Introduction: Two companies in the same industry are merging and integrating.

Another 4 companies have announced new merger dynamics.

Last night (November 4), Xidige Micro announced that it is planning to acquire 100% of Chengxin Micro's shares, and the company's stock will be suspended from November 5.

In addition, Beijing Quanshi World Online Network Information, Hexin Instruments, and Shanghai Bright Power Semiconductor Co., Ltd. have disclosed restructuring plans:

Beijing Quanshi World Online Network Information plans to acquire 100% equity of Shanghai Jiatou Internet Technology Group Co., Ltd.; Hexin Instruments plans to acquire controlling stake of Shanghai Liangxi Technology Co., Ltd.; Shanghai Bright Power Semiconductor Co., Ltd. plans to acquire 100% equity of Sichuan Yichong Technology Co., Ltd.

After several companies resumed trading, they all hit the limit up, driving the Wind Restructuring Index up by 3.66%.

Different from the cross-border acquisitions previously followed by Brother Fa, this acquisition by Shanghai Bright Power Semiconductor Co., Ltd. (688368.SH) is an industrial merger with high synergy effects.

According to the acquisition plan, shanghai bright power semiconductor co., ltd. (晶丰明源) intends to purchase 100% equity of sichuan easy charge technology co., ltd. (referred to as "easy charge technology") from 50 trading parties such as Guangzhou Weijunsi, Zhihe Juxin, Jin Juliheti, Zhihe Juede, Zhihe Jucheng through the issuance of shares, convertible bonds, and cash payment, and raise supporting funds.

The target company Easy Charge Technology and the listed company Shanghai Bright Power Semiconductor Co., Ltd. both belong to the field of simulation and mixed signal chip design industry, with high synergy in business between the two parties.

The acquisition plan states that this transaction constitutes a related party transaction and a significant asset restructuring, but does not constitute a restructuring for listing purposes.

1

Shanghai Bright Power Semiconductor Co., Ltd. incurred significant losses after 2022.

Prior to this transaction, the listed company Shanghai Bright Power Semiconductor Co., Ltd. focused on two major sectors of power management chips and control driver chips, with a product matrix covering LED lighting power chips, electric machine control driver chips, AC/DC power chips, and DC/DC power chips in the analog chip industry under the category of power management and control driver chips.

In 2021, 2022, 2023, and January-September 2024, Shanghai Bright Power Semiconductor Co., Ltd. had operating revenues of 2.302 billion yuan, 1.079 billion yuan, 1.303 billion yuan, and 10.88 billion yuan, respectively, with net profits attributable to the parent of 0.677 billion yuan, -0.206 billion yuan, -91.26 million yuan, and -5430.11 million yuan.

In 2022, due to the overall economic impact on the downstream markets where the company operates, there was a decline in demand. In addition, after the semiconductor industry experienced a cyclical capacity shortage in 2021, the upstream capacity tension gradually eased, leading to oversupply compared to demand, resulting in a sharp increase in industry inventory pressure. The company implemented a price reduction strategy to clear the high inventory levels, leading to a shift from profit to loss in the current period.

Key financial indicators of Shanghai Bright Power Semiconductor Co., Ltd., source: acquisition proposal.

The controlling shareholder of Shanghai Bright Power Semiconductor Co., Ltd. is Hu Liqiang, and the actual controllers are Hu Liqiang and Liu Jieqian. Both the controlling rights of the listed company will not change before and after the completion of the acquisition of Easy Charging Technology.

2

Easy Charging Technology and Shanghai Bright Power Semiconductor Co., Ltd. belong to the same industry.

The actual controller of the target company Easy Charging Technology is Mr. Pan Siming. There is no pre-existing relationship between the counterparty and the listed company before the acquisition.

After preliminary calculation, Mr. Pan Siming will collectively hold 5% of the total share capital of the listed company after the successful acquisition. According to the provisions of the "Stock Listing Rules", after this transaction is completed, the main entity controlled by Pan Siming in the counterparty will become an affiliate of the listed company. Therefore, this transaction is preliminarily expected to constitute a related party transaction.

EasyCharge Technology is a high-tech enterprise specializing in the research and development and sales of high-performance analog chips and mixed-signal chips such as wireless charging chips, general charging chips, automotive power management chips, AC/DC power chips, and protocol chips.

From the industry perspective, Easylink Technology and Shanghai Bright Power Semiconductor Co., Ltd. both belong to the field of analog and mixed-signal chip design companies, and they have high synergy in business.

Easylink Technology's products are widely recognized by downstream customers and are ultimately used in products of brands such as Samsung, Honor, Lenovo, Xiaomi, and Mercedes-Benz.

In terms of financial data, Easylink Technology's revenue for the years 2022, 2023, and January to July 2024 were 0.446 billion yuan, 0.651 billion yuan, and 0.59 billion yuan respectively, with net losses of -0.257 billion yuan, -0.485 billion yuan, and -0.77 billion yuan.

Key financial data of the target company, source: Acquisition Proposal

According to the acquisition proposal, Easylink Technology has not been profitable in the past year, with two specific reasons:

1. The semiconductor industry where Easylink Technology operates is a technology-intensive industry requiring significant research and development investment. During the reporting period, the company actively expanded its R&D team, vigorously expanded and upgraded its product lines, with substantial increases in investments in automotive electronics.

2. In order to further establish and improve the company's long-term incentive mechanism, attract and retain outstanding talent, the target company has implemented a significant and extensive stock-based incentive plan for employees, resulting in high share-based payment costs.

However, excluding share-based payment expenses, during the reporting period, Easylink Technology continued to incur losses, with net income of -0.102 billion yuan, -0.094 billion yuan and -0.31 billion yuan respectively.

3

Epilogue

The acquisition announcement stated that Shanghai Bright Power Semiconductor Co., Ltd. will form positive complementary relationships with the target company Easylink Technology in product categories, customer resources, technological accumulation, and supply chain, and by leveraging their respective research and development achievements and industry positions, achieve effective integration in business and technology.

Compared with A-share listed companies in power management and signal chain chip sectors, based on sales volume from January to June 2024, Easylink Technology has already entered the top ten.

After this acquisition is completed, Shanghai Bright Power Semiconductor Co., Ltd.'s combined sales scale is expected to enter the top three. In the wireless charging chip field, Easylink Technology's overall sales volume ranks among the top three globally and leads the world in sales volume of wireless charging chips for non-iOS smartphones.

Top ten revenue scale A-share listed companies in power management and signal chain chip sectors, source: acquisition plan

In addition, Shanghai Bright Power Semiconductor Co., Ltd. believes that this transaction will enhance the listed company's "hard technology" attributes and internationalization level, solidify its market position and technological capabilities in the consumer sector, further strengthen the layout and breakthrough of car-level products, expand the overall sales scale of the listed company, help the listed company grow bigger and stronger, and enhance the listed company's international competitiveness.

As of the date of signing this proposal, the audit and evaluation work related to this transaction has not been completed. All parties confirm that the transaction party intends to make performance commitments and compensation arrangements on the future profitability of the target company of this transaction in the coming years.