China’s securities watchdog has approved an application from chipmaker Rockchip to list on the Shanghai bourse, as the company taps the capital markets following an unsuccessful attempt to go public three years ago.

Why it matters: Founded in 2001, Rockchip failed to list on Shenzhen’s ChiNext board in 2017 for “critical sales stagnation and asset decline,” according to China Money Network.

  • ChiNext was set up as a way for predominantly high-tech firms that do not meet the requirements of Shenzhen’s main board to go public.
  • China plans to domestically produce 75% of all key components, which includes chips, by 2025 amid a protracted trade war with the US.

Details: Based in the eastern Chinese city of Fuzhou, Rockchip has launched a series of artificial intelligence (AI) chips since its failed listing.

  • Rockchip’s revenue in the first half of 2019 reached RMB 574 million ($83.3 million) while its net profit was RMB 66 million.
  • The company’s full-year 2018 revenue grew around 2% year on year, while its profits surged 80% to reach RMB 192 million during the same period.
  • China Industrial Securities is underwriting the chipmaker’s initial public offering (IPO). The company’s roadshow will be held online on Friday.
  • Rockchip said its IPO will not exceed 42 million common shares.
  • The company launched its first AI chip in 2018, followed by another in 2019 that combined AI and internet of things (AIoT) infrastructure, which enabled voice recognition and face detection functionality.
  • Payments platform Alipay uses Rockchip’s AI chip solution in its Dragonfly facial recognition point of sales system.
  • The company holds around 400 patents, which include 27 for integrated circuit designs, according to its prospectus. Manufacturers including Samsung, Sony, Huawei, Oppo, and Vivo have adopted its products, the company said.
  • It is unclear whether Rockchip will list its shares on the main Shanghai exchange or the high-tech STAR Market board.

Context: Rockchip produces chips for handheld devices including tablets and smartphones, as well as TV boxes, IoT hardware, and is looking to tap the smart speaker market.

  • While China has downplayed its Made in China Initiative amid trade tensions with the US, the country is setting out ambitious goals to increase its technological independence, a move that will be driven by domestic companies.

Chris Udemans

Christopher Udemans is a Shanghai-based data and graphics reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.

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