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Investments in Privately-Held Raw Material Companies (Tables) | 3 Months Ended
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Mar. 31, 2022
Investments in Privately-Held Raw Material Companies |
Summary of investments | As of March 31, 2022, the investments are summarized below (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Investment Balance as of | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, | ​ | December 31, | ​ | Accounting | ​ | Ownership | *
Company |  | 2022 |  | 2021 |  | Method |  | Percentage | ​
Nanjing JinMei Gallium Co., Ltd. | ​ | $ | 592 | ​ | $ | 592 |  | Consolidated |  | **85.5 | %
ChaoYang JinMei Gallium Co., Ltd. | ​ | ​ | 1,820 | ​ | ​ | 1,820 | ​ | Consolidated | ​ | **85.5 | %
Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd. | ​ |  | 1,346 | ​ |  | 1,346 |  | Consolidated |  | **85.5 | %
ChaoYang XinMei High Purity Semiconductor Materials Co., Ltd. | ​ | ​ | 4,642 | ​ | ​ | 1,814 | ​ | Consolidated |  | ***58.5 | %
​ | ​ | $ | 8,400 | ​ | $ | 5,572 | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Donghai County Dongfang High Purity Electronic Materials Co., Ltd. | ​ | $ | 2,057 | ​ | $ | 2,053 |  | Equity |  | **46 | %
Beijing JiYa Semiconductor Material Co., Ltd. | ​ | ​ | 4,292 | ​ | ​ | 3,760 | ​ | Equity | ​ | 39 | %
Xilingol Tongli Germanium Co., Ltd. | ​ |  | — | ​ |  | — |  | Equity |  | 25 | %
Xiaoyi XingAn Gallium Co., Ltd. | ​ | ​ | 4,739 | ​ | ​ | 4,095 | ​ | Equity | ​ | **25 | %
Emeishan Jia Mei High Purity Metals Co., Ltd. | ​ |  | 224 | ​ |  | 258 |  | Equity |  | 25 | %
​ | ​ | $ | 11,312 | ​ | $ | 10,166 | ​ | ​ | ​ | ​ | ​
​ * These percentages reflect the ownership currently in effect upon the completion of the reorganization in China and the ownership in effect upon the completion of the new capital funding by private equity investors in January 2021. ​ ** In preparation for Tongmei’s application for a listing of shares in an IPO on the STAR Market, in late December 2020 we reorganized our entity structures in China. JinMei and BoYu and its subsidiaries, previously organized under AXT, Inc., were assigned to Tongmei and effectively merged with Tongmei although they retained their own respective legal entity status and are wholly owned subsidiaries of Tongmei. The 33% minority interest stakeholders of BoYu converted their ownership to a 7.59% minority interest in Tongmei. The 8.5% minority interest stakeholders, employees of JinMei, converted their ownership to a 0.38% minority interest in Tongmei. Further, a number of employees, key managers and contributors, purchased a 0.4% minority interest in Tongmei. In 2020, the Investors transferred approximately $48.1 million of new capital to Tongmei. An additional investment of approximately $1.5 million of new capital was funded in early January 2021. Under China regulations these investments must be formally approved by the appropriate government agency and are not deemed to be dilutive until such approval is granted. The government approved the approximately $49 million investment in its entirety on January 25, 2021 at which time the Investors owned a redeemable noncontrolling interest in Tongmei of 7.28%. As of March 31, 2022, Tongmei’s noncontrolling interests and redeemable noncontrolling interests totaled approximately 14.5%. AXT remains the controlling stakeholder of Tongmei and holds a majority of the Board of Director positions of Tongmei. ​ *** In February 2021, Tongmei signed a joint venture agreement with certain investors to fund ChaoYang XinMei.
Summarized equity method income information | AXT’s minority investment entities are not consolidated and are accounted for under the equity method. Excluding one fully impaired entity, the equity investment entities had the following summarized statements of operations information (in thousands) for the three months ended March 31, 2022 and 2021:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ | ​ | March 31, | ​
​ |  | 2022 |  | 2021 |
Net revenue | ​ | $ | 10,734 | ​ | $ | 8,525 | ​
Gross profit | ​ | $ | 5,999 | ​ | $ | 3,807 | ​
Operating income | ​ | $ | 4,149 | ​ | $ | 3,061 | ​
Net income | ​ | $ | 3,698 | ​ | $ | 2,612 | ​

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