TCL Group (000100.SZ) released more details on the acquisition of equity of Shenzhen Huaxing Optoelectronics Technology Co., Ltd. on the evening of September 25.
TCL intends to purchase a 10.04% stake in China Star Optoelectronics, which is held by Changjiang Hanyi, Xingyu Limited, Lin Zhouxing, Lin Zhouxing, Lin Zhouxingyuan and Lin Zhouxing, through the issuance of shares, and the parties negotiated a price of RMB 4.034 billion.
All transactions will be paid by issuing shares. After the transaction is completed, TCL Group will directly hold 85.71% stake in China Star Optoelectronics, and Yangtze River Hanwing will receive 7.84% of TCL shares.
The specific number of shares issued during the transaction is as follows:
Dealing with the specific issue of shares
In the future, TCL will continue to buy back the remaining shares of China Star Optoelectronics.
Profit
Huaxing Optoelectronics is principally engaged in the research and development, production and sales of semiconductor display panels. It was jointly established by TCL Corporation and Shenzhen Shenchao Technology in November 2009. With an initial registered capital of RMB 1 billion, TCL and SST are each to subscribe for 50%.
Since then, after nine capital increases and six equity transfers, the registered capital of China Star Optoelectronics reached 18.342 billion yuan, and Shenchao Technology has withdrawn. TCL’s shareholding ratio has reached 75.67%.
Because the products are for enterprises, the exposure of China Star Optoelectronics is not high, but for TCL, it is a high-quality asset to improve the company's performance.
In 2015, 2016, and the first quarter of 2017, China Star Optoelectronics continued to increase its contribution to the TCL Group's revenue.
In 2015, China Star Optoelectronics contributed revenue of 18.038 billion yuan, accounting for 17.77% of TCL's total revenue. In the first quarter of 2017, China Star Optoelectronics contributed revenue of 6.54 billion, accounting for 26.30%.
TCL Group's main business income in the first two years
In the first half of 2017, TCL realized sales revenue of 51.3 billion yuan, an increase of 9.41% year-on-year; EBITDA earned 5.92 billion yuan, a year-on-year increase of 72.4%. The net profit attributable to the shareholders of the listed company was 1.03 billion yuan, an increase of 70.7% year-on-year.
In the same period, Huaxing Optoelectronics achieved sales revenue of RMB 13.54 billion, which was an increase of 49.2% year-on-year, and realized EBITDA of RMB 5.48 billion, an increase of 149.7% year-on-year.
TCL said that after the completion of the transaction, the listed company's continued profitability will be enhanced, and it will also help to strengthen support for all aspects of Huaxing Optoelectronics' operation and improve its business execution efficiency. On this basis, it will deepen the deployment of LCD panel products. The development plan of the field can further enhance the comprehensive competitiveness and profitability of listed companies.
At the same time, TCL intends to implement the transaction to allow Huaxing Optoelectronics' main management personnel and core employees to hold shares in listed companies through Xingyu Co., Ltd., Lin Zhouxing, Lin Zhouxing, Lin Zhouxingyuan, Lin Zhouxing, and other employee holding platforms to increase employee cohesion. .
To increase to 100% in the future
At the recent IFA Consumer Electronics Show in Germany, TDL Group Chairman Li Dongsheng said that semiconductor display technology, artificial intelligence and Internet services, and intelligent manufacturing upgrades will be TCL's future development direction.
Specific to the semiconductor industry, Li Dongsheng set a goal for the company to surpass Samsung in three to five years. The main bearer of this goal is China Star Optoelectronics.
Huaxing Optoelectronics is currently the second largest TV LCD panel manufacturer in mainland China. According to IHS research data, the company’s 2016 share of the global TV panel market is 13%, which has become a global influence. TFT-LCD display panel supplier.
According to the report of TCL in the first half of the year, the t1 and t2 factories of Huaxing Optoelectronics, which mainly produce TV panels, continued to maintain full-scale sales, and the market share of TV panel products continued to increase. Among them, 55-inch products accounted for the third largest market share in the world and 32-inch product market share. The second highest rate in the world. The t3 plant, which mainly manufactures high-end smart phones and panels for mobile PCs, has already provided small-scale supply to external customers, and full-screen products are expected to reach volume production in the fourth quarter.
In addition, China Star Optoelectronics t6 project (11th generation TFT-LCD and AMOLED new display device production line construction project) is expected to be put into production in the second quarter of 2019; t4 project (6th generation LTPS-AMOLED flexible production line) is expected to put into production in 2020; OLED The research and development test line has been completed.
Li Dongsheng once disclosed that for the company, the largest capital investment is Huaxing Optoelectronics. TCL had wanted to spin off this part of the business, but it was constrained by the failure of domestic capital market related policies. TCL then considered the group's platform to finance Huaxing Optoelectronics.
After the completion of the transaction, the remaining shares of China Star Optoelectronics include the 11.00% equity held by China Development Fund and the 3.28% equity held by Guangdong Finance Trust. TCL will repurchase this part of the equity in the future and look forward to forming a more efficient and competitive semiconductor display industry group.
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