International Electronic Business News on the 5th On the evening of September 4, Xinlian Integration released an acquisition draft, planning to acquire 72.33% of Xinlian Yuezhou at a price of 5.897 billion yuan, thereby fully controlling Xinlian Yuezhou. As the A-share M&A market remains thin this year, this transaction became the largest semiconductor transaction for A-shares this year.
According to the data, Xinlian Integration is a leading enterprise in the manufacturing of high-end power semiconductors and MEMS (microelectromechanical systems) in China. In November 2023, it was changed from “Shaoxing SMIC Integrated Circuit Manufacturing Co., Ltd.” to “Xinlian Integrated Circuit Manufacturing Co., Ltd. company”. (Click to review)
Xinlian Yuezhou is the main implementation entity of Xinlian Integrated Phase II wafer manufacturing project, with a silicon-based production capacity of approximately 70,000 pieces/month. It also proactively lays out silicon carbide MOSFET (metal oxide semiconductor field effect transistor), VCSELGaAs (arsenic R&D and production capabilities of higher technology platforms such as gallium vertical cavity surface emitting lasers) and high-voltage analog ICs.
According to the announcement, the transaction price of assets corresponding to 72.33% of Xinlian Yuezhou’s shares was 5.897 billion yuan.
The specific transaction plan for the acquisition is that Xinlian Integration will pay 5.307 billion yuan in the form of issuance of shares, accounting for 90% of the total transaction consideration, and the remaining 590 million yuan will be paid in cash, accounting for 10% of the total transaction consideration.
The issuance plan shows that Xinlian Integration intends to issue approximately 1.314 billion shares, accounting for 15.70% of the total share capital of the listed company after the issuance. The issue price is 4.04 yuan per share. The price is not lower than the listing price 20 trading days before the pricing base date. The average trading price of the company’s stock.
According to Xinlian Integration, this acquisition will help Xinlian Integration concentrate its superior resources to promote the rapid development of the two major product lines of silicon carbide and analog IC. After the acquisition is completed, it will achieve unified management of 8-inch silicon-based production capacity, which will promote in-depth integration of internal management, process platforms, customized designs, supply chains, etc., simplify management processes, and improve operational efficiency.
It is worth mentioning that despite the huge investment, Xinlian Integration has not set performance commitments for Xinlian Yuezhou, and in 2023, Xinlian Yuezhou lost 1.116 billion yuan.
Judging from the financial data in 2022 and 2023, Xinlian Yuezhou’s operating income has increased but its losses have expanded. In the past two years, the company’s revenue increased from 137 million yuan to 1.56 billion yuan, but the net profit attributable to the parent company expanded from -700 million yuan to -1.116 billion yuan.
Xinlian Integration stated that although Xinlian Yuezhou is still in a state of loss caused by high depreciation and high R&D investment, with the increase in Xinlian Yuezhou’s business volume, the continuous optimization of product structure, and the gradual end of the depreciation period of machinery and equipment , is expected to improve profitability and become one of the important sources of profit for listed companies in the future. In the long run, this transaction will help improve the asset quality of listed companies and optimize the financial status of listed companies.
Post time: Sep-06-2024
