Industry background of Jiangsu Dongguang Microelectronics Co., Ltd.

Discrete devices of the company's products account for a relatively small proportion in the semiconductor industry, about 10%, while power devices account for the largest proportion, accounting for 5 1.6% in 2008. The domestic discrete device market is mainly occupied by foreign manufacturers, with a market share of 83.6% in 2008. There is a huge space for import substitution, but at the same time the technical barriers are also high. Power devices mainly include three types: rectifier, thyristor and power transistor.

Power transistors represented by MOSFET and IGBT are the products with the fastest development speed and the largest market space. For example, in 2008, the domestic sales of MOSFET reached 23.7 billion yuan, accounting for 28.8%.

Competitive advantage: 1) Technology and R&D advantages. The company does not do OEM, insists on independent innovation, operates in IDM mode, and realizes import substitution in many product fields such as solid discharge tubes and VDMOS.

2) Market brand advantage. The company is good at discrete power devices, occupying an absolute dominant position in the communication protection device market, with a market share as high as 80%.

3) Cost advantage. Because the company operates in IDM mode, it relies on the localization of the company's equipment to reduce product costs.

Fund-raising project: the funds raised in this issuance are planned to be invested in three directions: 1) semiconductor protection power device production line project; 2) Technical transformation project of new power semiconductor device production line; 3) Semiconductor packaging production line project.

Investment suggestion: It is estimated that the diluted earnings per share of the company in 10 and1year will be 0.35 yuan and 0.50 yuan respectively, and the dynamic P/E ratio of the company in 10 will be 35-40 times, and the company will be reasonably valued at 12.40 yuan-/kloc-0.