Today, Longsys announced that it has reached an agreement with Powercheng Technology Co., Ltd. (hereinafter referred to as "Powercheng Technology"). The company intends to acquire the shares of Powercheng Technology through a newly established wholly-owned subsidiary in the future for US$131.6 million. Co., Ltd. (hereinafter referred to as "Powercheng Technology") wholly-owned subsidiary Powercheng Technology (Suzhou) Co., Ltd. (hereinafter referred to as "Powercheng Suzhou") 70% equity.



According to the announcement, on June 19, 2023, Shenzhen Zhongqihua Land Real Estate Assets Appraisal Co., Ltd. issued the "Shenzhen Longsys Electronics Co., Ltd. intends to pay cash to purchase the equity of Licheng Technology (Suzhou) Co., Ltd." Value Project Asset Valuation Report. According to the assessment, the book value of Powercheng Suzhou’s total assets on the base date is 500.2645 million yuan, the book value of total liabilities is 69.9912 million yuan, and the book value of net assets is 430.2733 million yuan.

The recent main financial data of Powercheng Suzhou are as follows:



Announcing two mergers and acquisitions within one month, Longsys increased packaging and testing manufacturing

Longsys completed its capitalization and listing in August last year. As of the date of publication, the market value of Longsys has exceeded 40 billion, and it has announced two acquisitions of advanced packaging manufacturers within this month.



On the 13th of this month, Longsys announced that through its subsidiary Lexar Europe B.V., the company will purchase SMART Modular Technologies do Brasil‐Indústria e Comércio de Componentes Ltda. (referred to as "SMART Brazil") and its wholly-owned Subsidiary SMART Modular Technologies Indústria de Componentes Eletrônicos Ltda. (referred to as "SMART Modular", and SMART Brazil collectively referred to as the "target company" or "target company") 81% equity.

It is reported that the SMART Brazil factory is an important packaging and testing factory in South America, and it is also a springboard for entering the South American market. Longsys announced that the transaction will enable the company to further expand the Brazilian market, enhance long-term profitability, and strengthen shareholder returns.

After half a month, Longsys once again announced the acquisition of Powertech Suzhou. Powercheng Suzhou's main business includes chip packaging, testing and placement, and its main products involve flash memory chips, memory chips and logic chips.

It is reported that the former parent company of Powertech Suzhou, Powercheng Technology, is the world's largest third-party memory chip packaging and testing manufacturer, and its memory chip packaging and testing technology and technology are world-leading.


Shareholding structure chart of Powercheng Suzhou

The official announcement of two blockbuster acquisitions within one month shows Longsys' determination and strength to increase its packaging and testing business.

Longsys said, "Through this acquisition, Longsys will further enhance the packaging and testing capabilities of memory chips, improve the layout of the industrial chain, and strengthen business cooperation with memory wafer manufacturers. In terms of improving product quality, strengthening comprehensive cost advantages, and flexible customization Product specifications, rapid response to customer needs and other aspects form a joint force with Licheng Suzhou to enhance the company's core competitiveness and market influence, realize the strategic transformation from a storage technology brand to a semiconductor storage brand company, and continue to enhance the company's profitability and enhance shareholders. return."

It is expected that the storage market in Q3 will stabilize in an all-round way, and Longsys is preparing for the next round of market

Up to now, the oversupply of the storage market has lasted for a year, and the endless market trend has made the industry chain enterprises miserable. The same is true for Longsys. Its Q1 financial report shows that its performance revenue was 1.481 billion, a year-on-year decrease of 36.42%, the net profit attributable to shareholders of listed companies was a loss of 280 million, a year-on-year decrease of 273.01%, and its operating profit loss was 349 million, a year-on-year decrease of 285%. The net cash flow from operating activities was -456 million, a year-on-year decrease of 38.06%. During the period, research and development expenses were 93.94 million, and inventory was 3.672 billion.



Since Q2, the storage market has entered a difficult bottoming stage under the game of ultra-high profits & inventory pressure of original manufacturers and bleak terminal demand. For the upcoming Q3, the original factory, which is under huge business pressure, has decided not to continue to cut prices, and has already started to increase the price of some DDR and NAND flash resources in the spot market in May, but because most of the downstream module factories The inventory is high, and the market flow rate has not improved significantly, so it is more difficult to implement, but the eagerness of the original factory to increase the price is already obvious.

According to CFM flash memory market data, the price decline of DDR and Flash wafer in the spot market has been significantly reduced, and the performance of some products is stable.



In terms of terminals, the inventory of mobile, server, and PC major customers has dropped significantly to a healthy level. In the second half of the year, new machine releases will be launched, and production reduction measures will gradually take effect. Therefore, it is expected that the storage market will stabilize in Q3, and some product prices will increase.

At such a time when the market is stabilizing, Longsys, which has completed its capitalization and listing, has successively acquired two major packaging manufacturing factories under its command, expanding its overseas territory and strengthening its manufacturing capacity, which will undoubtedly add weight to the next round of industry cycles! On the other hand, with the help of Powertech Suzhou and SMART Brazil factories, Longsys also has more room to play in the capital market.