Incident: On November 29, the company announced a takeover. It plans to acquire 67% of Ellipsiz's shares in Axis-tec, which is owned by its wholly-owned subsidiary, Vincent and Mr. Low, with a transaction consideration of 20.73 million yuan.

Axis-tec's business and development history: Established in 2004, the company is Singapore's leading supplier of silicon wafer-level testing equipment and optoelectronic coupling equipment. Its products are mainly used in lasers, optics and other industries, serving major Asian multinational companies, B2B electronics, consumer electronics, semiconductors and research institutions; in October 2019, 51% of the company's shares were acquired by Ellipsiz (agency) in Singapore (cost 3.6 million US dollars). Ellipsiz helped it open up sales channels and increase popularity; In November 2024, 67% of the company's shares will be acquired by Oatmeal Technology (at a price of 20.73 million yuan).

Axis-tec shareholder status: Ellipsiz holds 51% of Axis-tec's shares, and Ellipsiz's main business includes electronic distribution and service solutions (DSS) and automated precision system solutions (APSS); Mr. Vincent holds 40% of Axis-tec's shares and is the founder of the company. He is currently the company's executive director and has more than 30 years of expertise in silicon photonics testing, precision engineering, and optical automation; Mr. Low holds 9% of the company's shares. As the company's general manager, he has over 20 years of experience in the semiconductor, laser, and photonics industries.

It is expected that after the completion of the acquisition, Axis-tec's shareholders will include Singapore Oats (67%), Vincent (27%), and Low (6%).

Axis-tec's performance situation: In 2023, the company's revenue was 26.38 million yuan, net profit was -3.26 million yuan, 2024H1's revenue was 18.67 million yuan, net profit was 0.1535 million yuan, and the net interest rate was 0.8%, turning a loss into a profit compared to 2023.

Axis-Tec's main partner: Axis-Tec and AMF are jointly developing silicon optical wafer level testing systems and methods. AMF is a leading commercial pure silicon optical product foundry in Singapore. The solution will use Axis-Tec's test devices and systems such as probes and other test devices and systems, and AMF will manufacture wafers. The solution will help reduce test time, reduce costs and increase efficiency.

Axis-tec will help Oats create new performance growth points. As an emerging technology, silicon optical technology has characteristics such as high speed, high integration, low cost, low power consumption, and miniaturization. It has begun to be widely used in various fields such as optical communication, optical sensing, optical computing, intelligent driving, and consumer electronics, and the market prospects are broad. Axis-tec's cutting-edge silicon light technology and products are expected to complement oat technology, help the company accelerate its entry into the field of silicon light equipment, and form a new performance growth point.

The rating was raised to “buy”: the company's main business, soft board testing, is expected to benefit from AI iPhone innovation opportunities, and its performance will continue to increase. The new business semiconductor test equipment will further enhance its performance. At the same time, the company laid out a silicon optical equipment circuit through the acquisition of Axis-tec, forming a new performance growth point. The company's revenue for 2024-2026 is estimated to be 0.48, 0.67, and 0.83 billion yuan, respectively, and net profit to mother is 89.22 million yuan, 0.17 billion yuan, and 0.19 billion yuan, respectively. On November 29, 2024, the corresponding PE price (34.99 yuan) was 57, 31, and 27X, respectively. We expect Oat Technology's acquisition of Axis-tec to help boost its market value, so we upgraded the company's rating to a “buy.”

Risk warning: risks such as industry prosperity falling short of expectations, new business expansion falling short of expectations, and increased market competition