Battery factory, rescue GPU unicorn

 Wen 丨 Selected Cloud Hunting  Shao Yangang

Another A-share listed company broke into the venture capital circle, and the first money brought a unicorn back to life!

Recently, Chongqing GPU unicorn Xiang Dixian, which was confirmed to be in crisis, announced the latest round of financing of hundreds of millions of yuan, officially announcing its breakthrough and rebirth. In this operation to save the unicorn, the listed company Avo Technology emerged in the public eye.

The last time Anfu Technology was in the spotlight was when it promoted business transformation. Through a series of capital operations, Nanfu Battery, the largest consumer alkali manganese battery manufacturer in China, realized its dream of listing. Today, this Nanfu battery has continued the life of chip companies.

For Anfu Technology, which has invested in cross-border areas this time, although its performance has been improving, it still carries nearly 3 billion yuan in goodwill. Is it not doing a proper job to invest in companies other than its main business? According to the announcement issued by Xiangdixian, during this round of financing, Xiangdixian and Anfu Technology reached in-depth strategic cooperation. So, what kind of spark can Anfu Technology and Elephant Dixian finally collide?

And Yuan Yonggang, the driving force behind this investment, the head of Anfu Technology and a so-called M & A expert, once again uses a listed company as an investment platform. What strategic planning is hidden behind it?

Battery manufacturers turn into unicorn saviors”

On Valentine’s Day, the GPU unicorn Elephant Dixian officially unveiled the mystery of Prince Charming. Its savior comes from A-share listed company Anfu Technology and many well-known venture capital institutions.

Source: Xiangdixian WeChat screenshot

According to public information, at the end of August 2024, Xiangdi first received bad news that the company laid off about 400 employees outside the core team, and the company entered a dormant state. In November of the same year, Xiangdi Xian and Tang Zhimin, the founder of the company, both became the persons subject to execution, with a target amount of 240,000 yuan. Tang Zhimin and the company were even subject to consumption restriction orders. It was not until the end of 2024 that Xiangdi first ushered in the dawn: a major breakthrough was made in the new round of financing.

Founded in 2020, Xiangdixian mainly develops high-performance, low-power, general-purpose CPU/GPU and related dedicated chip products with completely independent intellectual property rights suitable for desktop, workstation, edge computing and other fields. As a star unicorn, Elephant Dixian has been active in the spotlight of China’s Nvidia.

Anfu Technology, on the other hand, is a consumer battery researcher with assets under its name Nanfu, a well-known alkali manganese battery brand in China. According to official website information, Anfu Technology’s business is divided into consumer batteries, commercial small batteries, digital accessories and new consumer products. Even in order to improve the industrial layout, Anfu Technology only focuses on the needs of the energy storage industry, combines its own capabilities and resources, actively explores and expands new energy business, grasps development opportunities in the energy storage industry, actively expands the company’s second growth curve, and shares shares. Invest in energy storage projects.

Battery manufacturers, why should they invest in a GPU manufacturer?

Xiangdixian stated in its announcement that it has reached in-depth strategic cooperation with Anfu Technology, and Anfu Technology will rely on its strong capital strength and efficient management system to help Xiangdixian accelerate technology research and development and expand market boundaries.

Behind the scenes, we have already laid out the chip track

The connection between Anfu Technology and GPUs is not so strong, but the helm of Anfu Technology has been paying attention to the chip industry for a long time.

Although Avo Technology’s current business is consumer batteries, its predecessor was Andriy Department Store, which was launched in 2016, and is mainly engaged in department store retail business in third-and fourth-tier cities and rural markets. However, Andrei Department Store has suffered losses year after year, and the company has to seek transformation.

At this time, trader Yuan Yonggang appeared.

In 2019, Yuan Yonggang and his wife entered Andry Department Store. Although the couple actively adjusted their strategic layout after taking over, it was still difficult to get rid of the dilemma of declining income and expanding losses. Public data shows that in 2020 and 2021, Andriy Department Store’s operating income was 1.766 billion yuan and 1.677 billion yuan respectively, down 6.96% and 5.01% year-on-year respectively. The parent’s net profit suffered losses for two consecutive years.

In September 2021, Anfu Technology acquired 36% of the shares of Yajin Technology, the controlling shareholder of Nanfu Battery, for 2.4 billion yuan in cash. After the transaction was completed, Nanfu Technology also completed the disposal of the original department store retail business, and its main business shifted from traditional department store retail to battery research and development, production and sales. The company name was also changed to Anfu Technology.

But this merger is only an example in Yuan Yonggang’s capital operation career.

Yuan Yonggang keeps a low profile in the industry and rarely comes forward for interviews. According to public information, Yuan Yonggang’s family started from a traditional small sheet metal factory on the coast of Taihu Lake in Suzhou in the 1980s and worked step by step to become a leading private enterprise in Suzhou.

In 2004, the first share of the Small and Medium-sized Enterprise Board of the Shenzhen Stock Exchange was officially listed, which had a huge impact on Yuan Yonggang’s father and himself. In 2005, Yuan Yonggang took over the business after returning from studying overseas and continued to move forward based on the hard work of his fathers.

The first step is to advance into the capital market. In 2007, the company underwent joint-stock transformation. After three years of preparation, in 2010, Yuan Yonggang’s family business Dongshan Precision was officially listed on the Shenzhen Stock Exchange.

After the successful listing, the empowerment of capital allowed Dongshan Precision to prepare for another big move. When it went public, it was the first year of vigorous development of smartphones in China. Dongshan Precision expanded its industry into the 3C industry chain, successively expanded its communication equipment product line, and invested in new LED packaging and touch display module industries.

It was also during this period that Yuan Yonggang began to fight in the M & A circle and traced his past achievements. After taking over the family business Dongshan Precision, Yuan Yonggang successfully acquired Apple FPC supplier MFLX in 2016, and acquired Multek, a subsidiary of multinational giant Flextronics, which is mainly engaged in rigid PCB business in 2018. The above-mentioned overseas mergers and acquisitions have become classic teaching cases in business schools.

In addition to mergers and acquisitions, Yuan Yonggang is also laying out the investment landscape.

Since many years ago, Yuan Yonggang has invested in many funds as LPs. According to Sky Eye Information, Yuan Yonggang now serves as a shareholder of 22 companies, including 5 investment institutions and private equity funds, including Wuzhong Venture Capital, Hanhu Capital, Ruishi Tailai Investment, Shenzhen Jingze and Jinhaihui Fund.

Source: Sky Eye Inspection

In the chip field, this is not the first time Yuan Yonggang has made a move.

The largest M & A case by far by China Capital in the semiconductor field is undoubtedly the M & A of Anshi Semiconductor that originated in 2016. Yuan Yonggang was also involved in this capital operation.

In 2018, Dongshan Precision announced that it planned to form a joint acquisition entity with Yuan Yonggang or the companies controlled by him, and other funding parties to transfer the shares held by Hefei Guangxin, Anshi Semiconductor’s largest investor. Moreover, Yuan Yonggang was preparing for this merger very early.

However, the above-mentioned merger was intercepted by Wentai Technology, and Yuan Yonggang even issued a lawyer’s letter accusing Wentai Technology of infringing its priority in the Anshi Semiconductor restructuring transaction.

Today, Yuan Yonggang is an entrepreneur who controls three A-share listed companies: Dongshan Precision, Anfu Technology, and Landun Optoelectronics. Investing through listed companies is already a basic operation.

It is reported that in April 2024, Yuan Yonggang participated in the Series B financing of over 500 million yuan from 5G baseband chip design company Xingsi Semiconductor through Blue Shield Optoelectronics, and Blue Shield Optoelectronics invested 180 million yuan.

According to the recently released investor relations activity record form, Anfu Technology revealed that its subsidiary Anhui Qirui Venture Capital Co., Ltd. recently registered and established Anhui Qirui Core Enterprise Management Partnership (Limited Partnership). The partnership will actively look for investment and M & A opportunities, aiming to invest in targets with broad market prospects and development potential, especially in new productivity fields such as chips.

Carrying 2.9 billion yuan in goodwill, is Nanfu’s battery enough?

Xiang Dixian is Anfu Technology’s first move in the investment field. But as a unicorn savior, what is the strength of Anfu Technology?

After the formal transformation, Anfu Technology’s performance was mainly contributed by Nanfu Battery.

Financial report information shows that in 2022 and 2023, Anfu Technology achieved operating income of 3.383 billion yuan and 4.318 billion yuan respectively, and net profit attributable to the parent company was 82 million yuan and 116 million yuan respectively.

According to the 2024 results forecast recently released by Anfu Technology, the company expects to achieve a net profit attributable to owners of the parent company of 158 million yuan to 178 million yuan in 2024, an increase of 42.17 million yuan to 62.17 million yuan compared with the same period last year., a year-on-year increase of 36.41% to 53.68%.

In the first year after completing the acquisition, Avo Technology’s performance turned around, and its performance has continued to rise since then.

However, when acquiring Nanfu Battery, Anfu Technology’s net assets were only 613 million yuan, while Nanfu Battery’s valuation was as high as 9.903 billion yuan. This is a typical snake-swallow-elephant merger. Anfu Technology not only spent a lot of money, but also generated huge amounts of goodwill.

It is reported that the current goodwill of Anfu Energy, a subsidiary of Anfu Technology, acquired the equity of Yajin Technology, is confirmed to be 2.906 billion yuan. For Anfu Technology, as long as Nanfu’s battery business is good enough, there will be no impairment of goodwill, and the risk of performance gambling is within controllable limits.

With positive cash flow and stable performance, Anfu Technology will not have much pressure to invest in Xiangdixian.

In addition, Avo Technology is not the only example of listed companies reaching out to GPU tracks. In 2023, GPU manufacturer Liusuan Technology has also experienced difficult times. In August 2024, listed company Dongxin Co., Ltd. offered an olive branch to Liusuan Technology.

The current GPU track is still in the spotlight. Anfu Technology entered the game, took a fancy to its potential and had to bear corresponding risks. Nanfu Battery is the first to continue electricity for Xiangdi. Can Xiangdi Xian create a new growth curve for Anfu Technology?& nbsp;