GREE 2 Billion Inbound Three Security Photoelectric: Sword Finger Chip Cooperation

600703.SH, the long sleeve dance, has made a big move in the cold winter of LED.

According to the November 12th announcement, San an optoelectronics has proposed an increase of 7 billion yuan to invest in the semiconductor R & D and industrialization project to fill the gap in China.

It is worth noting that the refinancing of the San an photoelectric Co., Ltd. is dominated by the pioneer high core and GREE electric appliances (000651.SZ). Among them, the pioneer Gao Xin intends to subscribe for 5 billion yuan, and GREE electric appliances intends to subscribe for 2 billion yuan.

"Pioneer Gao Xin is an industrial investment fund of the local government of Changsha. I hope we will grow stronger and stronger in the past (to Changsha)." San an photoelectric relevant person in charge of the afternoon of November 12th to the twenty-first Century economic report reporter said, "GREE Electric is now only the capital level cooperation, this is the first step, and also the future chip cooperation bond."

Investment and capacity expansion

The successful implementation of the increase will be the largest refinancing in the history of San an.

San an photoelectric Bulletin shows that the total investment of the semiconductor R & D and industrialization project (phase I) is 13 billion 805 million yuan, which is mainly composed of three major business plates, gallium nitride, gallium arsenide and special packaging. The construction period is 4 years, the production period is 7 years, the annual sales income is expected to reach 8 billion 243 million 933 thousand and 200 yuan (excluding tax), and the annual net profit of production reaches 1 billion 991 million 767 thousand yuan.

This is no doubt an astonishing figure.

Public information shows that, as a leading LED in China, the highest peak of San an's photoelectric performance was in 2017, when net profit was 3 billion 164 million yuan, and the annual net profit of the above projects was 62.96% of its highest annual performance.

But the big project of San an photoelectric is more than that.

The semi annual report in 2019 showed that Sunan optoelectronics decided to invest in the establishment of a subsidiary company in Gedian economic and Technological Development Zone of Hubei province. The main production and operation of Mini/Micro LED epitaxy and chip products and related applications were R & D, production and sales, with a total investment of 12 billion yuan, and Hubei San an photoelectric Co., Ltd. has obtained a business license.

"Hubei Sunan will produce chips for the next generation of display technology, and has begun building factories." The foregoing three an photoelectric related person in charge told the twenty-first Century economic news reporter.

According to Hubei media reports, the project is China's first large-scale micro LED chip project, started construction in July 29th of this year. Prior to the public information, the project strives to achieve production within 48 months. The first phase of investment will complete the project construction and put into operation in 24 months. It is estimated that the annual sales revenue will be 7 billion 200 million yuan, the total profit will be 1 billion 784 million yuan, and the tax revenue will be 930 million yuan.

Semi annual report also revealed that the San an semiconductor project of San an optoelectronics was successfully promoted in Quanzhou, and some equipment entered the installation and commissioning phase. It is expected that some of the capacity will be released gradually in the second half of the year.

It is said that the total investment of Quanzhou San an semiconductor project is 33 billion 300 million yuan, and 7 industrial projects have been built. In this way, the development of high-end LED substrates, epitaxy and chips has been realized. The project was officially launched in December 26, 2017. All projects are expected to be put into operation in 5 years, and all projects will reach production in 7 years, and the annual sales income will reach 27 billion yuan.

"At present, the equipment for phase I of the Quanzhou project is being installed, some of which are already being tested." The above three optical and electrical responsible person said.

And San an optoelectronics also has a major project of national IC industry fund.

Historical Bulletin shows that the National IC industry fund has become the second largest shareholder of San an optoelectronics industry with a 11.3% stake, thus achieving an integrated circuit project of 3 billion yuan.

"Under the background of Sino US trade friction, the market demand for domestic chips is very strong. It is expected that the company's IC will have a big breakthrough next year." The above three photoelectric related responsible person said.

However, the performance of the San an optoelectronic company, which has been expanding, has broken off the momentum of high growth for 5 consecutive years from 2018. It dropped by 10.56% compared with the same period last year. The first three quarters of this year also dropped 55.57%.

And the inventory of San an photoelectric is climbing the peak of history, reaching 3 billion 268 million 394 thousand yuan as of the end of the three quarter of this year.

Synchronous layout of local state capital and household appliance giant

San an optoelectronics opens and refinancing, and GREE Electric has a huge sum of money to subscribe.

"This project (raise investment project) is related to silicon carbide, and there will be much room for future market development." The foregoing three an photoelectric related person in charge told the twenty-first Century economic report reporter.

The GREE electric November 12th announcement also said that the strategic equity investment in San an photoelectric will help the central air-conditioning, intelligent equipment, precision mold, photovoltaic and energy storage plate to enter the semiconductor manufacturing industry, and at the same time, it can further enhance the company's technological accumulation in related fields by developing research and development in the semiconductor field with San an photoelectric.

Prior to this, GREE Electric has invested 3 billion yuan to participate in 600745.SH acquisition of the world's leading semiconductor standard device supplier NexperiaHoldingB.V. (Group) project. After the completion of the transaction, GREE electric became the shareholder of Wen Tai Technology 3.45%.

The participation of San an photoelectric increased, although GREE electric invested 2 billion yuan, but after the fixed increase, the three security optical and electrical shares were 4.76%, not related, leading high core equity was 11.9%.

"The cooperation between the company and GREE electric on chip is still under discussion, and there is no way to make a clear explanation now." The above three optical and electrical responsible person said, "GREE's future frequency conversion air conditioning and smart home needs RF chip, induction chip (face recognition chip) and so on, which are complementary to San an photoelectric, and the two sides have been negotiating specific cooperation plans."

GREE electric also said that the San an photoelectric is the leader of the LED chip, and has the first advantage in the field of compound semiconductors.

The appliance giant chose to cooperate with San an and 000333.SZ. In March 26th this year, the United States Group announced the establishment of the third generation semiconductor joint laboratory with the San an integrated circuit of the San an photoelectric company, claiming that the two sides jointly developed a reasonable way to import third generation semiconductor power devices into white appliances.

And San an optoelectronics is stepping out of the shadow brought about by the controlling shareholder's dilemma. Perhaps in order to cooperate with the fixed increase refinancing, the San an photoelectric announced at the same time in November 12th, it will extend the duration of the 1 billion 200 million yuan and second period ESOP from the floating loss to the floating surplus, extending the period from one year to December 9, 2020.

In addition to the lead of local state capital, Gao Xin and GREE electric invested heavily in the decline of the photoelectric performance of San an, and the San an group, the largest shareholder of the San an photoelectric giant, was also rescued by the assistance of local state assets.

According to the October 1st announcement, the Changjiang Anxin industrial investment fund partnership (limited partnership) under the state owned capital of Hubei has invested 5 billion 960 million yuan in the money to the San an group. At the beginning of the year, the San an photoelectric announced that the local financial institutions in Fujian will increase their capital to the San an group not less than 5 billion 400 million yuan and provide 600 million yuan of liquidity support.

The latest announcement of the lifting of the equity pledge shows that the proportion of San an photoelectric stock held by the San an group and its subsidiary, San an electronic pledge, has decreased from 82.45% to 51.82% at the peak time.

And Guoxin Securities and other research reports pointed out that the current supply and demand structure of LED chip has shown some improvement, showing signs of bottoming.