Huaxing Capital M&A and Strategic Investment Biweekly Report Vol.57

On June 9, according to public media reports, Oppai Home (603833.SH) announced the wholly-owned acquisition of the Italian high-end home furnishing brand FORMER, sending a signal to the market that the company is entering the high-definition market. Established in 1967, FORMER is an Italian top high-end furniture brand with more than 50 years. It was born in the Brianza region, the heart of “Made in Italy”. This area is a gathering place for 80% of the world's top furniture vendors.

On June 9, according to public media reports, Renesas Electronics (TSE: 6723), a global semiconductor solution provider, announced that it has reached a final agreement with Reality Analytics, Inc., an embedded AI solution provider. Under the agreement, Renesas will acquire Reality AI through an all-cash transaction. The deal is expected to close before the end of 2022. The acquisition will significantly enhance Renesas' ability in end-point artificial intelligence, provide system developers with greater flexibility and efficiency, and help prepare their products for AIoT and enter the market faster.

On June 8, according to public media reports, the US photo sharing platform Pinterest (NYSE: PINS) announced the acquisition of the AI-powered women's fashion e-commerce platform The Yes. The exact transaction price was not disclosed. A few months after the acquisition is completed, Pinterest will discontinue the Yes app and website, and the merged team will focus on technology integration to help Pinterest develop in the e-commerce direction.

On June 7, Yangjie Technology (300373.SZ) announced that the company received a “Notice of Contract Signing” from the Beijing Property Exchange, confirming that the company was the transferee of Chuwei Semiconductor's 40% equity transfer project, with a transaction price of 0.295 billion yuan. Chuwei Semiconductor's main business is semiconductor wafer manufacturing and services. Its main products are semiconductor equipment, complete equipment, and trusted chip manufacturing solutions. Chuwei Semiconductor has built an 8-inch 0.25 μm to 0.13 μm integrated circuit equipment verification process line. At present, it has achieved large-scale production of 8-inch lines, with a monthly output of 0.01 million pieces, and production capacity continues to rise.

On June 6, according to public media reports, the one-stop international logistics online service platform Yunshou has recently completed the acquisition of COPE, a cross-border e-commerce logistics service provider. This round of acquisitions will lead to the expansion of the North American market and the expansion of the cross-border logistics supply chain. After the acquisition is completed, Yantou's self-operated overseas warehouse resource area in the North American market will exceed 1.8 million square feet, and the total number of overseas warehouses in the Eastern, Western, and Southern US regions will reach 14.

On June 6, according to Yinfei Storage (603066.SH), the company plans to purchase 100% of the shares in Beijing Wuqiang Intelligent Technology Co., Ltd. According to reports, the target company entered the field of warehousing system integration earlier and is a well-known domestic logistics system integration science and technology innovation enterprise. There are many complementary spaces between the target company and the company's main business.

On June 2, ordinary people issued an announcement stating that they intend to participate in the bid for 1.4564% of the shares of Hunan Huairen Health Industry Development Co., Ltd., which was publicly listed and transferred on the Hunan Joint Property Exchange, with a reserve price of about 33.13 million yuan; the reserve price of 0.4855% of Huairen Health's shares listed and transferred by Hunan Light Salt Venture Capital Management Co., Ltd. on the Hunan Industrial Exchange is about 11.04 million yuan. The total reserve price for the listing and transfer of this auction was approximately 44.18 million yuan. Prior to this bid, ordinary people held about 76.12% of Huairen Health's shares. If this bid is successful, ordinary people will acquire 1.9419% of Huairen Health's shares, for a total of 78.0618% of Huairen Health's shares. Huairen Health is one of the most influential retail pharmacy chains in the Xiangxi region. Currently, it has more than 660 directly managed pharmacies, distributed in the western Daxiangxi region and Guizhou.

On June 1, according to public media reports, Cloud Accelerated announced the merger and acquisition of Beijing Yuchuan Jusu Technology Co., Ltd. Yuduan Zuxu is a digital intelligent management solution provider, focusing on the R&D efficiency track of enterprise organizations, providing professional organization-level R&D digital intelligent management solutions and continuous improvement services. We have created a product matrix around an integrated R&D platform — continuous delivery assembly line (IDL), and the concept of “one customer, one solution, one platform, multiple products, multiple services” to help enterprises continuously create business value and enable efficient delivery to bring business success.

On June 1, according to public media reports, Yuanzhi Technology recently completed a strategic financing of 0.43 billion yuan, integrating well-known enterprises and industrial investment institutions in the communications sector, led by the VPK of Hong Kong Weipu Capital, followed by Beijing Information Technology, and Taiji Cloud continued to increase. Yuanzhi Technology is a large-scale information technology integrated solution provider. It has pioneered a new paradigm in the field of communication technology. Based on unified communication and integrated control, it targets applications in various fields such as artificial intelligence, intelligent emergency response, command and dispatch, and satellite communications, providing core technical support for increasingly distributed edge intelligence scenarios.

On June 1, Huafeng Group announced that it has officially completed the settlement of its business and technology related to the acquisition of biobased products divested by DuPont in the US, with a purchase amount of 0.24 billion US dollars. This time, Huafeng Group acquired the assets of DuPont's business, mainly including its two production sites in the US. One is a DuPont joint venture production site with Susterraand ZemeaTwo world-renowned brands whose main business is R&D, production and sale of bio-based PDO; the other production site is DuPont's SoronaThe core manufacturing plant of the business. The main product is bio-based special polyester (PTT), an environmentally friendly fiber material.

On May 31, Hi-Tech Development announced that the company plans to acquire control of Chengdu Senwei Technology Co., Ltd. and Chengdu Gaotou Xinwei Semiconductor Co., Ltd. in cash. Senwei Technology is a high-tech enterprise founded by a doctoral team from Tsinghua University and the Chinese Academy of Sciences. It is mainly engaged in the design, development, and sales of IGBTs and other power semiconductor chips and products. It is a joint venture established by Senwei Technology and GIC Group, which is mainly responsible for the construction of local power semiconductor device prototyping lines and high-reliability discrete device integrated component production lines.

On May 31, GlaxoSmithKline said it would buy American biopharmaceutical company AffiniVax for $3.3 billion to strengthen its vaccine pipeline. Affinivax, a novel multi-antigen presentation system (MAPS) vaccine and immunotherapy developer, is developing the next generation of vaccines, the most advanced for pneumococcal diseases, including pneumonia, meningitis, and sinusitis. GlaxoSmithKline will pay Affinivax an upfront payment of $2.1 billion and potential development costs of up to $1.2 billion.

On May 30, according to public media reports, Jiangsu Aijuxing Media Technology Co., Ltd. plans to acquire 60% of the shares of Shanghai Starlight Chain Brand Management Co., Ltd. using “cash+equity incentives”, with a transaction consideration of about 0.42 billion yuan. StarC Starlight Chain was founded in 2014. Through co-branding stars from all walks of life, it integrates the world's top product design and R&D capabilities to bring “affordable and safe to use” star products to Asian consumers. StarC Starlight Chain collaborates with more than 20 leading artists from home and abroad. Last year's revenue exceeded 2 billion yuan. The product categories were concentrated in the fields of personal care, beauty, home cleaning, food, and apparel.

On May 30, according to public media reports, women's health and skincare brand Dr. Qingyan received strategic investment from Yujiahui. Dr. Qingyan's brand is centered on bioactive peptides, and bioactive peptides are fully applied in internal health and external skin care. In the future, Dr. Qingyan's brand will focus on various aspects such as internal intestinal regulation and external skin barrier repair to achieve coverage for all age groups and strive to create a healthy oligopeptide ecosystem.

On June 9, NIO (NYSE:NIO/9866.HK/SGX:NIO) announced its results for the first quarter of 2022. NIO's revenue for the first quarter was 9.91 billion yuan, up 24.2% year on year, basically the same as the fourth quarter of 2021; net loss was 1.78 billion yuan, up 295.3% year on year, down 16.8% month on month; non-GAAP net loss was 1.31 billion yuan, up 269.3% year on year, down 25.0% month on month.

In terms of operating data, the number of cars delivered in the first quarter was 25,768 vehicles, an increase of 28.5% over the previous year.

On June 9, Bilibili (NASDAQ:BILI/9626.HK) announced results for the first quarter of 2022. Bilibili's first-quarter revenue was 5.05 billion, up 30% year on year; non-GAAP net loss was 1.65 billion yuan, up 85.7% year over year. The company's game revenue for the first quarter of 2022 was 1.358 billion yuan, up 16% year on year; value-added business revenue reached 2.052 billion yuan, up 37% year on year; advertising business revenue was 1.041 billion yuan, up 46% year on year; e-commerce and other business revenue was 0.603 billion yuan, up 16% year on year.

In terms of operating data, the average monthly active users of Station B reached 0.294 billion in the first quarter, an increase of 31% over the previous year; the average number of daily active users reached 79.4 million, an increase of 32% over the previous year.

On June 2, Meituan (3690.HK) announced the results for the first quarter of 2022. Meituan's revenue for the first quarter was 46.27 billion yuan, up 25.0% year on year; operating loss was 5.58 billion yuan, loss 4.77 billion yuan for the same period last year; adjusted net loss was 3.59 billion yuan, and net loss for the same period last year was 3.89 billion yuan.

In terms of revenue composition, in the first quarter of 2022, Meituan's takeout business revenue was 24.16 billion yuan, up 17.4% year on year; in-store, hotel and travel revenue was 7.62 billion yuan, up 15.8% year on year; new business and other revenue was 14.49 billion US dollars, up 47.0% year on year.

On June 1, Weibo (NASDAQ:WB/9898.HK) announced the results for the first quarter of 2022. Weibo's first quarter revenue was 0.485 billion US dollars, up 5.6% year on year; operating profit was 0.1 billion US dollars, down 5.3% year on year; non-GAAP net profit was 0.13 billion US dollars, up 1.7% year on year.

According to operating data, in the first quarter of 2022, Weibo monthly active users reached 0.582 billion, a year-on-year net increase of about 51 million; daily active users were 0.252 billion, a net increase of about 22 million over the previous year.

On June 1, Huanju Group (NASDAQ: YY) announced its results for the first quarter of 2022. Huanju Group's revenue for the first quarter was 0.62 billion US dollars, down 3.0% year on year; operating loss was 27.5 million US dollars, operating loss was 87.3 million US dollars for the same period last year; non-GAAP net profit was 20.9 million US dollars, and net loss for the same period last year was 24.1 million US dollars.

According to operating data, in the first quarter of 2022, Huanju Group's global average monthly mobile device users (MAU) was 0.275 billion people, down 19.2% year on year.

On May 31, Shell (NYSE:BEKE/2423.HK) announced results for the first quarter of 2022. Shell's first quarter revenue was 12.5 billion yuan, down 39.4% year on year; gross profit was 2.2 billion yuan, down 54.2% year on year; non-GAAP net profit was 28 million yuan, down 59.9% year on year.

According to operating data, in the first quarter of 2022, Shell turnover (GTV) was 586 billion yuan, a year-on-year decrease of 45.2%. Among them, the turnover of the stock housing business was 374.1 billion yuan, down 44.5% year on year; the turnover of the new housing transaction business was 192.7 billion yuan, down 43.9% year on year; and the turnover of the emerging and other service industries was 19.2 billion yuan, down 63.6% year on year.

On June 8, according to public media reports, JD's first automated warehouse in the US “Los Angeles No. 2” was officially opened. During 618 this year, the total area of JD's own overseas warehouses in the US will reach nearly 1 million square feet.

On June 7, according to public media reports, recently, Tencent Music Entertainment Group (TME) and SM Entertainment of Korea jointly announced that the two sides have reached a strategic cooperation, and the two sides will continue to deepen their cooperative relationship in the coming year. Now, after Tencent Music Entertainment Group signs a strategic cooperation with SM Entertainment, TME's QQ Music, Kugou Music, and K-Song for All will be the only 30-day music platform for the first launch in China.

On June 7, according to public media reports, the cross-border e-commerce fair hosted by the Ministry of Commerce came to a successful conclusion in Fuzhou. At the fair, Alibaba International launched the “Digital Port to the Sea Plan”, which includes a package of commercialized services including logistics, cross-border payment collection, and compliance assurance. According to reports, in 2021, Alibaba International served more than 0.01 million cross-border merchants in Fujian, with an annual export value of over 1.8 billion US dollars.

On June 2, according to public media reports, we learned from people familiar with the matter that NIO Auto is planning to build a power exchange station/charging pile production plant in Hungary to match its business in the European market. To this end, NIO has published a series of recruitment information locally, covering various positions in production, technology, finance, etc. In response, a NIO Auto insider said, “Infrastructure comes first. NIO's move in Hungary is (to meet) the needs of Europe to build and replace power plants.”

On June 1, according to public media reports, many people familiar with the matter revealed that ByteDance is seeking cooperation with local Indian companies to return to the Indian market. Sources revealed that ByteDance has had preliminary discussions with Indian real estate group Hiranandani. Hiranandani Group is one of India's largest real estate developers. The two parties may cooperate to store data through the consumer service platform Tez Platforms or the group's Yotta Infrastructure data center.

On June 8, according to public media reports, Xiaomi recently published an article announcing organizational adjustments. The Xiaomi Product Division and Redmi Product Division merged to establish the Mobile Phone Product Division, with Ling Xiaobing as the general manager of the mobile phone product department. According to reports, the mobile phone product department has the Xiaomi product department, Redmi product department, and Pad product department. Shi Shasha is the head of the Xiaomi product department in the mobile phone product department; Guo Ruimin is the head of the Pad product department in the mobile phone product department; and Ling Xiaobing is also the head of the Redmi product department. In January of this year, Xiaomi released internal documents announcing that Chang Cheng, the former vice president of the group and general manager of Xiaomi's mobile phone product department, left his post. After Chang Cheng left his job, Zeng Xuezhong, the president of the mobile phone department, also served as the general manager of Xiaomi's mobile phone product department. On the one hand, this adjustment addresses the gap after Changcheng; on the other hand, it is also beneficial to strengthen collaboration between Xiaomi phones, Redmi phones, and tablet products.

On June 3, according to public media reports, Xiaomi India announced the company's organizational adjustments via Twitter: Manu Kumar Jain (Manu Kumar Jain) changed to a global role as group vice president last year and is currently responsible for international strategies including international marketing and public relations; Alvin Tse (Alvin Tse), the former general manager of Xiaomi Indonesia, will assume the position of general manager of Xiaomi India; and Anuj Sharma (Anuj Sharma) will rejoin Xiaomi India as its chief marketing officer.

On June 2, according to public media reports, Ant Group recently updated information on its official website and hired Ms. Yang Xiaolei and Ms. Smellen as independent directors. The proportion of independent directors on the board of directors rose to 50%, and the proportion of female directors exceeded 1/3. Furthermore, the number of shareholder representatives and directors was reduced from 3 to 2, and Jiang Fang and Chunhua Capital Group founder Hu Zuliu no longer serve on the board of directors of Ant Group.

On June 2, according to public media reports, after joint discussions between Changting's management and Alibaba Group, Changting Technology changed from a wholly-owned subsidiary of Alibaba to a holding subsidiary and began a new journey as a more independent business entity. Xiao Li, vice president of Alibaba Group and former general manager of Alibaba Cloud Intelligent Security, was officially transferred to Changting Technology as CEO.

On June 1, according to public media reports, NIO issued an internal organizational announcement to sort out the European business development organizational structure. Chen Chen, head of business development in Europe, and general managers of companies in various European countries began reporting to Qin Lihong, co-founder and president of NIO. According to the announcement, the former first-level division Global Business Development changed its name to European Business Development. The person in charge is still Chen Chen, reporting to Qin Lihong; European business development has established new second-level departments such as the European User Operation Department and the European User Development Department to report to Chen Chen; general managers of companies in various European countries report directly to Qin Lihong and the dotted line to Chen Chen. Chen Chen previously reported to NIO's chief financial officer Feng Wei. According to information previously released by NIO, after Norway, NIO will operate in four countries this year: Germany, the Netherlands, Sweden, and Denmark.

On May 29, according to public media reports, Alipay (Hangzhou) Information Technology Co., Ltd., the registrant of Alipay's Internet segment business, underwent business changes: Li Juan became the company's general manager. According to information, Li Juan is the vice president of Ant Group and the current head of Alipay's app business. According to public information, Alipay (Hangzhou) Information Technology Co., Ltd. was founded in 2016 and has more than 10 subsidiaries. The business scope currently covers many fields such as digital technology development, digital lifestyle services, open platforms for merchants, and digital marketing.