Incident: The company announced that it plans to acquire 79.31% of Shanghai McGowan Microelectronics shares in cash, with a purchase consideration of 793 million yuan and an assessed value of all shareholders' equity of 1 billion yuan.
McGowan is an important domestic enterprise in the field of magnetic sensor chips. McGowan was founded in 2009. Its main products include magnetic switch position detection chips, magnetic current/linear position detection chips, magnetic coding chips, magnetic sensors and related modules. The products are widely used in consumer electronics, industry, and new energy vehicles. McGowan has established a leading market share advantage in segments such as magnetic coding and magnetic switches.
Performance commitment goals demonstrate confidence in development. The performance commitment clause of the “Share Transfer Agreement” stipulates that the transferor promised net profit of the target company in 2024/2025/2026 was 3912/5154/75.68 million yuan, respectively, and the assessed value of all shareholders' equity corresponding to this acquisition is 26/19/13×PE. In 2022/2023, McGowan's revenue was 269/300 million yuan, and net profit was 285.934/18.883 million yuan. Committed goals demonstrate management's confidence in future development.
It is expected to complement the company's product line and enrich the accumulation of IP. After the acquisition is completed, the company's product range in the field of magnetic sensors is expected to be further enriched, enhancing the company's competitiveness, sales scale and market share in the field of magnetic sensors. At the same time, McGowan has rich R&D experience in the field of magnetic sensors. The core team comes from leading sensor and semiconductor companies such as Honeywell, MaxLinear, and Marvell, and has rich technical reserves. It is expected to further improve the company's magnetic sensor IP accumulation and further expand the company's magnetic sensor product categories and market applications in the automotive and pan-energy fields.
The synergy between the market and the industrial chain is also expected to be strengthened. McGowan has accumulated a broad customer base in the fields of downstream automotive electronics, consumer electronics and industrial drives. Combined with the company's existing product categories, it can achieve more competitive solutions around customer needs, further enhancing the company's brand coverage and market share. At the same time, McGowan's main foundry and testing service providers overlap with the company's main suppliers. After the completion of this merger and acquisition, it is also expected to strengthen supply chain procurement collaboration, exert scale effects, and enhance the company's bargaining power with upstream suppliers.
Investment advice: We expect the company's revenue for 2024/2025/2026 to be 20.32/27.76/3.447 billion yuan, and net profit to mother - 1.53/0.88/249 million yuan. Corresponding to 2025/2026 PE was 191.39/67.32 times, respectively, maintaining the “gain” rating.
Risk warning: Industry demand falls short of expectations; new product development falls short of expectations; industry competition intensifies; mergers and acquisitions fall short of expectations.