China Securities Co., Ltd. reported on November 14 (Reporter Wang Biwei) that Shenzhen Yitoa Intelligent Control (300131.SZ), which primarily focuses on chip distribution, has drawn significant attention from capital markets due to an acquisition announcement made this evening. Shenzhen Yitoa intends to acquire control of Shenzhen Aixin Technology Co., Ltd. (hereinafter referred to as 'Aixin') through a combination of issuing shares and cash payments, as well as raising matching funds. The company's stocks will be suspended from trading starting tomorrow.

The announcement indicates that Shenzhen Yitoa Intelligent Control is currently negotiating with Aixin's shareholders. Among them, Shenzhen Zhongrenhe Consulting Enterprise (Limited Partnership), holding 47.53% of Aixin's shares, and Liang Pishu (the actual controller of the target company), holding 13.12% of the shares, have already signed a letter of intent.

The company states that it is expected to disclose the transaction plan within no more than 10 trading days. If the company fails to convene the board of directors to review and disclose the transaction plan within this timeline, the company's securities will resume trading at the latest at the market opening on November 29 and will terminate the planning of related matters.

The announcement also reminds that this transaction is expected to constitute a major asset restructuring as stipulated in the 'Management Measures for Major Asset Restructuring of Listed Companies' (2023 Revised), and is expected to constitute a related party transaction.

According to the introduction on Aixin's official website, Aixin was established in 2011 and is a chip design and solution provider focused on human-computer interaction, classified as a national high-tech enterprise and a national-level specialized, special and new 'little giant' enterprise.

The company's product introduction reveals that its human-computer interaction chip business is mainly divided into four directions: display driving, touch driving, protocol bridging chips, and led & optoelectronics. A spokesperson from Shenzhen Yitoa Intelligent Control informed China Securities Co., Ltd. reporters that the company is particularly interested in Aixin's business capabilities in the display driving field.

According to information from the Semiconductor Industry Association in Baoan District, Shenzhen, Aixin is a leading enterprise in display chip design, covering mainstream display technologies including LCD, led & optoelectronics, and oled. In 2022, it achieved revenue exceeding 0.8 billion yuan, with the market share in the LCD DDIC display driving chip and TDDI chip subfields ranking first in Shenzhen and among the top three in the industry.

It is worth mentioning that Aixin Technology also had plans for an initial public offering. According to information from the electronic disclosure platform of capital markets, in October 2023, China Securities Co., Ltd. released a report on the progress of the first public offering of stocks and listing guidance work of Shenzhen Aixin Technology Co., Ltd. (Fourth Issue), but Aixin Technology has not submitted IPO materials.

"We chose this symbol because we value the industrial synergy between both parties and hope to accelerate our overall transformation and upgrade process, as well as our influence in the niche field of display driver chips," a representative from Shenzhen Yitoa Intelligent Control told reporters from Caixin.

Currently, the domestic display industry chain is developing rapidly, and china has become a major producer and consumer of screens. However, the localization rate of display driver chips required for display screens is very low. According to CINNO Research statistics, in 2021, the localization rate of display driver chips in mainland china was only 16%.

Due to the enormous market for display driver chips, in recent years, Shenzhen Yitoa Intelligent Control has entered the field of display driver chips. According to public information, the company's vehicle-mounted display driver chips have already achieved mass delivery; the supply chain for vehicle-mounted touch and display driver chips has been established and is in a state ready for mass production.

This major restructuring is of great significance for the development of Shenzhen Yitoa Intelligent Control's display driver chip business. However, since the announcement indicated that the specific scheme for purchasing the target assets still needs further negotiation, whether this major restructuring can proceed smoothly remains to be seen in the subsequent developments.