On the evening of November 17, Xidi Micro (688173) announced that the company intends to purchase 100% of the shares of Chengxin Micro held by Cao Jianlin, Cao Songlin, Lianzhi Chuangxin and Huizhi Chuangxin by issuing shares and paying cash, of which 55% of the transaction consideration is paid by the listed company by issuing shares, and 45% of the transaction consideration is paid by the listed company in cash.

Xidiwei expects that this transaction constitutes a major asset restructuring but does not constitute a related party transaction and restructuring and listing. At the same time, the company's shares will resume trading from the market open on November 18, 2024. In view of the fact that the audit and evaluation of the assets involved in this transaction have not been completed, the board of directors of the company decided not to convene a general meeting of shareholders to consider matters related to this transaction for the time being.

According to public information, Chengxin Micro was established in 2009, and the core R&D team has more than 15 years of experience in power management chip design, R&D, production and testing. The company's multi-category power management chips have been introduced into ZTE, TCL, Lenovo, Xiaomi, Lixun Precision and other enterprises, and are used in automotive electronics, smart phones, smart homes, wearable devices, security monitoring, power tools, low-power energy storage and many other fields.

The reporter of E company noticed that Chengxin Micro was listed on the basic layer of the national small and medium-sized enterprise share transfer system. In November last year, Chengxin Micro announced that in order to further improve the efficiency of the company's business decision-making and reduce the company's operating costs, the company was terminated from the national small and medium-sized enterprise share transfer system.

Before the termination of the listing, the last financial report disclosed by Chengxin Micro showed that in the first half of 2023, Chengxin Micro achieved revenue of 82.5866 million yuan, a year-on-year increase of 9.23%; The net profit was 7.0243 million yuan, a year-on-year decrease of 7.54%. As of the end of the reporting period, the net assets of Chengxin Micro were 170 million yuan.

Xidiwei announcement shows that the merger and acquisition is a horizontal merger and acquisition, Xidiwei and Chengxin Micro are both integrated circuit design enterprises, Xidiwei's main products are integrated circuits serving the field of consumer electronics and vehicle electronics, with international main chip platform manufacturers, ODM manufacturers and Samsung, Xiaomi, Honor, Transsion, OPPO, vivo, Google, Lenovo and other consumer electronics terminal brand customers. Chengxin Micro has solid technical accumulation in all aspects of integrated circuit R&D, design, packaging and testing.

Compared with Xidiwei, Chengxin Micro adopts a direct sales-based sales model, has a strong sales team, has established a broad sales channel, and has accumulated customer resources in many fields such as automotive electronics, smart phones, smart homes, wearable devices, security monitoring, power tools, and low-power energy storage.

Xidiwei said that after the completion of this acquisition, the accumulation of sales channels and customer resources can increase the richness of the company's product categories, so as to fully tap the potential needs of Chengxin's existing customers, provide more complete solutions and corresponding products for customers in more downstream subdivided industries, and further improve profitability.

In terms of technology research and development, Xidi Micro will obtain the underlying technology of Chengxin Micro through this transaction, integrate the R&D system of Chengxin Micro, collaborate to carry out iterative development based on wafer factory process technology, and accelerate the iteration of more product solutions that can meet the needs of consumer electronics, automobiles, communications and industry, so as to further build a more complete product map and provide customers with richer product categories and solutions.

Xidiwei said that after the completion of this transaction, the company will incorporate the "mass consumption" market into the overall business development strategy of the listed company, and form a synergy with the company's advantages accumulated in the existing mobile phone, PC and wearable device market, and consolidate the company's industry position in the consumer electronics market. In addition, the company will give full play to the advantages of Chengxin Micro in the automobile, smart home, security, energy storage and other markets, conduct in-depth research on market demand, and combine the existing automotive and industrial chip products of both parties to provide customers with more complete overall solutions.

It is worth mentioning that Xidiwei has recently made frequent moves in mergers and acquisitions. In July this year, Xidiwei announced the acquisition of a total of 30.91% of the shares of Zinitix Co., Ltd., a listed company in South Korean integrated circuit design, for about 109 million yuan, and included it in the scope of consolidated statements. The latter's main products include touch controller chips, autofocus chips, touch driver chips, etc., and Xidiwei expects this move to broaden the company's technology and product layout.

The management of Xidiwei also made it clear in the reception of the survey recently that the management will continue to pay attention to the opportunities to absorb high-quality targets in the same industry under the condition of doing a good job in daily operation and management, and help the company to further expand and strengthen by combining organic growth and inorganic growth.