On August 31st, Jinghua Micro announced that it had dismissed Director Luo Weishao from the company's board of directors and the audit committee. The day before, on August 29th, Luo Weishao expressed opposition to the review of Jinghua Micro's 2024 semi-annual report and its abstract at the board meeting.

On the evening of August 30th, the Shanghai Stock Exchange issued a regulatory work letter regarding the dissenting matters of the directors in the semi-annual report of Hangzhou Jinghua Microelectronics Co., Ltd., including Jinghua Micro, the members of the board and supervisory board, the controlling shareholder and the actual controller, and the intermediary institutions and their related personnel.

Former Director, after expressing opposition to the financial report review, was "dismissed", but still remains a core technical personnel.

According to the announcement, Luo Weishao expressed his opinions on the proposal for the review of the 2024 semi-annual report and its abstract at the board meeting held on August 29th, believing that Jinghua Micro had omissions in its compilation, such as failure to timely disclose risks related to arbitration/litigation initiated by departing employees, land acquisition progress, regulatory matters, and other matters.

Jinghua Micro stated that the questioning raised by Luo Weishao, which was not disclosed in the semi-annual report, would not affect the quality of the disclosure. Jinghua Micro provided responses and explanations in the announcement.

In 2024, based on its strategic planning, product direction, and market environment, Jinghua Micro gradually adjusted and optimized its personnel structure. In the first half of the year, a total of 16 employees left the company for the aforementioned reasons. Luo Weishao believes that Jinghua Micro may face the risk of labor arbitration/litigation initiated by employees who left in the first half of the year and should disclose it in the semi-annual report.

Jinghua Micro stated that the company strictly complies with relevant labor laws and regulations, actively negotiates and communicates, and implements corresponding compensation amounts. As of the date of the announcement, Jinghua Micro has not received any labor arbitration or legal proceedings from departing employees. If there are any related matters in the future, Jinghua Micro will strictly fulfill its information disclosure obligations in accordance with relevant laws and regulations.

Regarding the progress of the company's pre-communication and land acquisition, Jinhua Micro said that the company did communicate with government departments to understand the matters of office land, but due to market changes and other factors, as of the date of this announcement, no substantial agreement has been reached, reaching the point of information disclosure.

In addition, regarding the regulatory warning letter issued by the Zhejiang Regulatory Bureau of the China Securities Regulatory Commission to Jinhua Micro in October 2023, Jinhua Micro has timely fulfilled its information disclosure obligations.

On August 30th, the board of directors of Jinhua Micro voted to remove Luo Weishao from his related positions in the company. The reason is that Luo Weishao has settled overseas and has reached retirement age, making it impossible for him to ensure that he has sufficient time and energy to effectively perform his duties as a director, and he falls short in terms of diligence and duty.

Luo Weishao also voted against the resolution to remove him. Luo Weishao believes that the board of directors' decision to remove him is related to his failure to sign written confirmation opinions and other documents for financial report deliberation.

It is understood that before Luo Weishao was removed from his positions as a director and a member of the audit committee of Jinhua Micro, in December 2023, Luo Weishao's position as the General Manager of Jinhua Micro was also replaced by Liang Guiwu, the Deputy General Manager of the company.

Liang Guiwu, born in 1979, is a Chinese Hong Kong citizen. He previously served as a business manager at Howe Technology Co., Ltd. and a client manager at First Science Electronics Co., Ltd. He joined Jinhua Micro as the Business Director in 2020. Since December 2020, he has been a director and the Deputy General Manager of the company. The announcement shows that Liang Guiwu has no affiliation with Jinhua Micro's major shareholder, controlling shareholder, other shareholders holding more than 5% of the company's shares, or the board and senior management.

It is understood that after Luo Weishao was removed from his position as a director, he is still an employee of Jinhua Micro and also one of the company's core technical personnel.

Party recalls the past: A loyal veteran of the company for 20 years

Jinghua Wei was established in 2005 with an investment of $0.7 million from Hanquan Lu. Hanquan Lu, the chairman of the company, Lu Weishao, the former director, and many other key members, are the first generation entrepreneurs of Jinghua Wei.

According to the prospectus, Hanquan Lu, as the chairman, had long been without receiving compensation from Jinghua Wei. According to reporters from the "Star Daily", Hanquan Lu also rarely directly participates in the company's business.

When Lu Weishao, the company's general manager, was interviewed by a reporter from the "Star Daily" last year, he gave a detailed introduction to his division of labor with the chairman. It is said that for more than ten years, Hanquan Lu has played the role of the final decision maker on company matters and has been involved in corporate governance.

Hanquan Lu is from Hong Kong, China, and has many assets. He also serves as a director of many mainland Chinese companies, such as Shanghai Eloge Electronic Technology Co., Ltd., Beijing Yihao Technology Co., Ltd., and Hangzhou Hengnuo Industrial Co., Ltd., as well as several other local companies in Hangzhou. Therefore, the proportion of Hanquan Lu's assets in Jinghua Wei before it went public is not high.

However, the combined shareholding of Hanquan Lu and Luo Luo, the couple, has a decisive voting right on Jinghua Wei. After Jinghua Wei's IPO, Hanquan Lu directly owns 43.27% of the company's shares, and controls 6.82% of the company's shares through Jingning Jingyin Hua. Luo Luo directly owns 10.76% of the company's shares. The total shareholding ratio is 60.85%.

Lu Weishao and Luo Luo are siblings, and they, together with Hanquan Lu, are concerted actors controlling 67.61% of the company's shares. During the reporting period of Jinghua Wei's IPO, Lu Weishao's contribution amount or shareholding ratio in several changes to the equity structure did not exceed 10%. According to the half-year report of 2024, Lu Weishao's shareholding ratio is 6.76%.

After Jinghua Wei was established, Lu Weishao contributed more to the company's operations, research and development, and other work. According to the company, Lu Weishao's main contribution is to coordinate Jinghua Wei's overall research and development work, formulate the company's research and development goals and plans, and participate in the company's technical research and development challenges and related business expansion.

Lu Weishao once recalled to a reporter from the "Star Daily" his experience of returning to China to start a business. Due to a scarcity of talent, he personally trained employees who had just graduated and joined the company in the morning, and worked on projects in the afternoon. Before the company went public, Lu Weishao recruited many technical talents who were interested in starting their own businesses outside to improve the company's technical team.

Luo Weishao was born in 1956 and is 68 years old this year. He is an American citizen and graduated from the University of Washington in the United States with a doctoral degree in electrical engineering. In his career of more than 30 years in the field of low-power, low-noise analog and mixed-signal integrated circuit design, he has mainly engaged in technical work and has worked for well-known companies such as Honeywell, Motorola, and Medtronic. He returned to China in 2004 and served as the General Manager of Jinhua Microelectronics, which he co-founded, in 2005.

Luo Weishao's approach to corporate governance is pragmatic. He also stated that his management style for the company is to focus on being frugal, even though the company has sufficient funds in the later stage of development, with a majority being allocated to the "cutting edge" of technology research and development.

Under Luo Weishao's pragmatic and rigorous management strategy, Jinhua Microelectronics had been steadily developing before 2020. It wasn't until 2020 when there was an explosive demand for infrared temperature measurement chips in the domestic market that the company entered a broader public view. After a successful listing in 2022, the company's performance fluctuated due to the alleviation of various previous supply shortages.

In the first half of 2024, due to intensified competition in the domestic semiconductor industry and adjustments in product prices, Jinhua Microelectronics' revenue decreased by 7.34% compared to the previous year, reaching 60.16 million yuan, and its net income attributable to shareholders turned from profit to loss. Currently, the total market value of Jinhua Microelectronics is 1.67 billion yuan, and the latest closing price on the last trading day dropped over 60% from its historical high.