Following the Shanda network, the media, another Chinese company will also swing the Nasdaq

Yesterday (September 4), exhibition Communications (NASDAQ:SPRD) announced that the company's shareholders had voted to pass a merger agreement between the communications and Tsinghua Violet July 12.

According to the agreement, the Tsinghua Violet will be a share of the United States depository shares of 31 U.S. dollars (equivalent to 10.33 U.S. dollars per share) to acquire all the outstanding common shares issued by the communications, for the exhibition Communications estimated about 1.78 billion U.S. dollars.

After the deal is completed, the communications will become a wholly owned subsidiary of the Tsinghua Violet, whose shares will be rolled out in the Nasdaq Global market. The announcement did not mention the independence of the company after the acquisition and the timing of its completion.

In an interview, the exhibition disclosed that the acquisition is mainly equity investment, will not participate in management. The person also said it was unclear whether the two sides would join the new product.

However, unlike other Chinese concept stocks, the communication aims at the domestic a-share, and is listed in the form of a borrowed shell. Analysis that, if the exhibition of communications in A shares listed, will not only get a higher market value than the Nasdaq, attract more capital can quickly help its business and product line expansion.

Target A shares

Exhibition Communications is a Nasdaq-listed IC company dedicated to smartphone, functional mobile phones and other consumer electronics mobile chip platform development, 2012 revenue of about 720 million U.S. dollars.

All along, it has been positioned in the domestic TD-SCDMA industry as the low-end mobile phone, and the profit scale is very limited.

Wenjun, chief analyst at Isuppli, said in an interview: "In the first half of the year, the fabless company ranked first in mainland China to enter the world's top 15 chip design companies." But the overall performance of the semiconductor stocks in the Nasdaq downturn, for enterprises, only about 10 times times the PE, the total market value is only about 1 billion U.S. dollars. There is very limited scope for continued financing. ”

He believes that the purpose of the Tsinghua-Violet acquisition is to let the exhibition communication in a A-share borrowing shell listing. "After all, A shares of the same stock price-earnings ratio to 30 to 40 times times is very easy." ”

Yanhui, the Secretary-General of the China Alliance for mobile phones, also predicts that if the exhibition returns to a A-share, even if the net profit remains unchanged for 2012 years, the market value will reach or close to $5 billion, which could even reach $10 billion if the growth in the next two years is considered. There are also brokers who believe that the Tsinghua Violet is expected to have new moves this year. However, the current domestic IPO has not yet opened the gate, is expected to officially landing a shares the fastest to be the same.

However, the above said that the relevant people of communications to the above speculation can not be.

Push hardware products?

Although the deal has yet to be approved by regulatory authorities, the industry's chemical effects on the "marriage" of the two are still curious.

According to people close to the transaction, the Purple Light Group is only a shell of the acquisition of resources, behind there will be other capital side. And the business of the exhibition is not fully incorporated into the Violet group, after all, the main business of the two sides there is little overlap.

Exhibition has been committed to smartphones, functional mobile phones and other consumer electronics products, mobile phone chip platform development, product support 2G, 3G and 4G wireless communication standards. And the full line of Tsinghua light IT products have gradually faded out of the consumer vision.

Seemingly no intersection of a deal or show the true colors. At the end of July, the two sides signed a merger and acquisition agreement, Tsinghua's other company Tsinghua Tongfang will be launched into the smartphone market, it is reported that the company will launch four nuclear eight-inch mobile phones, the price will be set within 2000 yuan.

Are the two marriages really for the smartphone market? Yanhui denied the foregoing speculation to reporters. "Violet is a wholly state-owned company, the mobile phone is a fully competitive market, it came in and did not turn." ”

In his view, this merger is a pure capital level of cooperation, Violet also more to see the return of capital investment, and the combined push of new hardware is not within its strategy. "From the revenue point of view, the exhibition has completed from the functional mobile phone to the smartphone upgrade, from the product line to see the exhibition still need to continue efforts, fortunately, the hardest one has been weathered." After privatization, the exhibition will be more flexible and the market performance should be better. ”