Core Viewpoint - Xinhau Optoelectronics plans to transfer 100% equity of its wholly-owned subsidiary, Xinguang Energy Technology (Anhui) Co., Ltd., to Luxshare Precision, marking an associated transaction due to familial ties between shareholders [1] Group 1: Transaction Details - The transaction aims to optimize the company's industrial layout and resource allocation, allowing Xinhau Optoelectronics to focus on its glass protective screen business and develop independent frequency modulation energy storage projects [1] - Luxshare Precision is recognized as an associated legal entity of Xinhau Optoelectronics, as a significant shareholder's family member is a key controller of Luxshare [1] Group 2: Market Reaction - On June 23, Xinhau Optoelectronics' stock rose over 6% during trading, closing with a slight increase of 2.74% [2] - Previous associated transactions between Xinhau Optoelectronics and Luxshare Precision include a deal in August 2022, where Luxshare's subsidiary acquired 100% equity of Xinhau Optoelectronics (Dongguan) for 52.47 million yuan, which provided Xinhau with a net profit of 5.76 million yuan [2] Group 3: Company Performance and Challenges - Xinguang Energy, the target of the current transaction, is a newly established company focused on smart energy solutions, including manufacturing and sales of new energy drive equipment and photovoltaic devices [3] - The photovoltaic industry faced significant challenges in 2024, with oversupply and weak demand leading to a sharp decline in product prices, impacting profitability across the sector, including Xinhau Optoelectronics [3] - Xinhau Optoelectronics reported a revenue of 1.687 billion yuan in the previous year, a year-on-year decrease of 2.72%, and a net loss of 353 million yuan, a staggering decline of 972.54% [3] - In Q1 2025, the company recorded a revenue of 421 million yuan and a net loss of 105 million yuan, reflecting a year-on-year decline of 270.31% [3]