"STAR Daily" November 2 news (Reporter Guo Hui) Fuchuang Precision announced yesterday (November 1) evening in response to the recent fluctuations in the stock price over the past three trading days.

From October 30 to November 1 this year, the cumulative deviation of Fuchuang Precision's closing price over the past three trading days has reached 30%. According to the relevant regulations of the Shanghai Stock Exchange Trading Rules, this constitutes abnormal stock trading volatility.

Fuchuang Precision's stock price trend on November 1st shows that after opening, it continuously oscillated downward, but in the last fifteen minutes of trading after 14:45 in the afternoon, there was a sudden uptick.

Fuchuang Precision responded that there have been no significant changes in the internal and external environments of the company, and the business operation is normal.

Regarding the most concerning issue of the acquisition of 100% equity of Beijing Yisheng Precision Semiconductor Co., Ltd. controlled by the ultimate controlling shareholder, Fuchuang Precision stated that as of the date of this announcement, key elements such as the transaction scheme and price need further negotiation. No agreements have been signed between the parties involved and the company. This transaction also requires necessary decision-making and approval procedures to be carried out by the parties involved, and there are uncertainties in the relevant matters of this transaction.

Fuchuang Precision stated that besides the above matters, the company and the actual controller do not have any other major issues being planned, such as mergers and restructurings, share issuances, debt restructurings, business restructurings, asset divestitures, and asset injections. There are also no other significant undisclosed information that should be disclosed.

Since the announcement of the acquisition plan on July 15th this year, nearly four months have passed, and the above-mentioned acquisition plan remains unsigned on just a piece of paper, surprising some investors.

It is understood that in July this year, Fuchuang Precision announced its intention to acquire 100% equity of Yisheng Precision.

Yisheng Precision is a company that provides non-metallic components consumables based on silicon, silicon carbide, and quartz, as well as metal components consumables based on materials such as aluminum, and also offers maintenance services for core components of wafer fabs. Yisheng Precision has currently obtained advanced process certification from mainstream 12-inch wafer fab customers in China, achieved mass production and delivery, and also has business dealings with Fuchuang Precision.

Another important identity of Yisheng Precision is a offshore company controlled by Chairman Zheng Guangwen of Fuchuang Precision. Zheng Guangwen holds 68.04% of the equity of the target to be acquired. The transaction amount for this acquisition case is expected to be no more than 0.8 billion yuan.

At the mid-year earnings conference of Fuchuang Precision in September this year, Zheng Guangwen answered questions from reporters of the 'Star Market Daily', stating that the acquisition is still under discussion with multiple parties, and the transaction requires further auditing and evaluation, and must still follow the relevant decision-making procedures of the board of directors and shareholders' meeting as required.

Zheng Guangwen stated that Fuchuang Precision is currently focusing on the R&D and manufacturing of metal parts. Through the acquisition of Yisheng Precision, in terms of business synergy, the company will possess a variety of non-metallic semiconductor components, product and technical reserves. It can provide a comprehensive component solution for downstream domestic and foreign semiconductor equipment manufacturers, enhancing overall service capabilities. As a result of this transaction, Fuchuang Precision will be one of the few domestic semiconductor component companies with independent research and development of silicon carbide component materials and product manufacturing capabilities. The company's technical capabilities will be enhanced, and market competitiveness will be further improved.

Since the announcement of the aforementioned acquisition plan, many brokerages such as Everbright Securities, Zheshang Securities, HTSC, and Huaxi Securities mentioned this event in their research reports, mostly taking a neutral and rational stance.

Jiang Gaozhen of Zheshang Securities stated in a research report released in the third quarter of this year that the planned acquisition of Yisheng Precision by Fuchuang Precision could create complementary advantages. 'The investment in new technology, new products, and new production capacity will effectively enhance the company's product supply capabilities and profit levels.'

In September this year, the China Securities Regulatory Commission formulated the '6 Guidelines for Mergers and Acquisitions' for listed companies' industrial integration, indicating strong support for listed companies to transform and upgrade towards new quality productivity, engage in cross-industry mergers and acquisitions based on the goal of transformation and upgrade, and acquire non-profit assets that help to strengthen the chain, enhance the key technology level.

Just yesterday (November 1), the Shanghai Stock Exchange announced that it will compile and organize 30 representative mergers and acquisitions cases in recent years in the Shanghai market, and select 12 cases corresponding to 4 negative types such as "improper insider trading prevention," "financial fraud of target companies," "speculative share price manipulation through hotspots," and "uncontrolled blind cross-border targets," aiming to remind listed companies to establish correct development concepts and be vigilant of related risks in the merger and acquisition process.

The Shanghai Stock Exchange stated that while encouraging listed companies to standardize and effectively implement high-quality mergers and acquisitions, it always maintains a clear regulatory orientation of high attention and strict supervision towards all types of improper mergers and acquisitions transactions that use the name of restructuring but pursue arbitrage in reality.

A senior executive from a top domestic semiconductor equipment company interviewed by the Star Market Daily expressed that for semiconductor equipment companies implementing platform-oriented development, external investment and mergers are excellent paths for expanding multiple product lines.

"Overseas leading semiconductor equipment manufacturers, apart from lithography machines as a special category, have almost all adopted a platform-based model for development. Leading equipment companies overseas have also undergone multiple rounds of mergers to achieve their current scale." The aforementioned source mentioned that for domestic semiconductor equipment and component companies, the current situation is still relatively fragmented, which is not conducive to downstream client validation and procurement. Therefore, in the long run, consolidation and mergers are the major trends.