On June 20th, Western Superconducting Technologies’ IPO listing proposal was successfully approved by the SSE Star Market committee. It is the first company in Shanxi province to complete this process. On the very next day, Arcsoft, a leading algorithm and software provider in the computer vision technology industry was also approved. Sensegain have invested in both companies and remain committed in our value investment approach.
The formally Science and Technology Innovation Board will officially launch as the SSE Star Market, part the the Shanghai Stock Exchange. The Nasdaq – style board debuted on the 13th of June and will likely welcome the first batch of companies to start trading in the next two months. The board was proposed by President Xi Jingping to encourage technology companies to list domestically and will pilot a registration-based IPO system. It also approves companies to do spin-off listings as well.
Established in 2003, Western Superconducting Technologies is China’s leading manufacturer of premium titanium and superconducting materials. It specializes in the research, development and selling of titanium alloy products and low temperature superconducting materials. Western is the only company in China that can product superconducting wire at a commercial level and the only company in the world that have mastered the whole production line process for NbTi superconducting wires.
Western’s main products are premium titanium alloy materials, superconducting products and high temperature alloy materials. They are all classified as national key value products. In the 2018 annual report, top-line revenues were 1.08 Billion RMB and profit were 134 Million RMB. The company currently have over 200 research projects and 316 licensed patents. R&D costs in 2018 were 8.31% of total revenue.
Western’s list of high-profile customers includes: Aviation Industry Corporation of China, Aero Engine Corporation of China, GE, Siemens, ITER China. In the 2018 annual report, Western expects a growing demand in titanium products due to the increased demand in army jets, engine R&D and aviation vehicles. Also, the increase of domestic MRI manufacturers will expand the market demand for superconducting materials. The operational success and current investor confidence will support Western’s public performance on the SSE Star Market.
Arclight was established in 1994. Since inception, it has been focusing on the development and application of computer vision and related artificial intelligence. It has a thorough grasp of visual algorithms, especially related to image analysis and processing on multi-cameras for mobile devices. At the end of 2018 it holds 129 patents in that field and 73 software copyrights. It was already an industry leader ten years ago. Over the years Arclight’s key customers evolved from camera makers such as Sony, Canon and Nikon to smartphone providers Samsung, Huawei, Oppo, Xiaomi etc. Currently Arclight services almost all smartphone companies (*except for Apple who uses in-house visual algorithm). Notably, Arclight’s partnership with Samsung has been over 15 years.
Sensegain invested in Arcsoft in April 2018, at that time Arclight has already maintained its position as the global leader in mobile device visual algorithms. With the continuous upgrades to mobile cameras, we see strong potential strong in this area and in Arclight. Also, Arclight’s core competency derives from a technology superiority which can be strategically applied to other IoT industries. We are impressed by the ability of Arcsoft’s executive team and see huge value in its future potential in areas outside of smartphones. Post – IPO, Sensegain aims to continue its LP responsibility and assist Arcsoft with investments.
Sensegain continues primary investments with the belief that industry drives investment and research creates value. In the tech space, our investments are driven by value of technology. In the primary market in general, we narrowed our focus to three subsectors: “Tech China”, “Manufacturing China”, and “Health China” and seek to support premium companies with high innovation and growth potential.