Industrial Securities(SH:601377) Zheng Quan Zhi Xing·2025-08-04 16:22Core Viewpoint - The company is utilizing excess fundraising to acquire equity and increase capital in a semiconductor company, aiming to diversify its business and enhance growth opportunities in response to declining performance in its core electric vehicle segment [1][4][8]. Fundraising Overview - The company raised a total of RMB 229,311.39 million from its initial public offering, with a net amount of RMB 210,121.43 million after deducting related expenses [1][2]. - The company established a special account for managing the raised funds, ensuring proper oversight and usage [2]. Fund Usage for Investment Projects - As of June 30, 2025, the company has committed RMB 40,494.96 million for various projects, with RMB 30,721.97 million already utilized [3]. - Key projects include the construction of a research and development center and information technology infrastructure, with specific amounts allocated for each [3]. Excess Fund Utilization - The net amount of excess funds from the IPO is RMB 169,626.47 million, with significant portions allocated for share buybacks [4][6]. - The first phase of share buybacks utilized RMB 85.49 million, while the second phase used RMB 30.09 million, indicating a strategic approach to enhance shareholder value [5][6]. Acquisition of Semiconductor Company - The company plans to invest RMB 80 million in Damo Semiconductor to acquire a 7.6923% stake, aiming to gain a controlling interest of 51% post-investment [7][8]. - This acquisition is part of a broader strategy to transition from electric vehicles to the semiconductor industry, driven by declining performance in its core business [8][9]. Market Context and Growth Potential - The semiconductor equipment market in mainland China is projected to grow significantly, with a sales forecast of USD 49 billion in 2024, reflecting a 33.7% increase [8][9]. - The acquisition is expected to position the company favorably within the rapidly expanding semiconductor sector, leveraging Damo Semiconductor's established technology and customer base [9][10]. Financial Performance and Projections - Damo Semiconductor's revenue is expected to grow steadily, with performance commitments set for net profits of RMB 70 million, RMB 80 million, and RMB 90 million over the next three years [10][13]. - The acquisition is anticipated to improve the company's financial health and enhance its long-term profitability [10][12]. Governance and Integration Strategy - Post-acquisition, Damo Semiconductor will become a subsidiary, with plans for governance enhancements and integration of management practices to ensure operational continuity [12][14]. - The company aims to navigate potential integration challenges while maximizing the benefits of the acquisition [12].