After the stock price has fallen sharply for a long time, the nearly 300 billion market value enterprise Luxshare Precision Industry Co.Ltd(002475) (002475) made two major moves on February 11: first, it is to fully join hands with Chery group to develop the automobile OEM business, including jointly establishing a joint venture and the controlling shareholder of Lixun Co., Ltd. (hereinafter referred to as “Lixun Co., Ltd.”) investing more than 10 billion yuan in Chery holdings and its affiliated subsidiaries; second is Luxshare Precision Industry Co.Ltd(002475) it plans to acquire 74.67% equity of juxtaposition Technology (01729, HK), a listed company on the main board of Hong Kong stocks, with a total price of HK $1.104 billion, so as to improve the strategic layout of Internet products.
fully join hands with Chery group to produce automobile OEM
On the evening of February 11, Luxshare Precision Industry Co.Ltd(002475) announced that on that day, Luxshare Precision Industry Co.Ltd(002475) and Chery Holding Group Co., Ltd. (hereinafter referred to as “Chery holding”), Chery Automobile Co., Ltd. (hereinafter referred to as “Chery shares”) Chery New Energy Automobile Co., Ltd. (hereinafter referred to as “Chery new energy”) (“Chery holding”, “Chery shares”, “Chery new energy” and its related parties collectively referred to as “Chery group”) jointly signed the strategic cooperation framework agreement in Wuhu, laying a strategic partnership between the two sides.
According to the agreement, Luxshare Precision Industry Co.Ltd(002475) and Chery new energy intend to jointly establish a joint venture, specializing in the R & D and manufacturing of new energy vehicles, providing cutting-edge R & D, design, mass production platform and access to the sea for Luxshare Precision Industry Co.Ltd(002475) auto core parts business, and committed to realizing the company’s medium and long-term goal of becoming a leading manufacturer of auto parts Tier1.
Among them, Luxshare Precision Industry Co.Ltd(002475) plans to subscribe 500 million yuan, hold 30% of the registered capital of the cooperative subsidiary, and Chery new energy subscribed 1.167 billion yuan and holds 70% of the registered capital. The cooperation between the two sides is exclusive, that is, Chery group cannot cooperate with other automobile OEM enterprises in OEM business, but can independently OEM business or cooperate with automobile brand enterprises in OEM business.
At the same time, on the day of signing the above agreement, Luxshare Precision Industry Co.Ltd(002475) controlling shareholder Lixun Co., Ltd. signed the equity transfer framework agreement with Qingdao Wudaokou new energy automobile industry fund enterprise (limited partnership), which agreed that Lixun Co., Ltd. would purchase 19.88% equity of Chery holdings, 7.87% equity of Chery shares and 6.24% equity of Chery new energy held by Qingdao Wudaokou with RMB 10.054 billion, After the completion of the transaction, Lixun Co., Ltd. does not control Chery holdings, Chery shares and Chery new energy. Before the signing of the equity transfer framework agreement, Qingdao Wudaokou held 46.77% equity of Chery holdings and was the largest shareholder of Chery holdings.
Chery holdings and its affiliated subsidiaries have been deeply engaged in the automotive industry for many years. They have a complete technology and product R & D system in the vehicle field, especially an independent platform in the vehicle manufacturing link, which can provide Chery Automobile and other brands with comprehensive services from vehicle development to mass production, and have a core competitive advantage in the industry.
Luxshare Precision Industry Co.Ltd(002475) said that the company signed a strategic cooperation framework agreement with Chery holdings and its related parties to comprehensively strengthen the strategic layout of the company’s automobile business and make full use of Chery group’s deep technical precipitation and terminal brand resources in the field of new energy vehicles, Set up a joint venture company and cross-border empower the technology and customer resources accumulated by the company in the field of consumer electronics over the years. With the support of the vehicle joint venture platform as the cutting-edge R & D and design, mass production platform and sea port, the company will dynamically enter the market, quickly improve the comprehensive ability of the company as the core parts of Tier1 manufacturer, and quickly polish, optimize and increase the quantity in practice, Realize the diversified and large-scale development of the company’s core components and achieve the medium and long-term goal of becoming a leading manufacturer of Tier1.
proposed HK $1.1 billion acquisition of 74.67% equity of convergence technology
was synchronized with the above announcement. On the 11th, Luxshare Precision Industry Co.Ltd(002475) issued an announcement on the acquisition of the controlling stake of convergence technology.
Luxshare Precision Industry Co.Ltd(002475) said that in order to further improve the strategic layout, the company plans to acquire datatechinvestment Inc at HK $0.80 per share through luxshareprecisionlimited, an overseas wholly-owned subsidiary. (hereinafter referred to as “seller 1”) holds 205 million shares of convergence technology (accounting for about 11.09%, hereinafter referred to as “target share 1”) and 1.175 billion shares of convergence technology (accounting for about 63.58%, hereinafter referred to as “target share 2”) held by timeI interconnect Holdings Limited (hereinafter referred to as “seller 2”), totaling 1.38 billion shares of convergence technology (accounting for about 74.67%), with a total purchase consideration of HK $1.104 billion.
for this acquisition, seller 1, seller 2, Luxshare Precision Industry Co.Ltd(002475) Co., Ltd. and lochungwai, Paul (Luo Zhongwei) (the guarantor) signed the share purchase and sale agreement on February 11, 2022. As of the closing on February 11, 2022, the closing share price of convergence technology is HK $0.81/share.
According to the announcement, since there is still a third-party pledge right on the subject share 1 on the signing date of the transaction agreement, according to the transaction agreement, if the share pledge has not been lifted at the time of delivery, then Luxshare Precision Industry Co.Ltd(002475) Co., Ltd. has the right not to purchase the subject share 1, but to deliver only the part of the subject share 2. In this case, After the closing, Luxshare Precision Industry Co.Ltd(002475) Co., Ltd. will hold 1.175 billion shares of convergence technology, accounting for about 63.58% of the issued shares of convergence technology on the date of this announcement.
According to the regulations of the Hong Kong stock exchange, since Luxshare Precision Industry Co.Ltd(002475) will obtain more than 30% of the voting rights of convergence technology, it is necessary to issue an unconditional mandatory cash offer to other shareholders of convergence technology at a price of HK $0.80 per share. It is uncertain whether it will be accepted in the end.
Convergence technology mainly produces and sells copper cable, optical cable and wire components and network wire components. The products are used in telecommunications, data center, industrial equipment, medical equipment, network wires and other fields. In 2020, convergence technology achieved a total operating revenue of HK $308 million and a net profit of HK $226 million.
Luxshare Precision Industry Co.Ltd(002475) said that convergence technology is a supplier of customized wire interconnection solutions, with more than 20 years of industry experience. Its main products are used in telecommunications, data centers, industrial equipment, medical equipment, network wires and other fields. It has corresponding R & D technology accumulation and operation management experience, and has strong complementarity with Luxshare Precision Industry Co.Ltd(002475) in segmenting products and serving customers. The acquisition aims to further improve the strategic layout of the company’s interconnected products in the fields of communication, medical treatment, automobile, industry and so on from the aspects of products, customers and market. In the future, the company and Jiji technology will mutually empower each other in precision manufacturing, digital management, business philosophy and customer resources, continuously improve strategic coordination and safeguard the interests of the company and its shareholders.
Luxshare Precision Industry Co.Ltd(002475) said that the capital source of the company’s acquisition is its own funds. After the acquisition, converged technology will be included in the scope of the company’s consolidated statements, which is not expected to have a significant impact on the company’s financial status and operating results in 2022.
On February 11, Luxshare Precision Industry Co.Ltd(002475) closed down 6.09%, with a closing price of 41.05 yuan / share and a total market value of 290.3 billion yuan. Since January 25, 2022, Luxshare Precision Industry Co.Ltd(002475) share price has fallen by 16.72%. On the 11th, the share price of convergence technology closed down 12.9%, with a total market value of HK $1497 million.
