Huaqin Co., Ltd. Announces Significant Minority Stake Acquisition in Nexchip Semiconductor

Huaqin Co., Ltd. (Stock code: 3296), a leading smart product platform company, has announced a major discloseable transaction involving the acquisition of a further minority interest in Nexchip Semiconductor, a key player in China’s semiconductor industry. The transaction, valued at over RMB 2.65 billion, is poised to deepen Huaqin’s strategic footprint in the semiconductor value chain.

Key Highlights of the Transaction

• Acquisition Details: On April 28, 2026, Huaqin and its wholly-owned subsidiary, Hefei Qinhe, entered into a Share Transfer Agreement with Powerchip Innovation of Taiwan. Hefei Qinhe will acquire 100,379,585 shares of Nexchip Semiconductor, representing approximately 5.0% of Nexchip’s total issued share capital, at RMB 26.41 per share. The total consideration is RMB 2,651,024,839.85.
• Funding: The acquisition will be funded entirely by Hefei Qinhe’s self-owned funds, ensuring no material adverse impact on Huaqin’s overall financial position and operations.
• Payment Terms:
  • 30% of the consideration (RMB 795,307,451.95) will be paid within five business days of executing the Share Transfer Agreement to a jointly managed account.
  • The remaining 70% (RMB 1,855,717,387.90) will be paid after the share transfer registration and tax withholdings are completed.
• Completion Conditions: The acquisition’s completion is contingent on compliance confirmation from the Shanghai Stock Exchange and completion of registration procedures with CSDC. The deal will close upon obtaining the Securities Transfer Registration Confirmation.
• Post-Transaction Shareholding: Upon completion, Huaqin Group’s total holding in Nexchip Semiconductor will rise to approximately 11.0%, following a prior 6.0% stake acquisition in July 2025.
• Listing Rule Implications: Aggregating this transaction with the earlier 6.0% acquisition, the applicable percentage ratios exceed 5% but are under 25%. This makes the transaction “discloseable” under Hong Kong Listing Rules, requiring reporting and announcement but not shareholder approval.

About Nexchip Semiconductor

• Company Profile: Nexchip Semiconductor is a Shanghai-listed pure-play foundry specializing in 12-inch wafer manufacturing, with its A shares traded on the STAR Market (stock code: 688249).
• Financial Performance:
  • 2024 Revenue: RMB 9.25 billion
  • 2025 Revenue: RMB 10.89 billion
  • Q1 2026 Revenue: RMB 2.91 billion
  • 2024 Net Profit: RMB 482.2 million
  • 2025 Net Profit: RMB 466.5 million
  • Q1 2026 Net Profit: RMB 28.52 billion (notably high, potentially due to a one-off or extraordinary item)
  • Total assets as of March 31, 2026: RMB 54.71 billion
  • Net assets attributable to shareholders: RMB 21.92 billion

Details on Transaction Parties

• Powerchip Innovation: The seller, a Taiwan-based equity investment firm, is independent of Huaqin and its connected persons. As of March 31, 2026, it owned 13.07% of Nexchip, which will decrease to 8.07% after this transaction.
• Hefei Qinhe: The wholly-owned subsidiary of Huaqin, the purchaser in this transaction, focuses on electronic device manufacturing and technical services.

Strategic Rationale and Shareholder Considerations

• Strategic Intent: Huaqin views this acquisition as a vote of confidence in Nexchip’s long-term growth prospects and investment value. The company aims to leverage this stake to foster greater integration and synergies across the semiconductor industry value chain, enhancing its competitiveness and market position.
• Potential Price-Sensitive Implications: The substantial increase in Huaqin’s holding in Nexchip (from 6.0% to 11.0%) could be seen as a strategic move to secure upstream semiconductor resources and influence, potentially benefiting Huaqin’s core smart product business. The impressive Q1 2026 financial results of Nexchip (particularly the sharp rise in net profit) may also attract market attention and positively impact share prices.
• Conditionality and Caution: Completion is subject to regulatory and procedural conditions. There is no guarantee that the acquisition will proceed, and investors should exercise caution.

Board’s View

The Board of Huaqin considers the transaction terms fair and reasonable, in the best interests of the company and shareholders as a whole.

Definitions

• A Shares: Ordinary shares listed on the Shanghai Stock Exchange, denominated in RMB.
• H Shares: Overseas-listed shares on the Hong Kong Stock Exchange, denominated in HKD.
• Proposed Acquisition: The acquisition of 5.0% of Nexchip shares as described.
• Previous Acquisition: The 6.0% stake acquired in July 2025.

Important Notice

Investors are advised to note that the completion of the proposed acquisition is subject to several precedent conditions, and the transaction may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of Huaqin Co., Ltd.

Disclaimer: This article is prepared for informational purposes only and does not constitute investment advice. The completion of the acquisition remains subject to regulatory approvals and procedural requirements. Investors should conduct their own research or consult their professional advisers before making any investment decisions related to Huaqin Co., Ltd. or Nexchip Semiconductor.

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