(Yicai Global) May 29 -- Shares of TCL Technology Group surged after the Chinese electronics giant said that it will double its stake in China Star Optoelectronics Technology to bet on the quickly expanding display supplier.
TCL's stock price [SHE: 000100] rose 5.67 percent to CNY5.22 (US 73 cents) in the afternoon.
A unit of the maker of TV sets, phones, and white goods will purchase nearly 40 percent of China Star Optoelectronics shares for CNY4.2 billion (USD587.4 million), the Huizhou-based parent said in a statement yesterday. The deal will raise TCL's stake to more than 80 percent.
Founded in May 2014, China Star Optoelectronics mainly makes high-end panel displays for smartphones and personal computers and counts Huawei Technologies and Xiaomi as some of its major clients. Last year, its market share of low-temperature polycrystalline silicon liquid-crystal displays reached No. 2 globally, according to IHS Markit's report released in December.
TCL has teamed with government-backed Hengjian Holdings to raise no more than CNY2.6 billion (USD363.8 million) by private placement and convertible bonds to fund the acquisition, as well as repay debts and boost working capital.
Last year, China Star Optoelectronics's net profit skyrocketed to CNY613 million (USD85.8 million) from the previous year's CNY9.5 million (USD1.3 million), according to public data. Its revenue nearly tripled to CNY13 billion. By the end of 2019, its monthly output reached 50,000 large glass substrates.
Editor: Emmi Laine