Jifeng Electronics: The Technical Math Behind Turning Testing Services Into a One-Stop Business

Shanghai Jifeng Electronics Co., Ltd. was established in July 2008 and converted into a joint-stock company in August 2016. It was also listed on the New Third Board in its early years (January 2017 to March 2021), and submitted its ChiNext IPO application on June 10, 2026. The actual controllers are siblings Zheng Zhaohui and Zheng Qijun. Zheng Zhaohui directly holds 15.91%, and the two together control 36.38% of voting rights.

The company's core identity is that of a semiconductor testing service provider, with its business divided into three parts: third-party laboratory testing and analysis services, including failure analysis, material analysis, and reliability testing; testing hardware products, mainly integrated circuit test boards; and volume production testing and electronics manufacturing services.

This one-stop layout of testing services plus hardware products plus volume production testing is the differentiated positioning that Jifeng Electronics repeatedly emphasizes in its prospectus, meaning customers do not need to switch between multiple suppliers and can complete everything from chip failure analysis to final volume production testing within one company.

The foundation for this one-stop layout comes from the high gross margins of the third-party laboratory testing and analysis business. According to the prospectus, the gross margins of the material analysis business from 2023 to the first half of 2026 were 55.59%, 68.95%, and 58.76%, respectively, while those of reliability testing over the same period were 46.13%, 35.75%, and 42.42%, all significantly higher than the company's overall main business gross margin (38.49%, 37.54%, 35.74%, and 33.24% over the same periods).

Businesses such as material analysis require long-term equipment investment and accumulated process experience, and are not areas in which just any company can quickly enter and compete. Jifeng Electronics has made this high-gross-margin business a supporting pillar of its overall business structure.

The financial data also support this growth trajectory. Jifeng Electronics' operating revenue over the past three years was RMB 443.3665 million, RMB 583.4829 million, and RMB 669.4934 million, respectively, and was RMB 378.8576 million in the first half of 2026, maintaining overall growth. Net profit attributable to the parent company after deducting non-recurring gains and losses (using the lower-of-the-two basis in the prospectus) increased from RMB 18.1295 million in 2023 to RMB 73.5684 million in 2025, more than tripling in three years.

The weighted average ROE rose from 3.53% to 10.80% over the same period, making the improving profitability trend clearly visible. In terms of R&D investment, the company invested a cumulative RMB 174 million in R&D over three years, accounting for 8.39% of cumulative revenue, with a cumulative patent portfolio of 140 patents, including 58 invention patents. This patent structure supports the company's continued investment in technology-intensive services such as failure analysis and material analysis.

For this IPO, Jifeng Electronics plans to raise total investment of RMB 1.003 billion, of which RMB 450 million will be invested in the Pudong Technology Center project, RMB 205 million in the automotive-grade high-reliability volume production testing service construction project, RMB 148 million in the chip pilot testing platform engineering technology R&D project, and another RMB 200 million for supplementary working capital. The focus of the fundraising points to automotive-grade testing capabilities and technology center construction, consistent with the direction of the company's existing accumulated testing service technology, representing deep extension based on its existing advantageous businesses rather than cross-industry expansion into new tracks.

The automotive-grade testing direction itself also aligns with the trend of localization in the new energy vehicle industry chain, and downstream customers already include lidar manufacturers such as Hesai Technology.

The company's review pace has advanced relatively quickly among recent ChiNext applicants. On June 25, 2026, the exchange issued the first round of inquiry letters; on August 14, the company disclosed its first-round reply; on August 26, it immediately received the second round of inquiry letters; and on September 22, the second-round reply was made public. Completing two rounds of inquiry procedures in less than a hundred days indirectly shows that the basic quality of the company's disclosure materials has been recognized by the regulator, with no low-quality disclosures requiring repeated supplementary explanations.

This one-stop testing service model also has another layer of moat: the scale barrier formed by equipment investment. According to the prospectus, the original value of Jifeng Electronics' dedicated testing equipment has continued to grow, and the company's newly built technology center project in Pudong is precisely intended to expand this kind of asset-heavy testing capacity. The semiconductor testing industry has relatively high requirements for equipment precision and production capacity scale. For new entrants to replicate Jifeng Electronics' existing laboratory testing capabilities and hardware product system, both the capital and time costs required are substantial. This is also one of the reasons the company can maintain a steady improvement in overall profitability in an industry environment where gross margins are under pressure.

Jifeng Electronics' customer structure is also a section worth elaborating on in the prospectus. The company's top five customers did not account for a high proportion of revenue, at 16.49%, 25.80%, 19.76%, and 18.22% from 2023 to the first half of 2026, respectively, far below the common level of similar testing service companies, indicating that the company's order sources are dispersed among numerous semiconductor design and manufacturing companies and that it is not exposed to the risk of being bound by a single major customer with bargaining power.

This dispersed customer structure mutually corroborates the company's business layout covering multiple segmented service categories such as failure analysis, material analysis, and reliability testing. Its one-stop service capability enables Jifeng Electronics to simultaneously serve different types and sizes of semiconductor customers.

Two other areas in the prospectus are left for subsequent inquiries to continue verifying. First is Jifeng Electronics' volume production testing and electronics manufacturing services business, which it is currently cultivating. From 2023 to the first half of 2026, its gross margins were negative 0.79%, negative 51.96%, negative 93.74%, and negative 72.49%, respectively. As of the first half of 2026, the original value of related dedicated equipment invested had exceeded RMB 48 million. The company explains that the new business is in the stage of capacity ramp-up and customer introduction. The prospectus does not provide a specific timetable for when this business will achieve break-even.

Second is the issue specifically pursued in the second round of inquiry letters regarding overlap between customer and competitor identities: the prospectus discloses that Suzhou Sushi Testing was the company's second-largest customer in 2025, while its subsidiary Suzhou Sushi Yite is also a direct competitor of the company; Taiwan Hong Kang Technology is likewise both an important customer and one of the main competitors. Jifeng Electronics provided an explanation for this in its second-round reply. Whether such cross-relationships will affect the fairness of revenue recognition is still under the exchange's verification procedures.

Whether Jifeng Electronics can extend the technical barriers of its testing services to its still-loss-making volume production testing business and truly assemble the three businesses into a complete profitable closed loop is the suspense left by the prospectus and also the part most worth following in the subsequent inquiry replies.