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Financial Associated Press November 11th news (Reporter Chen Kang) As chip performance continues to improve, represented by Nvidia, the demand for heat dissipation and cooling is also increasing. Fluorocarbon cooling liquid is one of the common and popular electronic device cooling liquids. Tonight, Shimao Energy (605028.SH) announced its entry into the electronic fluorinated liquid field through acquisition.

According to the announcement, Shimao Energy is planning to issue shares and pay cash to acquire the controlling rights of Nantong Zhanding Material Technology Co., Ltd. (referred to as 'Zhanding Technology'). It is expected that after the completion of this transaction, Zhanding Technology will become the company's controlling subsidiary.

Zhan Ding Technology's official website shows that the company focuses on the technical development and application of fluorinated fluid and is a technology enterprise specializing in the research and development, manufacturing, and sales of fluorinated electronic chemicals. The company mainly produces fluoroelastomers, fluorinated liquids, and other products, serving high-tech industries such as electronics, semiconductor integrated circuit manufacturing.

Specifically, the fluorinated liquid produced by Zhanding Technology is the best material for unidirectional heat transfer applications in the semiconductor manufacturing industry, such as etchers, ion implanters, testers, and others. Other uses include heat transfer in data centers, high-performance computing, electrical utilities, and aviation electronics.

In January this year, Zhan Ding Technology announced its investment of 0.2 billion yuan in the construction of a semiconductor fluorinated cooling liquid research and production project. After completion, the project will have an annual production capacity of 1500 tons/year of fluoroelastomer pre-mix and 2500 tons/year of electronic fluorinated liquid.

It is worth noting that chemical giant 3M has announced that it will exit the business of fluoropolymers, fluorinated liquids, and additives based on perfluoro and polyfluoroalkyl substances (PFAS) by the end of 2025, leaving market space for corresponding domestic companies. Currently, companies involved in such cooling liquid products include Zhejiang Zhongxin Fluoride Materials (002915.SZ), Shenzhen Capchem Technology (300037.SH), Zhejiang Juhua (600160.SH), Zhejiang Sanmei Chemical Industry (603379.SH), Yonghe Shares (605020.SH), China Kings Resources Group (603505.SH) etc.

In the current liquid cooling technology, it is divided into 'cold plate liquid cooling', 'spray liquid cooling', and 'immersion liquid cooling', among which the immersion liquid cooling mainly uses electronic fluoride liquid as the cooling medium. At the NVIDIA 2024 GTC conference on March 19, NVIDIA CEO Huang Renxun released higher performance GPU chips - the B200 based on the Blackwell architecture and the super chip GB200, as well as server systems. Due to the high power consumption, the combination of immersion liquid cooling and cold plate liquid cooling they adopted has become the standard heat dissipation method for the system.

Shimao Energy stated that on November 10, 2024, it jointly signed an 'Equity Transfer Intention Agreement' with the major shareholder, Shanghai Dongfuyuan Enterprise Development Center (Limited Partnership), and Shanghai Xuyin Zhanding Enterprise Development Center (Limited Partnership), agreeing to purchase not less than 58.07% equity assets of Zhanding Technology with the issuance of shares and payment of cash. The acquisition is based on a maximum valuation of Zhanding Technology not exceeding 1.2 billion yuan. The final acquisition ratio and specific acquisition price will be determined through due diligence, audit, and evaluation procedures by both parties, and will be clearly stated in the formal equity transfer agreement.

As the valuation and pricing of Zhanding Technology have not been finally determined, this transaction may constitute a significant asset restructuring as defined in the 'Administration Measures for Major Asset Restructuring of Listed Companies.' Shimao Energy has been suspended from trading since the market opened today, and the suspension period is expected not to exceed 10 trading days (cumulative).

Public information shows that Shimao Energy is a thermal power cogeneration enterprise mainly using household garbage and coal as the main raw materials. Its main products are steam and electricity, providing industrial steam to customers for power generation and grid connection.