Caixin Media News on November 12th (edited by Zhang Liang, intern editor Sun Pengpeng) - Against the background of mergers and acquisitions, Wingtech Technology (600745.SH) has attracted attention due to its overall profit situation and shareholder reduction actions. Since the beginning of the year, Wingtech Technology's revenue has been on a quarterly upward trend, with Q3 quarterly revenue approaching 20 billion, reaching a historical high for the same period. Its convertible bonds have shown good growth, with each unit of 'Wingtech Convertible Bonds' quoting at 121.64 yuan as of the close on November 11th, a 54% cumulative increase from the year's low point of 78.875 yuan on August 26th.

However, the company's shareholder reduction plan has caused stock price fluctuations, and its subsequent profit capability is also a market concern.

Public information shows that Wingtech Technology is a semiconductor and product integration enterprise integrating research, design, production, and manufacturing. It mainly provides global customers with semiconductor power devices, analog chip research and design, wafer manufacturing, packaging testing; as well as terminal product research and manufacturing services for mobile phones, tablets, laptops, AIoT, autos, and other consumer electronic products.

Financial reports show that the company's semiconductor business achieved a net profit of 0.56 billion yuan in the second quarter, which increased to 0.666 billion yuan in the third quarter. However, the product integration business incurred a net loss of 0.5 billion yuan in the second quarter, which narrowed to 0.357 billion yuan in the third quarter. Overall, in the third quarter, the net profit attributable to the shareholders of the listed company was 0.274 billion yuan, turning from a loss to a profit compared to the second quarter, showing significant improvement.

The improvement in profits in the third quarter drove up the price of the company's convertible bonds. As of the close on November 11th, each unit of 'Wingtech Convertible Bonds' quoted at 121.64 yuan, a 54% cumulative increase from the year's low point of 78.875 yuan on August 26th.

In terms of assets and liabilities, as of the end of the third quarter of 2024, Wingtech Technology had total assets of 7.8136 million yuan, total liabilities of 4.0092 million yuan, with an asset-liability ratio of 51.31%. Of this, current liabilities were 2.7277 million yuan, mainly accounts payable and notes payable totaling 1.578 million yuan. The company's cash ratio was 0.32 times.

Zhongtai International stated in its related research reports that the semiconductor industry showed signs of recovery in the third quarter of 2023, but the extent of the recovery in end demand still has certain uncertainties. Thanks to the rapid development of auto electronics, the global power discrete devices industry market has been performing well, and attention still needs to be paid to the impact of the recovery of demand in the industry chain for industrial and consumer electronics. Currently, there is still a gap between domestic manufacturers and global advanced manufacturers in terms of technological level, but the broad domestic market and policy environment bring opportunities for enterprise development.

However, compared to the first three quarters of last year, the decline in net income of Wingtech Technology is more significant. The quarterly report shows that in the first three quarters of this year, Wingtech Technology's revenue increased by 19.7% year-on-year to 53.161 billion yuan, but the net income attributable to the mother decreased by 80.26% year-on-year to 0.415 billion yuan.

Shareholding Reduction by Shareholders

Since the beginning of this year, Wingtech Technology has had two shareholders disclose reduction in shareholding announcements. The announcement shows that on September 30, Zhuhai Ronlon Shareholder Investment Partnership Enterprise (referred to as "Zhuhai Ronlon"), a company shareholder, plans to conduct a centralized competitive reduction of not more than 12.4281 million shares, accounting for about 1% of the company's total share capital. On October 8, the company announced the addition of Zhuhai Gree Electric Appliances Co., Ltd. (referred to as "Gree Electric Appliances") as the entity implementing the reduction, with Gree Electric Appliances being the controlling shareholder of Zhuhai Ronlon.

It is understood that Gree Electric Appliances' investment in Wingtech Technology began in 2018. Through participating in the acquisition of ANSE Semiconductor, Zhuhai Ronlon and Gree Electric Appliances formed concerted action and became Wingtech Technology's third largest shareholder. With Gree's assistance, Wingtech Technology successfully acquired ANSE Semiconductor that year.

It is worth noting that in March this year, Wingtech Technology announced that the second largest shareholder, Wuxi Guolian Integrated Circuit Investment Center (referred to as "Wuxi Guolian"), decided to reduce the company's holdings by 12.42 million shares by July 9. However, by the end of the specified reduction period, Wuxi Guolian had not carried out the reduction operation.

In terms of outstanding bonds, according to Caifinance, Wingtech Technology currently has one outstanding bond named "Wingtech Convertible Bonds", with a current balance of 8.6 billion yuan. These convertible bonds will mature within three years.

In June of this year, China Chengxin International downgraded the credit rating of "Wingtech Convertible Bonds" from AA+ to AA. The downgrade reasons include the stagnation of the company's optical business, obstacles in product diversification, industry chain extension leading to asset impairment and disposal losses; the risk of failed conversion of convertible bonds due to persistently low stock prices, as well as risks associated with shareholder equity pledging.