On December 30, 2024, Wingtech Technology announced the signing of a "Letter of Intent for Sale" with Luxshare Limited, intending to transfer partial equity of the target companies related to the product integration business and the target operational assets owned by the company and its holding subsidiaries to Luxshare Limited or its designated party.

Overall, this decision not only reflects Wingtech Technology's strategy to cope with geopolitical risks but also highlights its firm determination to delve deeper into the Semiconductors field.

The foresight behind the strategic transformation.

Regarding the reasons for the planned transfer of the product integration business, Wingtech Technology stated in the announcement that, based on changes in the geopolitical environment and the development needs of the company's business, the company will build a new development pattern through strategic transformation in the future. Under this strategic layout, the company plans to gradually transfer the product integration business to high-quality platforms that have lean manufacturing advantages in areas such as Consumer Electronics.

The sale of assets related to the product integration business aims to find a more stable development platform for this Sector while promoting strategic transformation and optimizing the company's overall business layout.

This decision reflects the foresight of the company's management, allowing the company to focus more on enhancing its core competitiveness, increasing resilience against geopolitical risks, and ensuring long-term sustainable development.

Focusing on enhancing the advantages of the Semiconductor business.

While transferring the product integration business, Wingtech Technology also has a clear direction for strategic transformation - focusing on the Semiconductor business.

The announcement shows that Wingtech Technology has profound considerations for this trade. On one hand, it is beneficial for the company to concentrate resources on strategic transformation and upgrade, consolidating and enhancing its advantageous position in the Global power semiconductor industry. On the other hand, it helps optimize resource allocation, improve operation efficiency, strengthen sustainable profitability and risk resistance. At the same time, it aids in enhancing the company's sustainable operation capacity and core competitiveness to achieve a focus and transformation of the company's business.

As one of the global leaders in discrete and power chips, Wingtech Technology's semiconductor business continues to maintain a leading position. In 2023, it jumped to third place in the global top 10 power discrete component companies and has topped the Chinese ranking for four consecutive years.

An in-depth analysis of its 2024 third quarterly report clearly shows the robust development trend of the semiconductor business. In this quarter, the semiconductor business generated revenue of 3.832 billion yuan, a 5.86% increase compared to the previous period; net income was 0.666 billion yuan, a robust 18.92% increase compared to the previous period, demonstrating the company's excellent profitability; the gross margin was 40.5%, an increase of 2.8 percentage points year-on-year and 1.8 percentage points compared to the previous period.

In line with the development trend of semiconductors, future potential awaits release.

The global semiconductor market is flourishing, with surging demand in emerging fields. According to data from the Semiconductor Industry Association (SIA), the global semiconductor market sales are expected to reach 600 billion USD in 2024, a year-on-year growth of about 10%, with the automotive semiconductor market growing over 20%.

Wingtech Technology's strategic decisions focused on the semiconductor field are highly aligned with industry development trends, bringing numerous opportunities to the company.

In the future, Wingtech Technology's semiconductor business is expected to continue releasing its leading advantage potential in market competition, thanks to its deep technical accumulation and economies of scale. Taking automotive semiconductors as an example, as the process of automobile intelligence and electrification accelerates, the demand for high-performance chips is surging. Wingtech Technology, with its profound technical accumulation in the power semiconductor field, is expected to expand its development space.

A win-win trade, creating a commercial model.

Looking back at this Trade, this could be a deep Global Strategy cooperation opportunity between Wingtech Technology and Luxshare.

Wingtech Technology's product integration Business has accumulated rich customer resources, equipped with advanced facilities and a complete management system to ensure large-scale, high-quality production, with a strict quality control system to ensure product quality, achieving a good reputation within the Industry.

Luxshare is renowned for its lean manufacturing, possessing a mature lean production management system that enables refined management and efficient Operation. It can be said that Wingtech Technology has found an ideal platform for its product integration Business.

It is expected that after Luxshare takes over Wingtech Technology's ODM Business, complementary advantages may be realized, generating significant synergy effects, promoting the integration and upgrading of the ODM Industry, and setting a benchmark for the Industry.

Future outlook: performance and valuation are expected to soar.

Each step of Wingtech Technology's strategic transformation contains profound considerations for the future.

From a macro perspective of industry trends, the Semiconductors field is experiencing a booming Golden period, and Wingtech Technology has already emerged in this wave, as its Semiconductors Business ranks strong in the Global power discrete devices field.

In this journey of strategic transformation focusing on the Semiconductors Business, Wingtech Technology will rely on valuing R&D innovation and continuously improving efficiency as its dual wings, continuously demonstrating its growth and certainty, thereby having the opportunity to create more value in the Capital Markets.