① Wall Nuclear Materials will end the listing process of the spin-off subsidiary Leting Zhilian, which is mainly engaged in high-speed connectors and other businesses; ② Because Nvidia's new products use copper cable connections, the subsidiary Wall Nuclear Materials, which owns the copper cable business, recently received popularity in the secondary market.
Financial Services Association, March 21 (Reporter Wang Biwei) Tonight, Wall Nuclear Materials (002130.SZ) made a surprise announcement stating that it will terminate the listing process for the spin-off subsidiary Leting Zhilian. Due to the popularity of the “copper cable concept,” Wall Nuclear Materials, which has been in turmoil in the secondary market for a long time, has continued to rise and fall in the past two trading days, reaching the highest stock price since 2021. The main business of Leting Smart Link, which terminated the spin-off this time, is also the main reason why Wall Nuclear Materials has recently been hyped up.
In January of last year, Wall Nuclear Materials announced that it plans to split and list its wire division business entity and holding subsidiary Leting Wire Industry (Huizhou) Co., Ltd. (the predecessor of “Leting Smart Link”) on GEM.
Regarding the reason for the planned spin-off, Wall Nuclear Materials stated at the time: “On the one hand, it is conducive to further optimizing the industry layout of Leting Cable, and on the other hand, it is beneficial to make full use of the direct financing function of the capital market. It also stated that it will not cause the company to lose control of Leting Cable, and it will not have a substantial impact on the continued operation of the company's other business segments.”
Over the past year, this plan has been carried out in an orderly manner, including the announcement in February of last year that plans to reform the shareholding system and establish a limited company as a whole, the March announcement of plans to provide equity incentives to Leting's management and core employees through capital increases and share expansion, and the December announcement to apply for listing on the new Third Board.
So why was the process still progressing normally in December of last year; after 3 months, this apparently “win-win” plan suddenly stopped?
Regarding the reason for the termination of the spin-off, Wall Nuclear Materials only stated in the announcement that it “comprehensively considers changes in the market environment and the operating conditions of the holding subsidiary Leting Zhilian itself to coordinate the business development and capital operation plans of the company and its holding subsidiaries.”
It is worth mentioning that the GB200NVL72 server recently launched by Nvidia uses 5,000 NVLink copper cables (total length over 2 miles). A relevant person in charge of an AI company told the reporter that currently cheaper and faster copper connections are viewed as the future development direction of data centers. As a result, the market is also very enthusiastic about copper cables for servers. After the Nvidia press conference on the 19th, many concept stocks such as Xinya Electronics (605277.SH), Zhaolong Interconnect (300913.SZ), and Wall Nuclear Materials surged.
According to data, Le Tingzhi contacted the main entity in Wall's nuclear copper cable connector business. In June of last year, Wall Nuclear Materials stated on an interactive platform, “The 400G and 800G high-speed communication lines produced by our subsidiary Leting Zhilian are DAC copper cables. In terms of short-distance signal transmission, they have the advantages of low power consumption, high cost performance, high speed, etc., and are widely used in data signal transmission in data centers, servers, switches/industrial routers, etc.”
A capital market lawyer told the reporter that in the process of a company's spin-off and listing, if a business with a high price-earnings ratio is split off and a business with a low price-earnings ratio is left behind, it may have a great impact on the company's market capitalization performance. Under these circumstances, if Le Ting Zhilian successfully spin-off, Wall Nuclear Materials's valuation will also be restructured, which may not be a good thing for the company's small and medium shareholders.