The announcement shows that Zhaochi's current core display business is mainly distributed in Shenzhen Jingxian and its subsidiary Jiangxi Zhaochi Crystal Display Co., Ltd. (hereinafter referred to as "Jiangxi Jingxian"). There are differences in functions between the two parties. Through internal business integration, the company's display business can be integrated with research, production, and sales, further strengthening the management effectiveness of each business segment and improving operational efficiency.
In this transaction, Shenzhen Jingxian intends to transfer the equity of Jiangxi Jingxian held by Zhaochi Shares. The equity transfer ratio is 100%, the corresponding capital contribution is RMB 50 million, and the total transaction price is RMB 70 million. After the transaction is completed, Jiangxi Jingxian will become the holding subsidiary of Zhaochi Co., Ltd., and Jiangxi Jingxian and Shenzhen Jingxian will still be included in the company's consolidated statements.
It is reported that Shenzhen Jingxian's main business is the design, development, manufacturing and sales of Mini displays. As of December 31, 2023, Shenzhen Jingxian's total assets were 289.4655 million yuan, total liabilities were 137.3197 million yuan, and net assets were 15,2.1458 million yuan; operating income of 622.0043 million yuan and net profit of 32.3562 million yuan.
Jiangxi Jingxian was established on April 20, 2015. Its main business is the manufacturing and sales of display devices, communication equipment, electronic components, etc. As of December 31, 2023, Jiangxi Jingxian's total assets were 774.8783 million yuan, total liabilities were 725.4031 million yuan, net assets were 49.4752 million yuan; operating income was 471.7769 million yuan, and net profit was 5.5202 million yuan.
Zhaochi Co., Ltd. stated that this company’s internal business integration matter is in line with the company’s overall development plan and aims to optimize the operating structure and resource allocation of the company’s display business, promote better development of the company’s display business, and improve the company’s operating efficiency. After the completion of this internal business integration, it will help enhance the vitality and competitiveness of the enterprise.
It is understood that Zhaochi Co., Ltd. was established in 2005. It emerged in the TV ODM business. In recent years, it has actively deployed the LED industry and continued to expand upstream and downstream of the industry chain. At present, Zhaochi Technology has established a diversified business structure including smart displays, smart home networks and the entire LED industry chain.
In terms of performance, in the first half of 2024, Zhaochi Co., Ltd. achieved operating income of 9.520 billion yuan, a year-on-year increase of 23.07%; the corresponding net profit attributable to the parent company was 911 million yuan, a year-on-year increase of 24.04%. The main driving force for performance growth comes fromTwo aspects: first, the deep synergy of the entire LED chain; second, the expansion of overseas markets for TV ODM business.
In terms of the LED industry chain, Zhaochi Technology accelerated the miniaturization process of Mini RGB chips in the first half of the year, significantly increasing the penetration rate of Mini COB in the P1.5 and above point pitch market. As of the first half of 2024, Zhaochi Crystal Display's monthly production capacity has reached 16,000 square meters, and its shipments account for more than 50% of the COB industry. On July 9, Zhaochi Co., Ltd. said in an institutional survey that new production lines are gradually coming into the market, and it is expected that the company's COB monthly production capacity will exceed 20,000 square meters in September.
As Zhaochi promotes the vertical integration of its display business, the allocation and utilization of resources will be more efficient and precise in the future, further strengthening its core competitiveness in the COB field and moving towards the strategic goal of "the world's largest COB panel factory".
ANNA