and actual controller, holding approximately 16.67% of Bolante’s equity.

In terms of business situation, Bolante's main products include sapphire flat wafers, PSS, silicon carbide substrates and photolithography machine modification equipment. Among them, sapphire flat wafers are the main raw material of PSS and are generally not sold to the outside world.

At the same time, Bolante also engages in the research and development, production and sales of semiconductor devices such as blue-green LED chips and deep ultraviolet LED chips. Currently, blue-green LED chips are in the small-batch testing stage and are cooperating with Zhaochi Semiconductor and Yancheng Dongshan Precision; deep ultraviolet LED chips are in the research and development stage.

Regarding PSS, the main business, Bolant said that the company relies on years of technology accumulation and market development. It has obvious competitive advantages in terms of product cost, yield rate, parameter consistency and production capacity scale, and its product quality can meet the needs of well-known downstream domestic and foreign LED chip companies.

With the advent of the ultra-high-definition display era, Mini/Micro LED has high hopes as a new generation of display technology. Based on feedback from downstream customers and years of experience in producing PSS, Bolant has also developed a dedicated substrate for Mini LED chips that is more suitable for the production of Mini LED chips. It is currently in the customer testing stage.

Bolante said that the company will actively build new Mini/Micro LED dedicated production lines through fundraising projects, which will enable it to seize market opportunities and enhance its market competitiveness, while further consolidating and enhancing its industry status and technological advantages.

In terms of core technology, only the technologies involved in the production of special substrates for PSS and Mini/Micro LED chips, Bolant already has ultra-clean nano-level pattern cleaning technology, high-efficiency nano-imprint technology, high-quality etching tray technology, and high-uniformity plasma drying French etching technology and other core technologies.

According to Bolante, in terms of high-uniformity plasma dry etching technology, the etching technology development in the industry is currently becoming mature, but the core difficulty in etching, that is, the etching rate of the inner and outer rings has not been effectively solved. The level of dry etching determines the performance of integrated circuit devices and the future development of Mini/Micro LED to a certain extent.

In terms of operational independence, since Qianzhao Optoelectronics, one of the top five customers of Bolant, holds 66.01% of the capital contribution of Qianxin Investment as a limited partner, and Qianxin Investment holds 4.43% of the equity of Bolant, the Shanghai Stock Exchange asked Bolant whether there is any significant dependence on Qianzhao Optoelectronics.

In this regard, Bolante introduced in the reply document to the inquiry letter that Qianzhao Optoelectronics began business cooperation with the company in 2015. Based on its recognition of the product and overall competitive strength, it began to increase capital through dry core investment in 2018. At the same time, in the past three years, Bolante's sales revenue to Qianzhao Optoelectronics has accounted for around 30% of its revenue.

Bolant believes that the company has deeply cultivated semiconductor materials Having been in the field for many years, it has established a complete R&D, production and sales system in the field of semiconductor substrates. The company has formed a long-term and stable cooperative relationship with Qianzhao Optoelectronics, and the pricing policy for sales to Qianzhao Optoelectronics is consistent with that of other third-party customers, and there is no significant dependence or transfer of benefits.

It is understood that Qianzhao Optoelectronics planned to acquire Bolante in 2018, but because the matter required the approval of a majority of shareholders and the external environment changed, it decided to terminate it.