Huaxing Optoelectronics accepts 75% stake in Shenzhen Huaxian in the small and medium screen field

On July 31, Huaying Technology announced today that the entire shareholding of Shenzhen Huaying Display Technology Co., Ltd. under the company will be priced at 334.5 million yuan, and the company will transfer 75% equity of Shenzhen Huaxian to Huaxing Optoelectronics. Yingbai Muda and Huaying Nao transferred their respective 25% stake in Shenzhen Huaxian to Hong Kong Huaxing. In the end, Huaxing Optoelectronics quickly cut into the field of small and medium screens and display modules by means of transfer of management rights.

As TCL's current growth is the most significant business segment, the rumors of the expansion of Huaxing Optoelectronics have been around for a long time. The market has long rumored that Huaxing Optoelectronics is seeking to expand production in Shenzhen, in order to keep up with the high visibility of the display industry. However, the company has always been cautious about this, and clearly stated in the previous institutional survey that Huaxing Optoelectronics has no new capacity this year.

Investment bankers revealed that Huaxing Optoelectronics has been planning for expansion and expansion for a long time. It is rumored that Huaxing Optoelectronics once wanted to build a new production line in Shenzhen or a central city, but this person believes that BOE’s recent huge increase has triggered the market. Strong reaction, and the cost of the new production line is huge, and the yield rate is slow. Finally, Huaxing Optoelectronics chose the relatively modest way of transferring the management rights of the production line.

The source revealed that the target company is opposite the Huaxing Optoelectronics Factory and currently produces TV modules and other display services. After the completion of the acquisition, Huaxing Optoelectronics will not rule out the adjustment of its business structure, and transfer some of its production capacity to the hot medium and small screen and module business.

The small and medium-sized screen field has always been the strength of Huaying Technology, and Huaxing Optoelectronics's thirst for the small and medium-sized screen market stems from the rapid growth of related businesses. According to the production and sales data released by TCL, the company's smartphone business has experienced an inflection point in the second quarter of this year. The explosive growth of domestic smart phones in this year will bring market opportunities to TCL's low-end mobile phone business. Because TCL has a tradition of operating in the entire industry chain, only one 8.5-generation line of Huaxing Optoelectronics can not support its capacity demand, and expansion has become a top priority for the company.

Analysts believe that Huaxing Optoelectronics's move is more secure, because Huaying's major shareholder is Taiwan's CPT, and many of Huaxing Optoelectronic's technology executives are also from Taiwan. After Huaxing Optoelectronics enters the business, the business switch will be faster.

Benefiting from the high-profile of the small and medium-sized screen industry, Huaying Technology's 2013 semi-annual report showed that the company achieved revenue of 1.348 billion yuan in the first half of the year, an increase of 97.82% year-on-year; net profit attributable to shareholders of listed companies was 187 million yuan, an increase of 38.03%.

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