Shenzhen Minde Electronics Technology announced that it plans to use its own funds to participate in the auction of 4.9180% equity stake in Guanxin Microelectronics held by Lishui Green Fund, with a starting price of RMB 35.5 million. Guanxin Microelectronics was founded just three years ago, with a latest post-investment valuation of RMB 0.61 billion. Its revenue and net income from January to July 2024 were RMB 3.02 million and -87.56 million respectively.
Zhejiang Lishui State-owned Assets will auction the equity of a wafer factory.
On the evening of November 14th, Shenzhen Minde Electronics Technology announced its intention to use its own funds to participate in the auction of 4.9180% equity stake of Zhejiang Guanxin Microelectronics Co., Ltd., held by Lishui Green Industry Development Fund (referred to as 'Lishui Green Fund'), with a starting price of RMB 35.5 million. The actual price is subject to the final auction price.
If the transaction is successfully implemented, Shenzhen Minde Electronics Technology will hold 50.1% of the shares of Guanxin Microelectronics, making it a controlling subsidiary of the listed company and included in the company's consolidated financial statements.
It is understood that the above merger plan has been approved by the board of directors of Shenzhen Minde Electronics Technology and still requires approval from the shareholders' meeting.
Lishui Green Fund is an investment fund with Lishui State-owned background. Its controlling shareholder is Lishui Gaokai Financial Investment Holdings Co., Ltd., holding a stake of 62.65%. At the same time, Lishui Nancheng New Area Investment Development Co., Ltd. and Lishui Financial Investment Holdings Co., Ltd. respectively hold 37.32% and 0.03% of the shares of Lishui Green Fund. Among them, the actual controller of Lishui Gaokai Financial Investment Holdings Co., Ltd. is the Lishui Economic and Technological Development Zone Management Committee.
Previously, Shenzhen Minde Electronics Technology had twice acquired a total of 10.75% stake in Guanxin Microelectronics through equity transfer, from Lishui Green Fund and another state-owned institution, Lishui High-Quality Fund, in January and April of this year.
Guanxin Microelectronics was founded in October 2021 and has just completed three years since its establishment. Its current chairman is Xie Gang. Guanxin Microelectronics' main business is high-end specialty semiconductor wafer foundry service, with a planned annual output of 1.2 million 6-inch silicon-based wafer foundry production capacity in the first phase.
According to the announcement, GigaDevice currently has more than 350 employees and is in the ramp-up phase of mass production, with production and sales volume rapidly increasing. GigaDevice's mass-produced products include a full range of 45V-150V MOS field-effect diodes, 200V-2000V full range of high-voltage / ultra high voltage VDMOS, and high-voltage BCD products are undergoing engineering batch flow slicing.
GigaDevice's latest post-investment valuation is 0.61 billion yuan, while the total planned investment of GigaDevice's project is 2.4 billion yuan.
In July 2022, Lishui Green Fund increased its investment in GigaDevice by 90 million yuan based on a pre-investment valuation of 0.43 billion yuan, holding 17.3077% equity stake in GigaDevice after the capital increase. In December 2022, Lishui High-Quality Fund increased its investment in GigaDevice by 90 million yuan based on a pre-investment valuation of 0.52 billion yuan, resulting in a post-investment valuation of 0.61 billion yuan; after the increase, both Lishui Green Fund and Lishui High-Quality Fund hold 14.7541% equity stake in GigaDevice.
The price for Mindray Electronic's acquisition of 4.9180% equity stake in GigaDevice refers to the post-investment valuation at the time of the previous capital increase plus a certain annualized return, as well as the starting bid price determined by the evaluation institution commissioned by the controlling shareholder of Lishui Green Fund after evaluating GigaDevice.
The announcement shows that in 2023, GigaDevice's annual revenue was 0.0504 million yuan. From January to July 2024, its revenue was 3.02 million yuan; the net income was -87.56 million yuan.
Mindray Electronics stated that GigaDevice has been in the capacity improvement phase since the end of 2023 when mass production began. Due to significant upfront fixed asset investments for the project, high depreciation and amortization amounts, GigaDevice is still in the loss phase. With the continuous increase in GigaDevice's production and sales volume, as well as the favorable development prospects in the domestic power semiconductor market and the trend of import substitution, GigaDevice will contribute to stable operating cash flow for the company in the future.
"After this transaction is completed, the upstream wafer foundry process will be integrated into the listed company's business system, and the cooperative relationship with GigaDevice, a power semiconductor design enterprise of the company's controlling subsidiary Guangwei Integrated, will be further deepened. GigaDevice will provide greater support to Guangwei Integrated in new product development efficiency, capacity assurance, and other aspects." Mindray Electronics mentioned.
