The largest domestic semiconductor packaging and testing company is set to welco

A week after the disclosure of the shareholder equity transfer plan, the control change of Changdian Technology (600584.SH), a leader in semiconductor packaging and testing, has welcomed new progress: China Resources will become the actual controller of the company at a cost of 11.6 billion yuan.

Changdian Technology announced on the evening of March 26th that Panshi Hong Kong Limited (hereinafter referred to as "Panshi Hong Kong") plans to acquire 22.54% of the company's equity at a price of about 11.6 billion yuan. After this transaction, the original first largest shareholder, the National Integrated Circuit Industry Investment Fund Co., Ltd. (hereinafter referred to as "Big Fund Phase I"), will reduce its shareholding ratio to 3.5%, and the original second largest shareholder, Xin Dian Semiconductor (Shanghai) Co., Ltd. (hereinafter referred to as "Xin Dian Semiconductor"), will no longer hold the listed company's equity, making China Resources the actual controller.

As a leader in A-share semiconductor packaging and testing, Changdian Technology is the largest domestic semiconductor packaging and testing factory. Due to the long-term absence of an actual controller, the change in control has attracted market attention. If this transaction is successfully completed, how China Resources will promote the business development of Changdian Technology after taking over is also a focus of market attention.

China Resources' 11.6 billion yuan takeover of Changdian Technology

Advertisement

According to Changdian Technology's disclosure, the total cost of China Resources' acquisition of Changdian Technology shares will reach about 11.65 billion yuan.

The announcement shows that on March 26th, Big Fund Phase I, Xin Dian Technology, and Panshi Hong Kong signed an agreement to transfer their holdings of 174 million shares and 228 million shares of Changdian Technology, accounting for 9.74% and 12.79% of the shares, to Panshi Hong Kong or its affiliates at a price of 29 yuan per share, with a transfer consideration of about 5.046 billion yuan and 6.612 billion yuan, respectively.

As of the closing on March 26th, the share price of Changdian Technology was 28.25 yuan. Based on this calculation, the per-share transfer price of the two shareholders is about 2.65% higher than the secondary market price.

The equity transfer of the two shareholders this time is very rapid. Changdian Technology disclosed on March 19th that Big Fund Phase I and Xin Dian Semiconductor are planning to transfer the company's equity, which may involve a change in control. Changdian Technology is a leader in A-share semiconductor packaging and testing, the largest domestic semiconductor packaging and testing factory, and an early investment target of Big Fund Phase I. The company has not had an actual controller for many years, so this change in control has attracted market attention.

In the past two years, Big Fund Phase I has been reducing its holdings in Changdian Technology through the secondary market. Before this transaction, the fund held 237 million shares of the listed company, making it the largest shareholder. After this transfer, its shareholding ratio will be reduced to 3.5%. Xin Dian Technology's transfer this time completely exits Changdian Technology.

According to the disclosure, after the completion of the equity transfer, Panshi Hong Kong will hold 22.54% of Changdian Technology's shares, becoming the largest shareholder, with China Resources as the controlling shareholder of Panshi Hong Kong. Thus, China Resources also becomes the actual controller of Changdian Technology through this transaction.After taking over Changdian Technology, China Resources Group's semiconductor business map is expected to expand further. Previously, China Resources Group already had the semiconductor listed company China Resources Microelectronics (688396.SH) under its name. Changdian Technology stated in its announcement that the equity transfer still needs to be reviewed and approved by the board of directors of China Resources Group again, and subject to the review of relevant regulatory departments. There is still uncertainty about whether it can be completed.

SMIC bids farewell to Changdian Technology, and the National Fund significantly exits

Financial reports show that Changdian Technology is in the semiconductor chip finished product manufacturing and testing sub-industry, and is a world-leading integrated circuit manufacturing and technical service provider, offering a one-stop service for chip finished product manufacturing, including system integration of integrated circuits, design simulation, technology development, product certification, wafer mid-test, wafer-level mid-process packaging testing, system-level packaging testing, chip finished product testing, and can provide direct delivery services to semiconductor customers around the world.

If China Resources Group successfully takes over, Changdian Technology will bid farewell to the situation of having no actual controller for many years. In 2015, the company encountered bottlenecks in the acquisition of Xingke Jinpeng, and the following year it launched a supporting plan for issuing shares to acquire assets and raise funds, raising 2.655 billion yuan through a private placement, and the National Fund Phase I and Xindian Semiconductor became its shareholders through the private placement. Initially, Xindian Semiconductor was allocated more shares than the National Fund Phase I, becoming the first largest shareholder of the listed company. After 2017, the National Fund Phase I accelerated its investment pace, buying shares of Changdian Technology many times, and by the end of the third quarter of 2018, the National Fund Phase I rose to the first largest shareholder of Changdian Technology.

In 2020, the National Fund Phase I accelerated the recovery of investment. In the fourth quarter of that year, the fund reduced its holdings in Changdian Technology for the first time. With this equity transfer, most of the shares held by the National Fund Phase I have been exited.

Since the National Fund Phase I and SMIC became shareholders in 2016, they have played a key role in the development of Changdian Technology. The National Fund Phase I has driven the development of the local semiconductor industry chain through investment and provided financial support to Changdian Technology. SMIC also handed over chip packaging and testing to Changdian Technology.

The semi-annual report for 2023 shows that the related transaction amount between SMIC (Shanghai) Co., Ltd. and Changdian Technology is 2.339 billion yuan. The two parties also share some senior executives. The 2022 report shows that Gao Yonggang, chairman of SMIC, also serves as chairman of Changdian Technology; Wang Yong, the supervisor of Changdian Technology, also serves as vice president of SMIC.

Affected by the decline in industry prosperity and insufficient terminal consumer demand, the semiconductor industry reduced prices and de-stocked across the industry last year. Changdian Technology estimates that in 2023, the net profit will be between 1.322 billion yuan and 1.616 billion yuan, a year-on-year decrease of 49.99% to 59.08%, and the net profit after deducting non-recurring gains and losses will be between 1.092 billion yuan and 1.335 billion yuan, a year-on-year decrease of 52.83% to 61.41%.

Changdian Technology explained that compared with the first half of the year, the year-on-year decline in performance for the whole year has slowed down. In the second half of the year, some customer demand has rebounded, and the total order amount in the fourth quarter has returned to the level of the same period last year.

The prosperity of this round of semiconductor cycle has gradually warmed up since the third quarter of last year. If this transaction is successfully completed, how China Resources Group will promote the development of the largest domestic semiconductor packaging and testing factory after taking over Changdian Technology will be the focus of market attention.