Event: the company announced that it intends to acquire Tengxin Precision at a consideration of 630 million yuan by issuing shares and paying cash, and will resume trading on November 12.
1. It is proposed to acquire Tengxin Precision wholly-owned for 630 million yuan to further expand the business of consumer electronics functional devices. According to the company announcement, Zhuoyi Technology plans to purchase 100% equity of Tengxin Precision by issuing shares and paying cash, with a transaction consideration of 630 million yuan. Among them: (1) 472.5 million yuan for additional shares and 157.5 million yuan in cash (2) XIAOMI Science and Technology (Wuhan) and Optical Valley Investment subscribed and raised supporting funds of 50 million yuan and 50 million yuan respectively. This additional issue shares to purchase assets, the additional issue price is 8.2 yuan per share.
After the completion of this transaction, Tengxin Precision will become a subsidiary of Zhuoyi Technology, further expanding the layout of listed companies in the field of consumer electronics functional devices.
two。 Tengxin Precision takes the lead in die-cutting and punching technology for consumer electronics, mastering Apple Inc HOWM and other high-quality customers Tengxin Precision to focus on the business of consumer electronic functional devices, and mastering the process capabilities required for die-cutting, stamping and other consumer electronic functional devices. Domestic competitors include Leiyi Intelligent Manufacturing, new fiber technology, Anjie technology and so on. In the segment field of consumer electronics functional devices, Tengxin has successfully entered the supply chain system of well-known consumer electronics terminal brands such as Apple Inc, Huawei, OPPO, XIAOMI and VIVO, and has entered its supply chain and formed a long-term and stable cooperative relationship with high quality customer resources.
Tengxin Precision has strong profitability and high growth: in 2017, it achieved revenue of 260 million yuan and net profit of 24.43 million yuan (unaudited). From 2018 to 2020, Tengxin Precision shareholders promised to achieve a total net profit of no less than 203 million yuan. Among them, the net profit for 18-20 years is 0.52 million.
3. Large-scale manufacturing strategy, continue to promote intelligent hardware industry innovation and quantum dot display business Zhuoyi technology continues to adhere to the core strategy of large-scale manufacturing, driven by technological innovation, promote the promotion and application of intelligent manufacturing services and solutions, and actively layout new products and customers. Since 2018, the company has continuously promoted the innovation of intelligent hardware industry, carried out in-depth exploration in wearable devices, smart imaging, smart home and other major areas, and successively launched a series of intelligent innovative products and solutions.
In the future, the company will closely follow the development direction of the industry, speed up the accumulation and application of quantum dot technology, actively put the company's related products into the market, and realize the large-scale market application of quantum dot display business.
4. Investment suggestion
In view of the fact that the speed of development of the company's hardware products and quantum dot business is not as fast as expected, we adjust the company's net profit for 18-20 years to RMB 0.67 million (the original value for 18-19 years was RMB 270 million), and according to Tengxin's commitment to test prep performance measurement, the net profit for 18-20 years and test preparation is respectively RMB 1.19 pm / 251 million yuan. We are optimistic about the layout of the company's smart hardware industry chain and the prospect of quantum dot display business, and maintain the "buy rating".
Risk tips: Tengxin precision acquisition failed to complete the risk; smart hardware, quantum dot material development is not as expected; industry competition intensifies, the company's profitability decline risk.