Crystal Electronic's IPO "terminated" due to the company's risk of product customization.

On March 12, Shenzhen Jinghua Display Electronics Co., Ltd. (referred to as "Jinghua Electronics") had its IPO review status on the Shenzhen Stock Exchange's ChiNext Board changed to "terminated," with the reason being the company's application to withdraw its application for listing. According to the prospectus, Jinghua Electronics is a high-tech enterprise specializing in the research, development, production, and sales of smart display controllers, LCD display components, and other products in the Internet of Things field. It is a premium service provider in the field of human-machine interaction display and smart control. The company's main products include smart display controllers, monochrome LCD display components, color LCD display components, which are widely used in various professional fields such as smart homes, industrial control and automation, OA offices, smart vehicle systems, and intelligent healthcare. Established in 1987, the company has been deeply involved in the field of human-machine interaction displays and smart control for over thirty years. The general manager, deputy general manager, and core technical staff have all been working in the company for over 20 years, ensuring a stable core team. The company's core business technologies span across display technology, embedded software design, electronic circuit design, mechanical design, RF and wireless design, human-machine function design, and other hardware and software technologies, giving it a unique interdisciplinary technical capability and a strong competitive advantage in the market. The company is recognized as a national high-tech enterprise, a specialized and innovative small and medium-sized enterprise in Shenzhen, and a vice chairman unit of the China Society of Optics and Optoelectronics LCD Branch, showcasing strong technological innovation capabilities. After years of development, the company has built an experienced, efficient research and development design, and manufacturing team, reinforced its autonomous software development capabilities, and has a well-established team of software and hardware development and testing engineers, allowing it to quickly design high-quality human-machine interactive terminal integrated products according to the needs of different customers. As of June 30, 2023, the company has a total of 170 research and development personnel, accounting for 14.78% of the total number of employees. Building on its expertise in display technology, the company has keenly anticipated the Internet of Things as a major trend in downstream application market development in the future, and has positioned itself early in the related technological reserves, increasing research and development investment in intelligent interactive control technology. Currently, the company has a relatively complete capability in customizing the design, development, and manufacturing of display and control products. Moreover, the company can meet customers' one-stop procurement needs for human-machine interactive displays and smart controls, with customers spanning across smart homes, industrial control and automation, OA offices, smart vehicle systems, and intelligent healthcare. With outstanding technology and customized services, stable and reliable product quality, and a rapid response to customer needs, the company has established long-term stable commercial partnerships with well-known domestic and foreign companies such as Daikin, Kohler, Schneider, Gree, DJI, Eaton, GE, Canon, Panasonic, receiving high recognition from customers and various awards like Schneider's Outstanding Quality Supplier Award, GE's Best Collaboration Award, Panasonic's Quality Improvement Award, and Daikin's Future Star Award, gaining a good reputation in the industry and highlighting the company's leading position in the field of human-machine interaction display and smart control. In terms of finances, the company achieved operating revenues of approximately 264 million yuan, 370 million yuan, 521 million yuan, and 195 million yuan in 2020, 2021, 2022, and January to June 2023, respectively. During the same periods, the company achieved net profits of 20.0979 million yuan, 29.5718 million yuan, 59.343 million yuan, and 10.7235 million yuan. It is worth noting that Jinghua Electronics mentioned in the prospectus that the company faces risks related to product customization. The company's products are mainly custom-made, with characteristics of "small batches and multiple varieties," which can to some extent avoid product overstock, stabilize inventory, and reduce reliance on single customers or single model products. However, compared to standardized production models, custom production requires diverse production processes and workflows, frequent adjustment of equipment, and allocation of personnel, leading to a certain degree of decrease in production efficiency and increasing difficulty in quality control. Although the company has been using a custom production model for many years, establishing long-term stable cooperation relationships with major customers through years of design, research and development, trial production, and other stages, if the company cannot make forward-looking judgments based on changes in customer requirements within the industry, quickly respond to and accurately grasp the market, it may lead to the company's inability to adapt to customers' evolving needs, which could have an adverse impact on the company's future development, market position, and profitability.