TCL spends 3.75 billion US dollars in half a year. M&A or “leakage” Samsung?

In half a year, he lost more than 20 cattle and was questioned at the shareholders’ meeting for the first time in his life. It’s better than Li Dongsheng, because it was a dark moment like that.

Saturday, November 14, 2020, 2:55  GMT

At the moment, because of the collapse of overseas mergers and acquisitions, TCL faced the test of life and death.

“I’m really going to do it once again and I’m going to do better.” Looking back at the risks of the year, Li Dongsheng once said.

In 2020, TCL made good use of its strength with the rapid reshuffling of the panel sector and the freezing winter of the economy depressing asset prices. “TCL spent more than 20 billion in successive mergers and acquisitions and transactions throughout the year and was reported to engage in the “Huawei’s Divestiture of Glory” 100 billion programme.

The persistent Li Dongsheng has decided to do it again but will he do better this time?

On 12 November, TCL Technology (000100.SZ) released the “Notice of Issuance of Performance of Securities, Convertible Corporate Bonds and Payment of Cash to Buy Properties and Adjustments in Shares and Completion of Registration of Convertible Corporate Bonds” and other similar announcements, marking the acquisition of Wuhan Huaxing Optoelectronics Technology Co., Ltd. (hereinafter referred to as 39.95 percent equity) (hereinafter referred to).

Service with daily money, shattered 24.8 billion in half a year

There were rumours on the market before and after that Huawei was preparing to box the whole Honor cell phone company and sell it at a price of around 100 billion yuan, while TCL Technology is included in the “small shareholder camp” representative of the buyer.

TCL Technology has reacted to its involvement in the acquisition of Glory, according to previous reports from China Business News reporting that it might recently make an announcement to react to market rumors. Nevertheless, on the 12th, Yema Finance called TCL Technology, and the other party replied: “Or the delegate may or may not post a note.” It also claimed that I have never heard of this matter (participating in the acquisition).” That is just media gossip. ”

The response from TCL Technology is not hard to comprehend. “Liang Zhenpeng, a senior industrial economic analyst, also told Yema Finance, “With the funding status of TCL, it will not be the dominant one even though it participates in a trade involving 100 billion. ”

In recent years, looking back at TCL Technology especially a series of capital operations since 2020, “spending money” has become the main theme, and it is possible to imagine the capital situation.

A strategic collaboration agreement with San’an Semiconductor was signed by TCL China Star, a subsidiary of TCL Technology, at the beginning of March 2020, announcing the establishment of a joint laboratory to improve micro-LED display technology and its engineered chip production, transport, detection, repair and other key technologies. It is announced that the two parties will jointly spend 300 million yuan in the creation of a joint laboratory with a registered capital and that 55 per cent of the registered capital will be contributed by TCL Huaxing.

In May, TCL Capital, a TCL Technology subsidiary, announced the purchase of a 39.95% stake in Wuhan Huaxing for 4.2 billion yuan, launching strategic investor Hengjian Holdings to promote the independent research and development of Wuhan Huaxing’s technology in the area of high-end smartphones and handheld PC display screens.

Among others, the company plans to pay 47.43 percent of the transaction consideration by selling shares or 2 billion yuan; to pay 14.23 percent of the transaction consideration by issuing convertible corporate bonds or 600 million yuan; and to pay 38.34 percent of the transaction consideration in cash. 1,617 billion yuan, that is.

TCL Huaxing reported in June that it plans to invest 30 billion yen (approximately 2 billion yuan) in a Japanese firm named JOLED to start in-depth technological cooperation and bet on a new printed OLED track.

TCL Technology invested 10.974 billion yuan immediately after July to beat powerful rivals such as IDG Capital and declined to acquire 100% of Zhonghuan Group’s equity, officially joining the semiconductor silicon materials market.

According to data from the financial report, Zhonghuan Group’s gross assets were 49.11 billion at the end of 2019 and total annual sales were 16.88 billion. At the time, the market cap of its listed firm, Zhonghuan, was close to 80 billion, while the market value of TCL Technology was almost equal to 87 billion.

The step by TCL Technology was viewed by the outside world as a “snake eating elephant” and Samsung’s “acceptance” has since received worldwide interest.

In August, TCL Huaxing invested 7.6 billion on the purchase of Samsung Electronics Suzhou LCD 60% of S-LCD Technology Co., Ltd. and Suzhou Co., Ltd. 100% shares. At the same time Samsung raised TCL Huaxing’s capital and became the latter’s second largest shareholder. TCL Huaxing and Samsung will seek closer strategic partnership after the deal is concluded.

“TCL is comparatively backward in technology from a technological point of view in the area of OLED display panels compared to South Korean Samsung, LG and other manufacturers, and there is still a big difference,” said Liang Zhenpeng. He claims Samsung and LG’s key energy is currently committed to the next wave of display technology, specifically the field of OLED display.

The justification why Samsung sold its Suzhou factory to TCL is that the manufacturing capacity of the LCD is now obsolete. Domestic BOE and TCL have less technological assets in the OLED sector compared with Korean firms. “BOE only has a little more, and the stocks of TCL are very limited. TCL technology is in a poor spot, because of the display technology of OLED display panels, upstream products, etc. “

Li Dongsheng also said at the beginning of 2020 that Chinese companies will dominate the LCD (liquid crystal panel) market in the future, but a lot of work is still needed to keep up with and overtake South Korean companies such as Samsung in the OLED field.