The equity acquisition provokes inquiries!
Recently, Rui Chuang Wei Na plans to acquire about 56.25% of Huace Electronics for 281 million yuan. However, the latter’s performance has declined or even suffered losses, and it is deeply involved in contract sales disputes and its property has been frozen. Regarding the acquisition, the Shanghai Stock Exchange issued an inquiry to Rui Chuang Wei Na.
The acquisition target is in deep lawsuits, and the performance declines “vortex”
Recently, the science and technology innovation board company Rui Chuang Wei Na (688002.SH) announced that it intends to jointly acquire Wuxi Huatest Electronic System with Shenzhen Xinxi Juxin Investment Partnership (Limited Partnership) (hereinafter referred to as “Xinxi Juxin”) Co., Ltd. (hereinafter referred to as the “subject company”) 71.8704% of the equity, with a total transaction price of 359,352,200 yuan, of which the company acquired 56.253% of the equity of the subject company with its own funds of 281,265,200 yuan, Xinxi Juxin acquired 15.617% of the equity of the target company for RMB 78,087,000.
The purpose of the acquisition is to strengthen the company’s layout in the microwave field and enhance the company’s competitiveness in the microwave field.
The target company Huace Electronics is mainly dedicated to the development and production of microwave electronic products. The products involve microwave front-ends, microwave solid-state power amplifiers, microwave frequency integrated systems, microwave transceiver components (T/R components), and system-level microwaves in the fields of communication, navigation, and remote sensing. For electronic products, the main customers are domestic radar research and production units.
Image source: company announcement
It is worth noting that the target company Huace Electronics began to decline in performance in 2020. The net profit in 2018 and 2019 was 12.953 million and 24,496,600 respectively. The performance in 2020 has begun to decline, from 2,449 in 2019. 660,000 yuan fell to 9,125,100 yuan in 2020, and even suffered a loss in the first half of 2021, with a loss of 3,985,100 yuan.
In response to the company’s revenue and performance decline in 2020 and 2021, the company explained that it was mainly because the target company and a supplier were involved in a contract dispute. The production and delivery of the camp product could not be completed.
Rui Chuang Wei Na stated that as of the date of the announcement, the target company and the supplier had reached a settlement agreement, completed the withdrawal of the lawsuit and resumed normal operations. At the same time, the target company has started to develop a second supplier, and it is expected to reduce its reliance on procurement from this supplier in the future.
It is worth mentioning that the target company Huace Electronics was also involved in a sale and purchase contract dispute and the property was frozen.
Image source: Sky Eye Check
According to the data from Tianyan Check, on June 10, 2020, the People’s Court of Binhu District, Wuxi City, Jiangsu Province accepted the case of the dispute between the applicant Wuxi Guoxin Microelectronics System Co., Ltd. and the respondent Wuxi Huace Electronic System Co., Ltd. Wuxi Guoxin Microelectronics System Co., Ltd. applied to this court for property preservation, requesting to freeze the bank deposit of the respondent Wuxi Huace Electronic System Co., Ltd. of RMB 70,717,674 or to seal up the property of the corresponding value.
The applicant Wuxi Guoxin Microelectronics System Co., Ltd. has provided a guarantee.
In July 2020, the court agreed to freeze the respondent Wuxi Huace Electronic System Co., Ltd.’s bank deposits of 70.71 million yuan or seize the property of the corresponding value.
In July 2021, the People’s Court of Binhu District, Wuxi City again ruled to freeze the Huatest Electronic Bank deposits of 70.71 million yuan or to seal up the corresponding value assets.
The 280 million acquisition was inquired by the Shanghai Stock Exchange
However, Rui Chuang Wei Na did not disclose the freezing of property in the aforementioned contract disputes of the target company.
Regarding the target company’s performance decline due to supplier contract disputes and litigation, the Shanghai Stock Exchange issued an inquiry to Rui Chuang Wei Na, a listed company on the Science and Technology Innovation Board of the acquirer.
In fact, financial data shows that, as a party to the acquisition, Rui Chuang Wei Na’s operating income from 2016 to 2020 will be 60,250,600 yuan, 156 million yuan, 384 million yuan, 685 million yuan and 1.5 billion yuan, respectively. 6.1 billion yuan, the growth rate has doubled.
However, in the first half of this year, Rui Chuang Micro Nano’s operating income reached 870 million yuan, a year-on-year increase of 25.54%, and the growth rate fell far less than before.
As the growth rate of its own performance has declined, and the target company of the acquisition is deeply involved in the decline in performance of litigation, Rui Chuang Wei Na may seek acquisitions for development.
Specifically, in response to inquiries about acquisitions, the Shanghai Stock Exchange asked Rui Chuangwei to explain the target company and the specific circumstances of the transaction.
The Shanghai Stock Exchange noted that, according to the company’s announcement, at the end of June 2021, the target company had total assets of RMB 361,298,400, total liabilities of RMB 108,049,900, and net assets of RMB 253,248,500; operating income from January to June 2021 was 2,019. 86 million yuan, net profit-3,985,100 yuan, revenue and net profit have continued to decline since 2020. In 2020-2021, the target company and a supplier were involved in a contract dispute, which resulted in the failure to complete the production and delivery of a certain main product.
In view of this, the Shanghai Stock Exchange requires the company to supplement the disclosure: (1) The main content of the target company’s assets, liabilities, and owner’s equity at the end of June 2021; (2) Combining the target company’s operating income and operating costs by product, and the main expenses of each period Content, specific analysis of the reasons for the decline in performance; (3) The target company’s procurement model, procurement content and main supplier situation, whether there is a significant dependence, the countermeasures to be taken, and reminders of possible risks.
According to the company’s announcement, the price of this transaction is based on the valuation of the target company’s previous equity transfer, future earnings, and the valuation level of companies in the same industry. It has been negotiated by all parties and has not been evaluated.
The Shanghai Stock Exchange requires the company to combine the core technology and advanced nature of the target company, product types, uses, application scenarios, major customers, orders in hand and their certainty and binding force, the overall size of the market segment and the industry competition status and other factors, and the expected future revenue , The change in net profit and the turning point of performance turning positive, and explain the specific measures of the target company to improve its operating conditions.
In addition, according to the company’s announcement, in this transaction, the company will pay all the transaction payments within 3 working days after the target company completes the industrial and commercial change registration procedures. There is no arrangement for the transfer price installment payment, performance commitment and other arrangements.
The Shanghai Stock Exchange requires the company to supplement the disclosure of the reasons and rationality of the lack of installment payments, performance commitments and other measures for this transaction, and whether it is conducive to protecting the interests of listed companies and small and medium shareholders.
According to the company’s announcement, the company is based on the infrared field to become better, and horizontally expand into other areas to become stronger. This transaction has a certain promotion effect on the business layout and industrial synergy of listed companies.
In this regard, the Shanghai Stock Exchange requires the company to make additional disclosures: (1) The specific performance of the synergy between the listed company and the target company; (2) After the completion of the transaction, the listed company intends to integrate the target company’s business, assets, finances, and personnel. Measures, and prompts possible risks.
The equity acquisition provokes inquiries!
Recently, Rui Chuang Wei Na plans to acquire about 56.25% of Huace Electronics for 281 million yuan. However, the latter’s performance has declined or even suffered losses, and it is deeply involved in contract sales disputes and its property has been frozen. Regarding the acquisition, the Shanghai Stock Exchange issued an inquiry to Rui Chuang Wei Na.
The acquisition target is in deep lawsuits, and the performance declines “vortex”
Recently, the science and technology innovation board company Rui Chuang Wei Na (688002.SH) announced that it intends to jointly acquire Wuxi Huatest Electronic System with Shenzhen Xinxi Juxin Investment Partnership (Limited Partnership) (hereinafter referred to as “Xinxi Juxin”) Co., Ltd. (hereinafter referred to as the “subject company”) 71.8704% of the equity, with a total transaction price of 359,352,200 yuan, of which the company acquired 56.253% of the equity of the subject company with its own funds of 281,265,200 yuan, Xinxi Juxin acquired 15.617% of the equity of the target company for RMB 78,087,000.
The purpose of the acquisition is to strengthen the company’s layout in the microwave field and enhance the company’s competitiveness in the microwave field.
The target company Huace Electronics is mainly dedicated to the development and production of microwave electronic products. The products involve microwave front-ends, microwave solid-state power amplifiers, microwave frequency integrated systems, microwave transceiver components (T/R components), and system-level microwaves in the fields of communication, navigation, and remote sensing. For electronic products, the main customers are domestic radar research and production units.
Image source: company announcement
It is worth noting that the target company Huace Electronics began to decline in performance in 2020. The net profit in 2018 and 2019 was 12.953 million and 24,496,600 respectively. The performance in 2020 has begun to decline, from 2,449 in 2019. 660,000 yuan fell to 9,125,100 yuan in 2020, and even suffered a loss in the first half of 2021, with a loss of 3,985,100 yuan.
In response to the company’s revenue and performance decline in 2020 and 2021, the company explained that it was mainly because the target company and a supplier were involved in a contract dispute. The production and delivery of the camp product could not be completed.
Rui Chuang Wei Na stated that as of the date of the announcement, the target company and the supplier had reached a settlement agreement, completed the withdrawal of the lawsuit and resumed normal operations. At the same time, the target company has started to develop a second supplier, and it is expected to reduce its reliance on procurement from this supplier in the future.
It is worth mentioning that the target company Huace Electronics was also involved in a sale and purchase contract dispute and the property was frozen.
Image source: Sky Eye Check
According to the data from Tianyan Check, on June 10, 2020, the People’s Court of Binhu District, Wuxi City, Jiangsu Province accepted the case of the dispute between the applicant Wuxi Guoxin Microelectronics System Co., Ltd. and the respondent Wuxi Huace Electronic System Co., Ltd. Wuxi Guoxin Microelectronics System Co., Ltd. applied to this court for property preservation, requesting to freeze the bank deposit of the respondent Wuxi Huace Electronic System Co., Ltd. of RMB 70,717,674 or to seal up the property of the corresponding value.
The applicant Wuxi Guoxin Microelectronics System Co., Ltd. has provided a guarantee.
In July 2020, the court agreed to freeze the respondent Wuxi Huace Electronic System Co., Ltd.’s bank deposits of 70.71 million yuan or seize the property of the corresponding value.
In July 2021, the People’s Court of Binhu District, Wuxi City again ruled to freeze the Huatest Electronic Bank deposits of 70.71 million yuan or to seal up the corresponding value assets.
The 280 million acquisition was inquired by the Shanghai Stock Exchange
However, Rui Chuang Wei Na did not disclose the freezing of property in the aforementioned contract disputes of the target company.
Regarding the target company’s performance decline due to supplier contract disputes and litigation, the Shanghai Stock Exchange issued an inquiry to Rui Chuang Wei Na, a listed company on the Science and Technology Innovation Board of the acquirer.
In fact, financial data shows that, as a party to the acquisition, Rui Chuang Wei Na’s operating income from 2016 to 2020 will be 60,250,600 yuan, 156 million yuan, 384 million yuan, 685 million yuan and 1.5 billion yuan, respectively. 6.1 billion yuan, the growth rate has doubled.
However, in the first half of this year, Rui Chuang Micro Nano’s operating income reached 870 million yuan, a year-on-year increase of 25.54%, and the growth rate fell far less than before.
As the growth rate of its own performance has declined, and the target company of the acquisition is deeply involved in the decline in performance of litigation, Rui Chuang Wei Na may seek acquisitions for development.
Specifically, in response to inquiries about acquisitions, the Shanghai Stock Exchange asked Rui Chuangwei to explain the target company and the specific circumstances of the transaction.
The Shanghai Stock Exchange noted that, according to the company’s announcement, at the end of June 2021, the target company had total assets of RMB 361,298,400, total liabilities of RMB 108,049,900, and net assets of RMB 253,248,500; operating income from January to June 2021 was 2,019. 86 million yuan, net profit-3,985,100 yuan, revenue and net profit have continued to decline since 2020. In 2020-2021, the target company and a supplier were involved in a contract dispute, which resulted in the failure to complete the production and delivery of a certain main product.
In view of this, the Shanghai Stock Exchange requires the company to supplement the disclosure: (1) The main content of the target company’s assets, liabilities, and owner’s equity at the end of June 2021; (2) Combining the target company’s operating income and operating costs by product, and the main expenses of each period Content, specific analysis of the reasons for the decline in performance; (3) The target company’s procurement model, procurement content and main supplier situation, whether there is a significant dependence, the countermeasures to be taken, and reminders of possible risks.
According to the company’s announcement, the price of this transaction is based on the valuation of the target company’s previous equity transfer, future earnings, and the valuation level of companies in the same industry. It has been negotiated by all parties and has not been evaluated.
The Shanghai Stock Exchange requires the company to combine the core technology and advanced nature of the target company, product types, uses, application scenarios, major customers, orders in hand and their certainty and binding force, the overall size of the market segment and the industry competition status and other factors, and the expected future revenue , The change in net profit and the turning point of performance turning positive, and explain the specific measures of the target company to improve its operating conditions.
In addition, according to the company’s announcement, in this transaction, the company will pay all the transaction payments within 3 working days after the target company completes the industrial and commercial change registration procedures. There is no arrangement for the transfer price installment payment, performance commitment and other arrangements.
The Shanghai Stock Exchange requires the company to supplement the disclosure of the reasons and rationality of the lack of installment payments, performance commitments and other measures for this transaction, and whether it is conducive to protecting the interests of listed companies and small and medium shareholders.
According to the company’s announcement, the company is based on the infrared field to become better, and horizontally expand into other areas to become stronger. This transaction has a certain promotion effect on the business layout and industrial synergy of listed companies.
In this regard, the Shanghai Stock Exchange requires the company to make additional disclosures: (1) The specific performance of the synergy between the listed company and the target company; (2) After the completion of the transaction, the listed company intends to integrate the target company’s business, assets, finances, and personnel. Measures, and prompts possible risks.
The Links: FLC48SXC8V-05 2SC0435T2A0-17 MITSUBISHI-IGBT
