9.32B yuan, TCL Technology makes another move

After investing 11.5 billion yuan to buy back part of the equity in Shenzhen Huaxing Semiconductor (hereinafter referred to as “Shenzhen Huaxing”), the industry leader TCL Technology has once again taken action.

On March 30, TCL Technology (000100.SZ) issued an announcement stating that it plans to acquire 45% of the equity in Guangzhou Huaxing Optoelectronic Semiconductor Display Technology Co., Ltd. (hereinafter referred to as “Guangzhou Huaxing”), which is jointly held by Guangdong Hengjian Investment Holding Co., Ltd. (hereinafter referred to as “Hengjian Investment”), Guangzhou Chengfa Xingguang Investment Partnership (Limited Partnership) (hereinafter referred to as “Chengfa Investment”), and Science City (Guangzhou) Investment Group Co., Ltd. (hereinafter referred to as “Chengfa Investment”) in total, by way of issuing shares and paying cash.

According to the announcement, the total consideration for this transaction is 9.325 billion yuan, of which approximately 4.662 billion yuan will be paid in cash, and approximately 4.662 billion yuan will be paid in shares.

The cash consideration portion will be resolved through a fund-raising of supporting capital. TCL Technology plans to issue shares to no more than 35 specific target parties to raise supporting funds, with the total amount not exceeding 4.662 billion yuan, which will be used to pay the cash consideration and related expenses for this transaction. TCL Technology states that the supporting fund raising will help reduce the pressure of cash payments and improve financial flexibility. If the funds raised through the supporting financing are insufficient or the issuance fails, the company will complete the payment using its own funds or funds raised on its own.

Without considering the supporting fund raising, after the completion of this transaction, the transaction counterparties—Hengjian Investment, Chengfa Investment, and Science City Investment—will respectively hold 2.84%, 0.85%, and 1.42% of TCL Technology’s shares, for a total shareholding ratio of 5.11%. The combined shareholding ratio of TCL Technology’s Chairman Li Dongsheng and his persons acting in concert will be diluted from 6.09% before the transaction to 5.78%, but will continue to maintain the position of the largest shareholder. TCL Technology will still maintain an equity structure without a controlling shareholder or actual controller.

As the target of this transaction, Guangzhou Huaxing was established in December 2020 and is an important semiconductor display business entity under TCL Technology. Financial data shows that in 2024 and 2025, Guangzhou Huaxing’s operating revenue was 8.248 billion yuan and 16.039 billion yuan, respectively, and its net profits were 274 million yuan and 1.158 billion yuan, respectively. TCL Technology is Guangzhou Huaxing’s main customer, and in 2025, nearly 90% of Guangzhou Huaxing’s revenue came from TCL Technology.

According to publicly available information, as of now, Guangzhou Huaxing has 3 core production lines (t8, t9, t11), all of which are high-generation advanced display production lines.

Among them, the t8 production line is an 8.6-generation printed OLED display panel production line (the world’s first large-scale mass-production line). It is currently under construction and is expected to achieve mass production in the second half of 2027. It focuses on the high-end OLED display field for mid-sized panels. The t9 production line is an 8.6-generation oxide semiconductor new display device production line; it has been officially put into operation. As the first domestic high-generation LCD panel production line specifically dedicated to producing high-end IT products and professional displays, it has already achieved full-capacity operations. The t11 production line is an 8.5-generation TFT-LCD production line. It was renamed after TCL Huaxing acquired the LG Display (LGD) Guangzhou factory in South Korea, and is mainly used to produce large-size LCD panel products for TVs and commercial display applications.

It is worth noting that the semiconductor display industry is well known for its high investment. Building a single high-generation production line can cost several hundred billion yuan. During the period of capacity expansion, companies face enormous capital pressure, and it is difficult to support it solely with self-owned funds. Therefore, a mature financing model has gradually formed in the industry: during the production line construction stage, external capital such as local state-owned capital is introduced, and after the production line matures, the equity is gradually repurchased.

The evolution of Guangzhou Huaxing’s equity follows this path. In June 2021, Guangzhou Huaxing increased its capital and expanded its shareholding, introducing three strategic investors—Hengjian Investment, Chengfa Investment, and Science City Investment—and increasing its registered capital from 5 billion yuan to 175 billion yuan. After that, the target company’s equity experienced two rounds of internal transfers. Before this acquisition, TCL Huaxing, Hengjian Investment, Chengfa Investment, and Science City Investment held 55%, 25%, 7.5%, and 12.5% of Guangzhou Huaxing’s shares, respectively. After the completion of this transaction, TCL Technology’s direct and indirect equity interest in Guangzhou Huaxing will increase from 55% to 100%, achieving wholly-owned control.

In its announcement, TCL Technology said that this acquisition will be conducive to further strengthening the listed company’s principal business and enhancing its core competitiveness in the semiconductor display industry. According to the pro forma financial statements, after the transaction, the net profit attributable to the parent company’s shareholders will increase from 4.517 billion yuan to 5.038 billion yuan, representing an increase of 11.53%; basic earnings per share will increase from 0.2333 yuan per share to 0.2459 yuan per share, increasing by approximately 5.4%.

TCL Technology’s core businesses are semiconductor displays, new energy photovoltaics, and semiconductor materials. Its subsidiary TCL Huaxing is the second-largest panel manufacturer in mainland China, second only to BOE. In recent years, TCL Technology has continued to step up its investment in the semiconductor display field. In March 2025, TCL Technology had announced its plan to acquire 21.53% equity in Shenzhen Huaxing for 115.62 billion yuan. In addition, TCL Huaxing had announced in September 2024 that it would acquire 80% of LGD’s Guangzhou LCD panel plant, 100% of the module plant, as well as related technical and service support needed for the operation of the two plants. The transaction was completed in 2025.

A large volume of information and precise interpretation—available in the Sina Finance APP.