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Changdian Technology's acquisition of high-quality assets for RMB 4.47 billion was approved, and it will invest over RMB 3.9 billion in R&D and development of advanced packaging in three years

2024-08-13

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Yangtze Business Daily News● Yangtze Business Daily reporter Jiang Chuya

Changdian Technology, a leader in the packaging and testing field, spent 4.473 billion yuan to acquire SanDisk Semiconductor, which is a new progress.

On the evening of August 11, Changdian Technology (600584.SH) announced that the acquisition was approved by the Shanghai Minhang District Planning and Natural Resources Bureau. At the same time, the company received the "Decision on Non-Prohibition of Anti-Monopoly Review of Concentration of Operators" issued by the State Administration for Market Regulation.

A reporter from the Yangtze Business Daily noticed that in recent years, Changdian Technology has vigorously expanded advanced packaging, taking the lead in getting rid of the sluggish market, maintaining the stability of the company's profitability and cash flow acquisition capabilities, and achieving performance improvement.

In the first quarter of 2024, Changdian Technology achieved revenue of approximately RMB 6.842 billion, a year-on-year increase of 16.75%; net profit attributable to shareholders of the parent was approximately RMB 135 million, a year-on-year increase of 23.01%.

In order to enhance its core competitiveness in the field of semiconductor packaging and testing, Changdian Technology continues to increase its investment in R&D expenses. The company's R&D investment from 2021 to 2023 has reached 3.94 billion yuan. It has 3,013 patents and continues to maintain its leading position in the field of packaging and testing intellectual property. The number of valid patents in this field ranks second in the world.

Acquisition of 80% equity interest in SanDisk Semiconductor approved

On March 4 this year, Changdian Technology announced that its wholly-owned subsidiary Changdian Management intends to acquire 80% of SanDisk Semiconductor's equity in cash for approximately US$624 million (approximately RMB 4.473 billion). In order to promote the acquisition, on March 18, Changdian Technology also announced that the company intends to increase its capital in Changdian Management by RMB 4.5 billion.

According to the relevant provisions of the land use rights transfer contract signed by SanDisk Semiconductor and the transferor (i.e. the Shanghai Minhang District Planning and Natural Resources Bureau), "any changes in the capital contribution ratio structure of the land user and the equity structure of the project company (i.e. the target company) must be approved by the transferor in advance."

Recently, SanDisk Semiconductor received a letter of consent from the Shanghai Minhang District Planning and Natural Resources Bureau, agreeing to the proposed equity changes in the transaction.

At the same time, Changdian Technology stated that it had received the "Decision on Non-Prohibition of Anti-Monopoly Review of Operator Concentration" issued by the State Administration for Market Regulation, which decided not to prohibit the transaction and all parties to the transaction could continue to move forward.

Changdian Technology said that through this acquisition, the company can establish a closer strategic cooperative relationship with SanDisk Semiconductor's parent company Western Digital and enhance customer stickiness.

SanDisk Semiconductor is a high-quality asset. Founded in 2006, it is one of the world's largest flash memory storage product packaging and testing factories. It mainly engages in the packaging and testing of advanced flash memory storage products. Its product types mainly include iNAND flash memory modules, SD, MicroSD memory, etc. Its products are widely used in mobile communications, industry and Internet of Things, automobiles, smart homes and consumer terminals.

Steady performance and increased R&D

At present, Changdian Technology has grown into the world's third largest chip packaging and testing giant. According to the 2023 sales ranking released by the Global Outsourced Packaging and Testing (OSAT), Changdian Technology ranks third in the world and first among mainland Chinese companies, accounting for more than 10% of the global market share.

In recent years, Changdian Technology has vigorously expanded advanced packaging, taking the lead in getting rid of the sluggish market, maintaining the stability of the company's profitability and cash flow acquisition capabilities, and achieving performance improvement.

From 2017 to 2023, Changdian Technology's operating income increased from 23.856 billion yuan to 29.661 billion yuan, net profit attributable to shareholders of the parent company increased from 343 million yuan to 1.471 billion yuan, and gross profit margin increased from 11.72% to 13.65%.

In the first quarter of 2024, Changdian Technology's revenue was approximately 6.842 billion yuan, a year-on-year increase of 16.75%; net profit attributable to shareholders was approximately 135 million yuan, a year-on-year increase of 23.01%; and net cash flow from operating activities was 1.373 billion yuan, a year-on-year increase of 11.26%.

As a leading company in the field of packaging and testing, Changdian Technology has been actively expanding its industrial layout. In the field of high-performance advanced packaging, the company's XDFOI Chiplet high-density multi-dimensional heterogeneous integration series process has entered the stable mass production stage as planned. With the expansion of advanced packaging production lines, the demand for related equipment will also increase. Changdian Technology is expected to gain more market share in the tide of domestic substitution.

In order to enhance its core competitiveness in the field of semiconductor packaging and testing, the company continues to increase its R&D expenditure. From 2021 to 2023, it invested 3.94 billion yuan in R&D and has 3,013 patents, including 2,464 invention patents. In the first quarter of 2024, R&D expenses were 381 million yuan, a year-on-year increase of 23.40%.

In 2023, Changdian Technology will continue to maintain its leading position in the field of packaging and testing intellectual property, with the number of valid patents ranking second in the world and first in mainland China.