Another semiconductor acquisition on the STAR Market Daily on October 21st.

Tonight (October 21st), Shanghai Bright Power Semiconductor Co., Ltd. released the financial report for the third quarter of 2024 and announced a major asset restructuring and trading suspension.

Intending to acquire Sichuan Yichong, a target that had previously raised funds 15 times.

As an established analog chip manufacturer, Shanghai Bright Power Semiconductor Co., Ltd. has enriched its product line through internal and external expansion, making it a key part of capturing market opportunities in recent years.

Also tonight (October 21st), Shanghai Bright Power Semiconductor Co., Ltd. announced plans to acquire the controlling rights of Sichuan Yichong Technology Co., Ltd. (referred to as 'Sichuan Yichong') through issuing shares, issuing convertible corporate bonds, and paying in cash, while planning to raise supporting funds.

Preliminary calculations indicate that this transaction is expected to constitute a major asset restructuring as defined in the 'Measures for the Administration of Major Asset Restructuring of Listed Companies'. Shanghai Bright Power Semiconductor Co., Ltd. announced that trading will be suspended from tomorrow (i.e., October 22nd) and is expected to last no more than 5 trading days.

Specific transaction methods, transaction plans, and other details of this deal are not yet disclosed. The announcement shows that the counterparty of this transaction includes the top three shareholders of Sichuan Yichong, and an 'Equity Acquisition Intention Agreement' was signed today.

Sichuan Yichong was established in February 2016, headquartered in Sichuan, is a wireless charging chip and solution service provider, with main products being wireless charging chips and smart hardware. It is understood that the founding team of the company is mainly from Tsinghua University overseas returnees, with the core team coming from international companies in Europe and America.

Among them, Pan Siming, Chairman and General Manager of Sichuan Yichong, is a post-85 entrepreneur, graduated from Tsinghua University with a bachelor's degree, and obtained a master's and doctoral degree from Missouri University of Science and Technology. He is a senior member of IEEE and a national youth distinguished expert, specializing in power electronics design, electromagnetic compatibility, and high-speed system design, and has worked at Cisco, Apple, and other companies.

The main customers of Sichuan Yichong include many well-known companies from Europe, America, Japan, South Korea, and China. Its wireless charging solutions have been adopted by Toyota Motor, Google, Microsoft, Sony, Zebo, Haier, and other companies.

In the consumer sector, Sichuan Yichong products have received comprehensive large-scale shipments from global major customers. In the automotive sector, multiple products had already completed automotive-grade certification before 2022, introduced into multiple vehicle models, and developed new high-end products in sync with car manufacturers and Tier 1.

According to Cailian Media's venture capital data, from 2016 to the present, Sichuan Yichong has undergone 15 rounds of financing. The F+ round of financing completed at the end of 2023 included investment from DeepVC, Weihao Chip, Jianxin Investment, Shenzhen Capital, Geely Holding, among others; while the F round of financing completed in mid-2023 gathered capital from SAIC Motor Corporation, Shangqi Capital, CICC Capital, Nio Capital, and other investors.

Shanghai Bright Power Semiconductor Co., Ltd. stated that the transaction is currently in the planning stage, with the formal transaction agreement not yet signed by all parties. The specific transaction plan is still under discussion, with significant uncertainties. This transaction also requires approval from the company's board of directors, shareholders' meeting, and regulatory authorities.

Net income loss expanded month-on-month.

Shanghai Bright Power Semiconductor Co., Ltd. has had previous merger and acquisition cases.

In April 2023, Shanghai Bright Power Semiconductor Co., Ltd. completed the acquisition of 61.61% equity of Nanjing Lingou Chuangxin. It is understood that Lingou Chuangxin focuses on the field of motor control, with its core product being MCU, targeting the terminal markets of electric vehicles, household appliances, industrial control, etc. Through the acquisition of Lingou Chuangxin, Shanghai Bright Power Semiconductor Co., Ltd. expanded its technical capabilities in the field of motor control chips and enlarged its product portfolio.

The financial report disclosed by Shanghai Bright Power Semiconductor Co., Ltd. shows that in the third quarter of this year, the company's sales revenue from motor control driver chips was 0.076 billion yuan, accounting for 21.53% of total revenue. In addition, in Q3, share-based payment expenses amounted to 0.014 billion yuan, which had a certain impact on the net profit data for the third quarter. At the same time, in the third quarter of last year, due to the expectation of not achieving performance targets, share-based payment expenses of 0.176 billion yuan were reversed.

Regarding gross margin, Shanghai Bright Power Semiconductor Co., Ltd.'s comprehensive gross margin for its main business in Q3 was 37.52%, an increase of 13.58 percentage points over the same period last year. Shanghai Bright Power Semiconductor Co., Ltd. stated that the increase in gross margin was due to mature market product technology iterations, the increase in the proportion of higher gross margin "second curve" income, and multiple factors such as the decrease in supply chain costs.

Looking at the products, in the third quarter of this year, Shanghai Bright Power Semiconductor Co., Ltd. achieved sales revenue of 0.199 billion yuan for LED lighting power chips, 0.064 billion yuan for AC/DC power chips, 0.076 billion yuan for motor control driver chips, and 0.014 billion yuan for DC/DC power chips.

On the Shanghai Bright Power Semiconductor Co., Ltd. side, the company expressed that while solidifying its market share in LED lighting power chip market, it is also actively developing the second growth curve, continuously enhancing the proportion of AC/DC power chips, motor control driver chips in the overall business; meanwhile, based on the successful mass production of the 40V BCD process platform, it is gradually increasing sales revenue of DC/DC power chips.

In September this year, Shanghai Bright Power Semiconductor Co., Ltd. stated during an institutional research visit that the decline in lighting product prices this year is mainly due to multiple factors such as the slow recovery of the market environment, changes in industry competition landscape, etc. Overall, product prices will follow the market, and future trends will continue to be influenced by market supply-demand fluctuations, as well as considerations of certain production costs and profit margins.

Shanghai Bright Power Semiconductor Co., Ltd.'s AC/DC power chip products have successively made breakthroughs in various segmented markets and are in a phase of rapid volume increase. In the first half of this year, breakthroughs or progress have been made in power segment products of major household appliance brands, small appliance customers, and domestic brand mobile phone manufacturers. In addition, its DC/DC power chip products have entered the market promotion stage, and have already obtained certification from two well-known foreign main chip manufacturers and multiple domestic main chip manufacturers, achieving mass production in the fields of AIC, PC, servers, etc.

The third quarter financial report of Shanghai Bright Power Semiconductor Co., Ltd. shows that the company achieved revenue of 0.353 billion yuan in Q3, an increase of 17.51% year-on-year, but a slight decrease compared to the 0.416 billion yuan in Q2; as for the net profit attributable to shareholders, in the third quarter it was -23.79 million yuan, turning from profit to loss compared to the same period last year, a decrease of 143.82%, and an increase in losses compared to the second quarter of this year.