On June 9, Zhongying Electronics announced that its controlling shareholder, Weilang International Group Co., Ltd. (hereinafter referred to as “Weilang International”) and shareholder WinChannel Ltd. (hereinafter referred to as “Win Channel”) have signed a “Share Transfer Agreement” with Shanghai Zhineng Industrial Electronics Co., Ltd. (hereinafter referred to as “Zhineng Industrial”).
According to the announcement, Weilang International and Win Channel plan to transfer a total of 14.2% of the company’s shares at a price of 25.677 yuan per share, transferring 9.29% and 4.91% of their respective holdings, with a total transaction price of approximately 1.245 billion yuan. This transfer price represents a premium of about 21.5% compared to the closing price of 21.12 yuan on June 6, before the company’s suspension of trading.
After the transaction is completed, the controlling shareholder of Zhongying Electronics will change from Weilang International to Zhineng Industrial. Since Zhineng Industrial does not have an actual controller, the actual controller of the listed company will change from the original actual controller, Fu Qiming, to a status of “no actual controller”.
Industry insiders have stated that the lack of an actual controller will lead the company’s management to focus more on the overall interests of the company and shareholders, reducing interference from personal or family interests. However, during business integration, the unclear decision-making body may lead to reduced efficiency and increased communication costs, necessitating enhanced information disclosure to stabilize investor expectations and market confidence.
Zhineng Industrial was established in December 2020, with a registered capital of 2.446 billion yuan, positioned as a high-end intelligent industrial electronics platform enterprise group in China, mainly focusing on the layout and industrial ecosystem construction in the industrial and automotive chip fields. The main investors include the Shanghai Science and Technology Innovation Investment Group Guidance Fund (a Shanghai government investment platform), Wuyuefeng Science and Technology Innovation, and the Xuzhou government investment platform. Financially, as of the end of 2024, Zhineng Industrial’s total assets are approximately 5.17 billion yuan, with net assets of about 5.102 billion yuan and a debt-to-asset ratio of 1.32%; in 2024, it achieved revenue of approximately 206 million yuan and a net profit of about 9.35 million yuan.
Regarding the reason for the transfer of shares by the controlling shareholder, the announcement states that this equity change is based on Zhineng Industrial’s development strategy, aiming to gain control of the listed company due to its optimistic outlook on the company’s development prospects. After the completion of this equity change, Zhineng Industrial will legally exercise shareholder rights, actively participate in the decision-making of the listed company’s governance structure, improve the operating conditions of the listed company, enhance its profitability, and share the development results of the listed company with all shareholders.
Zhongying Electronics is a chip design company that operates under a fabless model, primarily engaged in the design, research and development, and sales of chips. Its main products include industrial-grade MCUs, battery management chips (BMICs), AMOLED display driver chips, and automotive-grade MCUs. In recent years, the revenue share of Zhongying Electronics’ industrial-grade MCUs has approached 60%, while BMICs account for about 30%.
Industrial-grade MCUs are the core of Zhongying Electronics’ business. In its 2024 financial report, Zhongying Electronics stated that from a market perspective, although the overall demand for household appliance MCUs is slightly increasing, many new competitors have entered the supply side, leading to pressure on the prices of household appliance MCUs. The company believes that the current competitive landscape with too many industry competitors will not become the norm, but it will still take time to gradually complete the process of survival of the fittest.
According to Zhongtai Securities, Zhongying Electronics is the absolute leader in the mainland household appliance MCU market, with a fully self-manufactured ecosystem for eight MCU products. There is still room for improvement in the share of large household appliances, and the expansion into automotive-grade MCUs is entering high-end applications. The company has been laying out AMOLED drivers and power management for many years, opening up growth space with brand customers.
The current actual controller of Zhongying Electronics, Fu Qiming, is a veteran in the semiconductor industry. According to the Q1 2025 report, Fu Qiming indirectly holds 6.311 million shares of Zhongying Electronics through Weilang International, accounting for 18.49% of the total share capital. Public information shows that Fu Qiming was born in 1958 and has been engaged in the integrated circuit design industry since 1983, having worked for well-known semiconductor companies such as United Microelectronics, Philips, and Novatek.
The MCU market is currently undergoing the largest adjustment cycle in history. During the chip shortage in 2021, MCU prices surged, and Zhongying Electronics’ performance also rose significantly. However, with the consumer market weakening and insufficient demand for electric vehicles, the MCU market quickly shifted from a supply shortage to an oversupply, leading to intensified price wars in the MCU market. Companies with insufficient competitiveness and cash flow are being accelerated out of the market.
Taking Zhongying Electronics’ performance as an example, the company sold a total of 885 million chips in 2024, an increase of nearly 9% year-on-year; however, the gross profit margin was 33.6%, a decrease of 2.01% year-on-year, due to the impact of intensified market competition leading to a decrease in selling prices that outweighed the decline in costs.
Disclaimer: Cover image/source from the internet, the article is a compilation from various sources for reference and communication purposes only, and does not constitute any investment/purchase advice. Investors act at their own risk based on this information.