▎With high premium acquisitions, shrinking performance commitments, and the lingering shadow of a previous failed “merger”, what are the odds of Greenway Technology’s gamble into the semiconductor industry?
Author｜Zhou Jian
Editor｜Cao Shengyuan
This article was first published on the Titanium Media APP
After two months, Greenway Technology (301322.SZ) has finally released its acquisition plan for Jiangsu Damo Semiconductor Technology Co., Ltd. (hereinafter referred to as “Damo Semiconductor”).The transaction plan involves Greenway Technology using 530 million yuan of oversubscribed funds to acquire 51% of Damo Semiconductor’s equity through a combination of equity acquisition and capital increase, aiming to enter the hot semiconductor sector and create a second growth curve.However, behind this seemingly glamorous capital operation lies a thorny path: an astonishing appreciation rate of over 325%, a performance commitment that has shrunk compared to previous promises, and the recent failed “marriage” with Tianli Lithium Energy (301152.SZ) all cast a thick shadow of uncertainty over this gamble.
After the previous failed “marriage”
Greenway Technology’s swift connection
Greenway Technology’s acquisition of control over Damo Semiconductor primarily involves a combination of equity acquisition and capital increase. The company first spent 450 million yuan to acquire a total of 46.92% of Damo Semiconductor’s equity from six shareholders including Qiao Xiaodan, Sun Qingya, and Wang Jianan.Subsequently, Greenway Technology injected an additional 80 million yuan into Damo Semiconductor, obtaining an additional 7.6923% equity after the capital increase. The total investment of 530 million yuan secures a 51% stake, achieving control and consolidation. The funding source is entirely from IPO oversubscription funds.The announcement states that this acquisition aims to “break through the core business dilemma” and “seek a second growth curve”.According to Qichacha, Damo Semiconductor was established in 2017 and is one of the well-known domestic semiconductor front-end measurement and repair equipment companies. Damo Semiconductor’s products and services cover defect detection in both bright and dark fields, etching machines, and other front-end repair equipment, with the capability to support up to 14nm process technology, and some self-developed equipment has entered the customer verification stage.Notably, its customer base is quite impressive. According to the announcement, Damo Semiconductor has supplied or provided services to global leaders such as SMIC, TSMC, and GlobalFoundries.In terms of performance, Damo Semiconductor shows an overall growth trend. The announcement indicates that Damo Semiconductor’s revenue increased from 191 million yuan in 2022 to 278 million yuan in 2024 (CAGR 20.62%), and net profit rose from 47.75 million yuan to 64.93 million yuan (CAGR 16.62%).Despite good performance, the valuation is also quite high. Damo Semiconductor’s book value attributable to the parent company’s equity is 226.38 million yuan, with an assessed value of 963.80 million yuan, resulting in an appreciation rate of 325.74%.The transaction includes performance commitments for 2025-2027: net profits of no less than 70 million, 80 million, and 90 million yuan respectively. It is worth noting that this commitment is lower than the expected commitments when it was initially proposed to “marry” Tianli Lithium Energy, which had median commitments of 80 million, 90 million, and 102.5 million yuan.At the beginning of 2024, Tianli Lithium Energy signed a “Letter of Intent for Acquisition” with Damo Semiconductor. However, at the end of April this year, the long-awaited “marriage” between Damo Semiconductor and Tianli Lithium Energy was declared a failure, with both parties terminating the transaction citing “changes in the objective environment”.Surprisingly, just a month later, Damo Semiconductor quickly “turned to” Greenway Technology. This rapid “remarriage” pace, combined with the substantial reduction in performance commitments, raises multiple questions: Is it a compromise on transaction terms? Is there concern about the short-term prosperity of the semiconductor industry? Or is the target itself not fully meeting the previous buyer’s stringent scrutiny?Regardless of the answer, this “failed history” casts an undeniable shadow over Damo Semiconductor’s true value and the smooth progress of this transaction.
Abundant funds, weak core business, and capital anxiety
Despite the performance commitments being lower than those previously made by Damo Semiconductor, Greenway Technology is still eager to “marry” Damo Semiconductor, reflecting its anxiety over weak performance growth.Public information shows that Greenway Technology’s main products include golf carts, sightseeing vehicles, and electric patrol cars. The company went public on the Growth Enterprise Market in 2023 at a high price, raising nearly 1.7 billion yuan, becoming a focal point in the capital market that year. However, investors were disappointed as it could not escape the “listing is the peak” curse. In 2023, Greenway Technology’s revenue and net profit fell by 26.48% and 15.64% respectively; in 2024, the decline continued, with year-on-year drops of 23.15% and 45.98%. In the first quarter of 2025, the downward trend has yet to be reversed.Despite the continuous decline in performance, Greenway Technology has ample funds on hand. iFind shows that as of the end of the first quarter of 2025, there were still 1.97 billion yuan in cash on the balance sheet. Faced with the current situation where the core business has no way out, Greenway Technology is forced to spend aggressively in search of a way out.“External growth” has been the keyword in Greenway Technology’s annual reports for two consecutive years. Greenway Technology states, “The company places great importance on external development through equity investment and mergers and acquisitions, closely following the national strategic direction of focusing on developing new quality productivity, and using external development strategies through investment and mergers to assist the company in achieving leapfrog development and strategic layout in advanced industries.”Based on the aforementioned situation, at the end of 2023, Greenway Technology first invested 593 million yuan (accounting for 98.83%) to jointly establish an industrial fund with a private equity firm, initiating a “buy-buy-buy” mode. In 2024, the fund invested 187 million yuan in logistics material supplier Jianghua Jiuheng (holding 27.5%); in 2025, it invested 15 million yuan in strategic investment in the specialized and innovative “little giant” Hengqu Motor (holding 2.1866%, involved in new energy vehicles and industrial robot motors). However, currently, equity investments have not significantly boosted performance.On the other hand, in the face of plummeting stock prices, Greenway Technology has also launched buyback plans to stabilize the stock price. In 2024, the company launched two rounds of buyback plans, spending over 115 million yuan to repurchase and cancel over 5.48 million shares, stabilizing investor confidence.Ironically, while the company is striving to save itself, institutional shareholders have begun to show signs of retreat. A month ago, institutional investors, including Chuangyu Mingchen, announced plans to reduce their holdings by no more than 4.829 million shares (accounting for 3.39% of the total share capital) in the next three months. This undoubtedly adds another layer of gloom to Greenway Technology’s already pressured stock price and fragile market confidence.In a sense, Greenway Technology’s investment of 530 million yuan in controlling Damo Semiconductor clearly reveals its strategic intent to carve out a new territory in the hot semiconductor sector. This is both a bet to break through the bottleneck of performance growth and a projection of anxiety seeking reasonable returns on idle funds. Considering the shadow of the previous failed “marriage” with Damo Semiconductor still looms, whether this acquisition can be successfully completed remains to be observed.(This article was first published on the Titanium Media App)Recommended Hot Videos
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