Furi Electronics acquires Yuanlei for RMB 120 million to build a link between the entire LED industry

Furi Electronics announced on the 24th that it will acquire 51% of the equity of Yuanlei Technology for a total price of 119.85 million yuan by transferring part of the equity and increasing capital. Among them, 40.9487% of the equity of Yuanlei Technology held by Pingxiang Yuanlei Asset Management Partnership (Limited Partnership) was transferred for 79.85 million yuan (the capital contribution was 12.28461 million yuan); after the transfer was completed, a unilateral capital increase of 40 million yuan was made to Yuanlei Technology (the capital contribution was 6.153846 yuan). After the completion of this transaction, the registered capital of Yuanlei Technology was changed to 36.153846 yuan, and the company held a total of 51% of its equity.

According to data, Yuanlei Technology focuses on the field of LED lighting packaging and is engaged in the research, development, production and sales of small and medium-power LED lighting packaging devices. The more distinctive product is LED filament, which is mainly used in high-end places such as crystal chandeliers, candle lights, and wall lamps. Currently, Yuanlei Technology has applied for 2 international patents and 21 Chinese patents.

From January to June 2014 and 2013, the company achieved net profits of 14,303,189.30 yuan and 8,409,902.62 yuan. The transferor guarantees that the net profit attributable to the parent company (excluding non-recurring gains and losses) in 2014, 2015 and 2016 will be no less than 29 million yuan, 34 million yuan and 40 million yuan respectively, for a total of 103 million yuan. Otherwise performance compensation will be made.

According to the "Letter of Intent for Equity Acquisition" signed by Furi Electronics and the shareholders of Shenzhen Yuanlei Technology Co., Ltd. on August 21, Furi holds 51% of the equity of Yuanlei Technology through acquisitions and capital increases. Yuanlei Technology has a paid-in capital of 30 million yuan and focuses on the R&D, production and sales of small and medium-power LED lighting packaging.

According to the first three quarters of 2014, Furi Electronics achieved a net profit of 51.2921 million yuan, a year-on-year decrease of 50.78%; after deducting non-recurring gains and losses, the company's actual loss was 47.32 million yuan, a slight decrease year-on-year. From January to September, the company achieved operating income of 2.024 billion yuan, a year-on-year increase of 13%; earnings per share were 0.19 yuan.

In this regard, Furi Electronics said that the decline in net profit was mainly due to the decrease in investment income from reducing its holdings of Huaying Technology stocks.

In addition, Furi Electronics’ third quarter report found that Fujian Electronic Information (Group) Co., Ltd., as the actual controller of Furi Electronics, stated that it will use Furi Electronics as the only business platform it controls to engage in LED packaging, application products and engineering projects.

It promises that within three years from the date of issuance, if it is determined or reasonably expected that Fujian Cross-Strait Lighting Energy Saving Technology Co., Ltd. will achieve an annual net profit of 10 million yuan, or as a shareholder of Fujian Zhaoyuan Optoelectronics (holding 36.52%), after the Zhaoyuan Optoelectronics LED epitaxial wafer (MOCVD) project completes the total investment and begins to generate benefits, it will transfer all its equity interests in Zhaoyuan Optoelectronics to Furi Electronics.

After the completion of this equity acquisition, it will fill the gap in the company's LED lighting packaging business, complement the company's existing LED display packaging business, further strengthen and improve the existing LED packaging business, and help the company provide customers with more comprehensive LED integrated application solutions and improve the company's comprehensive competitiveness.