Unigroup Guoxin initially plans to acquire Unigroup Liansheng for 18 billion

Ziguang Guwei (002049) disclosed a major asset reorganization plan on the evening of June 2. The company plans to purchase 100% of the equity of Ziguang Liansheng, which is under the same controller of the company, by issuing shares. The initial price is agreed to be 18 billion yuan.

After the transaction is completed, Unisplendour will be included in the consolidated financial statements of the listed company. The company's stock will resume trading from the opening of the market on June 3, 2019.

Unisplendour is a holding company established in 2018 to acquire Linxens-related assets. Its core asset Linxens is mainly engaged in the design and production of smart security chip micro connectors, RFID inlays and antennas, and ultra-thin flexible LED light strips. It is one of the world's largest manufacturers of smart security chip components.

The announcement shows that Linxens, a subsidiary of the target company, Unisplendour, is a technology company with leading technology and market position in the field of smart security chip components. Linxens' main customers cover telecommunications, transportation, hotels, financial services, e-government and the Internet of Things, and its products are in a leading position in the smart security chip component industry. Linxens provides high-quality RFID inlays for electronic document identification in electronic passports and electronic ID cards.

In addition, Linxens products have obvious technological advantages in multiple application segments, and has established an international sales network, R&D center and production base. Through this transaction, Linxens will leverage the platform and customer resources of the listed company to effectively improve its investment and financing capabilities, expand its product share in the Chinese market, and promote Linxens' localized business capabilities in China.

After the transaction is completed, Unigroup Guoxin will give full play to the synergy between the two parties through business integration and division of labor. The listed company will obtain new growth points, and the asset quality and business scale will be improved, which will be conducive to the realization of long-term value for shareholders.

According to the transaction plan, the price of 100% equity of Unisplendour was initially agreed to be RMB 18 billion. After consultation between the company and the counterparty, it was finally determined that the share issuance price for this issuance of shares to purchase assets was RMB 35.51 per share.

It is worth noting that the restructuring plan did not disclose the target company's financial data. The plan explained that the main assets of Unisplendour are distributed in multiple countries, and most of its operating income and net profit come from overseas. The due diligence and audit workload is large. The international financial reporting standards applicable to overseas companies are different from the enterprise accounting standards applicable to domestic companies. It takes a long time to issue financial data. Therefore, the plan does not disclose the target company's financial data.

In addition, among the counterparties of the transaction, Ziguang Shencai is a company controlled by Ziguang Group, the indirect controlling shareholder of Ziguang Guowei; Zijin Haikuo and Zijin Haiyue are companies controlled by Zhao Weiguo, a person associated with Ziguang Group; and Xinhua Investment is a company indirectly invested by Ziguang Group. Therefore, this transaction constitutes a related-party transaction.

The plan points out that in 2018, Unigroup Guoxin purchased smart security chip micro connectors from Linxens, a subsidiary of the target company, and commissioned the production of modules, which constituted related transactions. After the transaction is completed, the target company will become a wholly-owned subsidiary of the listed company, which will reduce related transactions between the listed company and the actual controller.

Unigroup Guoxin's main businesses include integrated circuit chip design and sales, and quartz crystal component business. Its integrated circuit chips include smart security chips, special integrated circuits and memory chips.

According to statistics from the China Semiconductor Industry Association (CSIA), the sales of my country's integrated circuit industry in 2018 was 653.2 billion yuan, a year-on-year increase of 20.71%. From 2015 to 2018, the compound growth rate of the sales of the integrated circuit industry was 21.86%. In 2018, the sales of my country's integrated circuit design industry was 251.93 billion yuan, a year-on-year increase of 21.50%.

While my country's integrated circuits are developing rapidly, the trade deficit is expanding. According to Chinese Customs statistics, China's integrated circuit imports in 2018 amounted to US$312.06 billion, a year-on-year increase of 19.8%, and exports amounted to US$84.64 billion, a year-on-year increase of 26.6%, and the trade deficit reached US$227.42 billion.

Unigroup Guoxin said that through this transaction, the company will obtain a safe and stable source of micro-connector supply, and with the help of the target company's overseas sales channels and customer relationships, expand the listed company's overseas smart security chip business and enhance its market share and global competitiveness. At the same time, after the completion of this transaction, the listed company's assets and revenue scale will increase, and the listed company's risk resistance will be further enhanced.