(Yicai) July 23 -- GoerTek, a leading Chinese supplier of smart acoustics equipment, said it plans to invest HKD10.4 billion (USD1.3 billion) to buy two manufacturers of precision structural components to strengthen its vertical integration capabilities in the smart hardware sector and better serve its key clients.

GoerTek has reached a preliminary agreement with Luen Fung Commercial Holdings to fully acquire Mega Precision Technology and Channel Well Industrial, the Weifang-based company announced late yesterday. The two assets are registered in Hong Kong and have factories in Dongguan, China's southern Guangdong province.

Mega Precision and Channel Well have industry-leading precision metal structural parts processing competitiveness, with strong accumulation of core technologies in processing metal and non-metal materials and refined surface treatment, GoerTek noted. Due to their long-term cooperation with top firms in the sector, they have relatively large revenue and asset scale.

The combined operating revenue of Mega Precision and Channel Well was around HKD9.1 billion (USD1.2 billion) in the 2024 fiscal year, GoerTek said, citing unaudited data.

Mega Precision is the world's largest supplier of iPhone metal buttons and socket components, while also providing metal accessories for luxury brands, including Longines, Ernest Borel, Louis Vuitton, and Dior. Channel Well focuses on the assembly and testing of consumer electronics and also counts Apple among its clients.

The main businesses of Mega Precision and Channel Well can provide complementary advantages and business synergies with GoerTek's precision structural parts business, the buyer pointed out, adding that the two high-quality assets can enhance the vertical integration capabilities of its core business, strengthen its overall competitiveness in the industry, and facilitate deeper collaboration with leading clients.

GoerTek has been an Apple supplier since 2010 and is now the US tech giant's most comprehensive supplier of acoustic products. Over the past 15 years, the business has expanded from just microphones to speakers, receivers, precision structural components, optical components, and the assembly of complete products, such as AirPods and HomePods.

Shares of GoerTek [SHE: 002241] fell 1.1 percent to CNY23.54 (USD3.28) each as of 2.20 p.m. in Shenzhen today. The stock closed 3.4 percent higher yesterday.

Editor: Martin Kadiev