Premium rate exceeds 800%! Dongwei Semiconductor plans to acquire a 408M yuan controlling stake in a loss-making chip company

Every Daily News reporter | ZHAO Linan | Every Daily News editor | ZHANG Jinhhe DONG Xingsheng

On March 24, Dongwei Semiconductor (SH688261, share price 74.03 yuan, market cap 9.07B yuan) released an announcement stating that the company plans to invest 408 million yuan to acquire 53.0921% of the equity of Shenzhen Huienengtai Semiconductor Technology Co., Ltd. (hereinafter referred to as “Huienengtai”).

After this transaction is completed, Huienengtai will become Dongwei Semiconductor’s controlling subsidiary and be included in the scope of the consolidated financial statements.

A reporter from The Paper Daily Economic News noted that the target company Huienengtai is still loss-making, while the valuation premium rate for this acquisition is as high as 818.72%.

Dongwei Semiconductor said that this move is intended to integrate both parties’ advantages in agreement chips and digital control IC fields, connect the entire “control—drive—execution” chain, and help the company upgrade its strategy from being a single power device supplier to becoming a one-stop system solutions supplier.

The target company remains loss-making

The financial information disclosed in the announcement shows that Huienengtai has been sustaining losses in recent years.

For 2024, Huienengtai’s net profit was -27.3973 million yuan, and its net profit after deducting non-recurring gains and losses was -31.4904 million yuan. Entering 2025, the target company’s loss-making situation continues. From January to October 2025, Huienengtai’s net profit was -17.3625 million yuan, and its net profit after deducting non-recurring gains and losses was -21.3505 million yuan.

As of October 31, 2025, Huienengtai’s total assets are approximately 146 million yuan, and its net assets are approximately 87 million yuan.

The transaction pricing is based on October 31, 2025 as the valuation benchmark date, and the market approach assessment results are used as the valuation conclusion. The report issued by the valuation institution Shanghai Dongzhou Asset Appraisal Co., Ltd. shows that the assessed value of Huienengtai’s shareholders’ total equity is 795 million yuan, with an assessed appreciation rate as high as 818.72%.

For such a high premium, Dongwei Semiconductor provided an analysis of the pricing rationale in the announcement. The company stated that as a Fabless (no-wafer-fabrication) chip design enterprise, Huienengtai has a lightweight asset structure and a low proportion of fixed assets; its enterprise value is more reflected in intangible factors such as technological capabilities, product platforms, customer onboarding, and future volume expansion.

Dongwei Semiconductor said that book net assets cannot sufficiently bear the intangible value above. In addition, by referencing the market approach valuation conclusion, it can more comprehensively and reasonably reflect the pricing characteristics of capital markets for growth-oriented chip companies—“commercialization progress + growth expectations.”

It is worth noting that this high-premium acquisition also brings certain financial risks to Dongwei Semiconductor.

In the announcement, Dongwei Semiconductor admitted that after the transaction is completed and Huienengtai is included in the company’s consolidated financial statements, goodwill of a certain scale is expected to be formed in the consolidated balance sheet. If the target company in the future fails to meet expectations in operating performance due to factors such as the macroeconomic environment and industry cycles, there may be a risk of goodwill impairment, which would have a negative impact on Dongwei Semiconductor’s current-period profit and loss.

In addition, Dongwei Semiconductor further disclosed that after completing this equity transfer, the company plans to continue acquiring the remaining state-owned shares held by the remaining state-owned shareholder (Xiamen Semiconductor Investment Group Co., Ltd.) through a public bidding and listing process, specifically the 5.3231% equity stake in Huienengtai. The company is currently actively negotiating with the relevant parties.

Stating it will produce positive effects in industrial synergy

Although the target company has not yet turned a profit and the acquisition premium rate is high, Dongwei Semiconductor places great expectations on the industrial logic and strategic synergy effects behind this acquisition.

Dongwei Semiconductor emphasized that the acquisition is aimed at integrating the target company’s technology and R&D resources, jointly tapping into industry growth potential, and cultivating new profit growth drivers.

From a business layout perspective, Huienengtai mainly engages in the definition, development, and commercialization promotion of high-performance analog and mixed-signal integrated circuits. Its core businesses cover two major areas: the USB Type-C ecosystem chain and digital power, focusing on the intelligent fast-charging product line and the digital power product line.

Dongwei Semiconductor said it will incorporate Huienengtai’s protocol chips and digital energy control ICs into its own product system to achieve deep industrial synergy.

Dongwei Semiconductor is full of confidence in the integration prospects after the acquisition. The company noted that Huienengtai has a core R&D team with nearly 20 years of experience in developing digital power, and many team members come from international top power IC design companies such as Analog Devices (ADI) and Texas Instruments (TI).

However, Dongwei Semiconductor also pointed out in the announcement the risk of business integration. “Due to differences in corporate culture and management methods, it remains possible that after this transaction is completed, the two parties may be unable to achieve efficient integration goals in day-to-day operations and business integration. The company will actively take relevant measures and plan and deploy integration across areas including management teams and management systems, so that the business of the company and the target company can continue to develop steadily, realize synergy effects, and reduce investment risks.”

In addition, Dongwei Semiconductor stated that this transaction still needs to be submitted to the company’s shareholders’ meeting for consideration and must meet the delivery and closing conditions stipulated in the agreement. Whether the transaction can obtain the relevant approval, authorization, or consent, and the timing for final completion, are all subject to uncertainty.

Reporter | ZHAO Linan

Editor | ZHANG Jinhhe DONG Xingsheng DU Bo

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