Tongfu Microelectronics: The application for RMB 5.5 billion of additional issuance was approved by the China Securities Regulatory Commission

On the evening of January 24, Tongfu Microelectronics issued an announcement stating that the Issuance Review Committee of the China Securities Regulatory Commission reviewed the company's application for non-public issuance of A shares on January 24. According to the review results, the company's application for non-public issuance of A shares was approved.

According to the plan for a private placement disclosed by Tongfu Microelectronics on the evening of September 27, 2021, the company plans to raise no more than 5.5 billion yuan through a private placement to be used for the construction of "memory chip packaging and testing production line construction projects", "high-performance computing product packaging and testing industrialization projects", "5G and other new generation communication product packaging and testing projects", "wafer-level packaging product expansion projects", and "power device packaging and testing expansion projects", as well as to repay bank loans and replenish working capital.

Specifically, the proposed investment amount for the "Memory Chip Packaging and Testing Production Line Construction Project" is 956 million yuan. Memory chips are mainly used in electronic products such as smartphones, laptops, smart watches, as well as cloud servers, the Internet of Things and other fields. According to data from the China Business Industry Research Institute, the sales volume of the notebook computer market in 2020 was 25.4 million units, a year-on-year increase of 20.0%; from January to June 2021, domestic mobile phone shipments were 174 million units, a year-on-year increase of 13.7%. With the increase in sales of electronic products such as smartphones, laptops, and smart watches, the demand for memory chips has also increased. According to the announcement disclosed by Tongfu Microelectronics, the construction period of the project is 2 years. After completion, the annual additional memory chip packaging and testing production capacity will be 144 million pieces, and the annual additional sales revenue is expected to be 504 million yuan, and the annual additional after-tax profit will be 58.2115 million yuan.

The investment amount of the "High-Performance Computing Product Packaging and Testing Industrialization Project" is 980 million yuan. According to Gartner data statistics and forecasts, in 2020, the global cloud computing market will exceed 220 billion US dollars, which will form a huge purchasing demand for semiconductor products. It is expected that the market size will reach about 360 billion US dollars by 2023. The growth in demand in the fields of smartphones, CPUs, GPUs, and cloud computing will drive the market for high-performance computing chips, and then drive the market demand for packaging and testing. After the completion of the project, the annual production capacity of packaging and testing high-performance products will be increased by 322 million pieces. After reaching full production, it is expected to increase annual sales revenue by 1.153 billion yuan and increase annual after-tax profit by 112 million yuan.

The planned investment amount for the "5G and other new generation communication product packaging and testing project" is 992 million yuan. After the completion of the project, the annual production capacity of 5G and other new generation communication products will be increased by 2.412 billion pieces. The annual sales revenue is expected to increase by 822 million yuan, and the annual after-tax profit will increase by 96.2872 million yuan.

The investment amount of the "wafer-level packaging product expansion project" is 979 million yuan. The construction period of the project is 3 years. After completion, the annual integrated circuit packaging capacity will increase by 780,000 pieces. It is expected to increase annual sales revenue by 780 million yuan and annual after-tax profit by 123 million yuan.

The investment amount of the "Power Device Packaging and Testing Expansion Project" is 567 million yuan. The construction period of the project is 2 years. After completion, the annual power device packaging and testing production capacity will be increased by 1.45 billion pieces. It is expected to increase annual sales revenue by 500 million yuan and increase annual after-tax profit by 55.152 million yuan.

According to the data disclosed in the plan for the private placement, after all the above-mentioned private placement projects are completed and put into production, it is estimated that the annual sales revenue will increase by 3.759 billion yuan and the after-tax profit will increase by 445 million yuan.

Regarding the impact of this issuance on the company, Tongfu Microelectronics stated that the company specializes in integrated circuit packaging and testing business. The funds raised from this private placement will be fully invested in the company's main business, which will help the company further enhance its main business advantages and will not have an adverse impact on the company's main business scope and business structure.