Yachuang Electronics Responds to Shenzhen Stock Exchange Inquiry, Detailing Issues Related to the Acquisition of Remaining Shares in Ouchuang Chip and Yihai Nengda

Shanghai Yachuang Electronics (Rights Protection) Group Co., Ltd. (hereinafter referred to as “Yachuang Electronics”) recently provided a detailed response to the inquiry letter from the Shenzhen Stock Exchange regarding its application for issuing shares and paying cash to acquire assets and raise supporting funds. The response addressed various issues including the industry policy compliance related to the acquisition of 40% equity of Shenzhen Ouchuangxin Semiconductor Co., Ltd. (hereinafter “Ouchuangxin”) and 45% equity of Shenzhen Yihai Neda Co., Ltd. (hereinafter “Yihai Neda”), as well as the transaction counterpart, necessity, operational compliance of the target assets, and the fundraising projects.

The target assets align with the GEM positioning and demonstrate significant synergy with the listed company

Yachuang Electronics elaborated in detail the specific basis for Ouchuangxin and Yihai Neda meeting the GEM (Growth Enterprise Market) positioning. Ouchuangxin, as a national-level specialized, refined, distinctive, and innovative “Little Giant” enterprise, focuses on analog chip design, with two main product lines: LED lighting driver chips and DC-DC power management chips. Its core technologies include LED linear step-down constant current driving technology and switching step-down constant current control technology. The company holds 10 invention patents, 6 utility model patents, proprietary rights to 30 integrated circuit layout designs, and 6 software copyrights. Its products are used in automotive lighting, electric two-wheelers, smart lighting, among others. From 2023 to September 2025, its operating revenues were RMB 85.2354 million, RMB 116.9916 million, and RMB 64.1868 million, respectively, with net profits of RMB 22.8171 million, RMB 46.3129 million, and RMB 19.3321 million, showing good growth potential.

Yihai Neda, as an electronic component distributor, has obtained authorization from internationally renowned brands such as Murata, Panasonic, and Taling Micro, providing customers with passive components, discrete devices, ICs, modules, and technical support services. Its operating revenues from 2023 to September 2025 were RMB 441.0346 million, RMB 517.7523 million, and RMB 447.8829 million, respectively, with net profits of RMB 22.7551 million, RMB 29.0588 million, and RMB 24.0933 million. Through innovative supply chain services and technical support, Yihai Neda promotes the integration of new technologies with traditional industries, meeting the GEM’s positioning requirements.

Regarding synergy with the listed company, after the completion of this transaction, Ouchuangxin will optimize collaboration with the company’s R&D team and share core IP and technologies, while Yihai Neda will complement the company’s procurement channels and customer resources, enhancing overall profitability. Data from review preparations indicate that, post-transaction, the net profit attributable to the parent company’s owners and basic earnings per share will increase.

Clear transaction counterpart and shareholding structure, and compliant lock-up arrangements

The transaction counterpart includes six shareholders of Ouchuangxin and three shareholders of Yihai Neda. The non-natural person transaction counterparts, Haineda Technology and Haiyou Tongchuang, were not established solely for this transaction, and their registered capital has been fully paid in. The lock-up arrangements for the shares obtained by the transaction counterparts in the listed company comply with relevant regulations of the “Administrative Measures for Restructuring.” For the target assets used for share subscription that have continuous ownership rights exceeding 12 months, the newly issued shares cannot be transferred within 12 months from the end of issuance.

Regarding the historical shareholding arrangements involving nominee holdings in Haiyou Tongchuang and Ouchuangxin, the reply detailed the reasons, evolution, and解除 process of such arrangements. The employee entrusted nominee holdings and investor entrusted nominee holdings in Haiyou Tongchuang have been解除 through signing agreements and handling industrial and commercial changes, with clear sources and flows of funds, and no ownership disputes. The founder shareholders’ entrusted holdings of relatives and virtual equity grants in Ouchuangxin have also been规范清理, with no unresolved nominee holdings or undisclosed利益安排.

Fundraising projects focus on core business and are complementary to previous fundraising

The current fundraising of RMB 251 million will be used to supplement working capital, repay debts, pay cash consideration, and fund the “High-end automotive-grade driver and power management chip industrialization project.” This project differs in R&D content and application scenarios from the previous “Automotive analog chip R&D and industrialization project.” The former focuses on automotive-grade display driver chips and LED direct display driver chips used in automotive intelligent cockpits; the latter emphasizes LED drivers, motor drivers, and general power management chips used in automotive lighting and body control. Both are automotive-grade analog chips with technological continuity and product complementarity, without duplication of construction.

The progress of the previous projects, “Automotive analog chip R&D and industrialization” and “Yachuang Automotive Electronics Headquarters Base,” met expectations, with completion rates of 75.88% and 5.45% as of June 30, 2025, respectively. They are expected to be operational by the end of 2026 and will not significantly impact the current fundraising projects. Considering the company’s cash reserves, future funding needs, and debt ratio, the use of supporting funds for transaction consideration and working capital is necessary, and the proportion of supplementary funds complies with relevant provisions of the “Guidelines for the Application of Regulatory Rules—Listing Category No. 1.”

Operational compliance of the target assets and risk mitigation measures are in place

The leased properties of Ouchuangxin and Yihai Neda are mainly used for office purposes, with clear renewal plans. If renewal is not possible, alternative office locations can be arranged, which will not significantly affect production and operation. The patents obtained by Ouchuangxin are legally sourced and fairly priced, with no ownership disputes. Some patents of Ouchuangxin are related to core technologies, while the patents inherited by Yihai Neda have not been applied to core business operations.

Funds transferred from Ouchuangxin to the listed company are within the scope of consolidated financial statements, fully repaid with interest, and do not involve non-operating capital occupation. Yihai Neda and its subsidiaries possess legal qualifications for electronic component sales and import-export business, with valid licenses, complete foreign investment filings, and foreign exchange registration procedures.

To mitigate risks of key personnel loss, Ouchuangxin and Yihai Neda have signed employment contracts, service agreements, non-compete, and confidentiality agreements with core personnel, ensuring stable employment. After the transaction, the listed company will implement integration and control over personnel, finance, business, assets, and organizational structure to ensure the full发挥 of synergy effects.

Yachuang Electronics stated that this transaction will further strengthen control over the target assets, improve operational management efficiency and core competitiveness, and align with the company’s strategic development. Independent financial advisors, lawyers, and other intermediaries have verified relevant matters and believe that this transaction complies with applicable laws and regulations and is feasible.

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