Ninestar: Acquisition of 100% equity of BenTu approved, effectively improving market competitiveness

On the evening of September 1, Ninestar responded to the questions in the previous review opinion of the China Securities Regulatory Commission regarding the acquisition of 100% equity of Bentum. The company stated that Bentum Electronics and Lexmark International have different development histories, and the resource endowments, product target groups, and competitive advantages formed in the development process are also different. From the distribution of the existing product lines of both parties and the target customer groups, Bentum Electronics and Lexmark International have not generated substantial competition, and Bentum Electronics has not encroached on the printer business opportunities of the listed company.

Nasda said that Bentum Electronics and Lexmark International have very different development histories and resource endowments, and their target markets are very different. Their product lines are different and complementary. The ODM products sold by Lexmark International to Bentum Electronics can be sold in China's ICT market mainly due to Bentum Electronics' transformation and adaptation of related products. Bentum Electronics' purchase of ODM products from Lexmark International has objectively expanded the market and sales of the listed company's printer business, which is conducive to protecting the interests of the listed company.

Recently, the China Securities Regulatory Commission reviewed the company's issuance of shares and payment of cash to purchase assets and raise supporting funds and related transactions. According to the review results of the meeting, the company's restructuring was conditionally approved. After the completion of this major asset restructuring, Pantum Electronics will become a wholly-owned subsidiary of Ninestar, and Ninestar will embark on a new journey of global competitive strategy for China's independent printer brands.

At present, BenQ Electronics has achieved double growth in shipments and market share for seven consecutive years, with both volume and price rising in the commercial market, and profitability continuing to improve. In the first half of 2021, BenQ Electronics achieved operating income of 1.863 billion yuan and profit of 352 million yuan, which has exceeded the full-year net profit of 2020, and has completed nearly 90% of the full-year performance commitment of 400 million yuan in 2021. BenQ Electronics has abundant growth momentum in the future, and after the successful acquisition, it will significantly increase the profits of the listed company.

It is worth mentioning that the incorporation of BenQ Electronics into the listed company will help Ninestar improve its layout of the entire industry chain and complete the industrial closed loop. With its excellent technical processes and the world's leading market share of single products, Ninestar has been selected as the "Manufacturing Single Champion Demonstration Enterprise" by the Ministry of Industry and Information Technology. It is expected to serve as the "chain leader" of the printer industry and lead the development and growth of the industrial chain. The printer SoC main control chip independently developed by BenQ Electronics can effectively resist all kinds of harmful data from a top-level perspective, ensure the safety of the printer throughout its life cycle, and further enhance information security. It is reported that BenQ Electronics has become the main supplier of related products in the Xinchuang ecosystem.

After the completion of this acquisition, Ninestar will own two printer and consumables brands, Lexmark International and Pantum Electronics, which will help enhance its overall market competitiveness. Specifically, from the perspective of procurement, both parties can make full use of their respective supply chain resource advantages and product cost advantages, improve bargaining power, better realize economies of scale, and reduce the product costs of printers and consumables of listed companies.

From the perspective of market sales, after the product cost drops, Ninestar will have greater advantages in channel sales and market promotion compared with its competitors. The company and Pantum Electronics can fully utilize their respective product advantages and channel resource advantages to cooperate and meet the differentiated needs of customers in their respective sales channels for printers and consumables, further enhance the product visibility and market reputation of both parties, increase the market share of both parties in their respective segments, and achieve common growth in sales performance of both parties;

In addition, Ninestar said that the company will actively use its accumulated management advantages, financial advantages and other advantageous resources to further optimize the management of Pantum Electronics in R&D, production, sales, financial management, quality control, etc., give full play to the synergy between the two parties in the market and procurement, promote the continuous development and growth of the company and Pantum Electronics' business, enhance the overall competitiveness of both parties' printer business in the global market, and increase the company's overall performance.