Eliza Wong
Major Acquisition in Chinese Power Electronics Sector
Yangjie Technology (300373.SZ), led by Jiangsu billionaire Liang Qin (梁勤), has announced a groundbreaking all-cash acquisition of Dongguan Better Electronics Technology Co., Ltd. (东莞市贝特电子科技股份有限公司) for 2.218 billion yuan. This strategic move represents a massive 270.46% premium over the target’s book value, signaling strong confidence in the power electronics protection components market despite Better Electronics’ failed IPO attempt last year.
The acquisition comes with substantial performance guarantees totaling 555 million yuan in cumulative net profit between 2025-2027, highlighting the strategic importance Yangjie places on this expansion. For international investors monitoring Chinese equity markets, this transaction offers valuable insights into consolidation trends within China’s semiconductor and electronic components sectors.
Transaction Details and Financial Implications
Premium Valuation and Payment Structure
Yangjie Technology will pay 2.218 billion yuan in pure cash for 100% ownership of Better Electronics, representing one of the most significant premiums seen in recent Chinese M&A activity. The valuation represents a 270.46% premium over the parent company’s shareholder equity book value of 599.248 million yuan and a 282.89% premium over the consolidated net assets of 579.8033 million yuan.
The pure cash payment structure demonstrates Yangjie’s strong financial position, with the company reporting 4.566 billion yuan in cash reserves as of their latest半年度报告 (half-year report). This 270% premium acquisition is particularly notable given Better Electronics’ failed IPO attempt in 2024, suggesting Yangjie sees substantial unrealized value that public markets may have overlooked.
Performance Guarantees and Risk Mitigation
The transaction includes rigorous performance guarantees that protect Yangjie’s investment. Better Electronics’ shareholders have committed to achieving combined non-GAAP net profit of at least 555 million yuan between 2025-2027. Should the company fail to reach 90% of this target (499.5 million yuan), the sellers must provide compensation up to 1.108 billion yuan.
To ensure compliance, the agreement includes stock pledge mechanisms that allow Yangjie to liquidate collateral through various means including auction, sale, or secondary market disposal if performance compensation payments are not made on time. Conversely, the agreement also includes performance incentives of up to 40 million yuan for exceeding targets, creating balanced motivation for both parties.
Strategic Rationale Behind the 270% Premium Acquisition
Market Position and Synergy Potential
Yangjie Technology identified significant synergistic opportunities between their existing power device business and Better Electronics’ over-voltage protection products. Both product lines fall within the broader power electronic protection components category and serve complementary functions in current and voltage processing for electrical applications.
The acquisition aligns with Yangjie’s strategic direction to expand their integrated device manufacturing (IDM) capabilities across the semiconductor value chain. Better Electronics’ established customer relationships with industry leaders including Midea (美的), Gree (格力), and BYD (比亚迪) provide immediate market access to automotive electronics, photovoltaic, and energy storage segments that Yangjie has targeted for growth.
Technical Integration and Innovation Potential
The technological integration between Yangjie’s semiconductor expertise and Better Electronics’ protection component specialization creates opportunities for developing next-generation products. The combination could yield innovative solutions for emerging applications in electric vehicles, renewable energy systems, and industrial automation.
Better Electronics’ established R&D capabilities in power electronic protection components, developed since its founding in 2003, complement Yangjie’s semiconductor design and manufacturing strengths. This 270% premium acquisition reflects the strategic value Yangjie places on these technical capabilities and the potential for accelerated innovation through combined resources.
Background on Companies and Leadership
Yangjie Technology and Founder Liang Qin
Yangjie Technology was founded in 2000 by Liang Qin (梁勤), a Yangzhou native whose company name reflects her aspiration to create “the most outstanding enterprise in Yangzhou.” The company began as a trading firm before transitioning to manufacturing in 2006, eventually evolving into one of China’s few vertically integrated semiconductor companies encompassing chip design, device packaging, testing, and sales.
The company went public on the Shenzhen Stock Exchange (深圳证券交易所) in January 2014 and has demonstrated consistent growth, reporting 5.404 billion yuan in revenue and 1.06 billion yuan in net profit for 2022. Liang Qin appeared on the Hurun Global Rich List in 2023 with an estimated net worth of 13.5 billion yuan, establishing her as Yangzhou’s wealthiest woman and a significant figure in China’s semiconductor industry.
Better Electronics’ Journey and IPO Challenges
Better Electronics, founded in 2003, had pursued a创业板 (ChiNext) IPO that was accepted by the Shenzhen Stock Exchange on June 27, 2023. However, after the exchange issued a second round of inquiries on February 2, 2024, the company failed to respond and ultimately withdrew its application on August 28, 2024.
The exchange’s inquiries focused on several critical issues including whether the company’s acquisition of Dongguan Boyue (东莞博钺) constituted a major asset reorganization, the reasons and rationality behind significant post-acquisition performance improvements, capacity digestion measures for proposed projects, and innovation capabilities. The exchange directly questioned whether the company was attempting to “package itself for listing,” creating skepticism about its standalone prospects.
Financial Health and Market Context
Yangjie’s Strong Financial Position
Yangjie Technology’s 2025 half-year report demonstrates the company’s robust financial health, with revenue reaching 3.455 billion yuan (20.58% year-over-year growth) and net profit attributable to shareholders of 601 million yuan (41.55% growth). The company’s strong cash generation is evident in operating cash flow of 757 million yuan.
With 4.566 billion yuan in cash and cash equivalents, Yangjie possesses ample resources to fund this 2.218 billion yuan acquisition without jeopardizing operational stability. The company maintains reasonable debt levels with 1.589 billion yuan in short-term borrowing, 612 million yuan in long-term borrowing, and 528 million yuan in non-current liabilities due within one year.
Market Conditions and Sector Trends
The power electronics and semiconductor components market in China has experienced significant consolidation as companies seek scale and technological breadth to compete globally. This 270% premium acquisition occurs against a backdrop of increasing investment in automotive electronics, renewable energy infrastructure, and industrial automation—all requiring sophisticated power management and protection solutions.
Government policies supporting semiconductor independence and technological self-sufficiency have created favorable conditions for domestic champions like Yangjie Technology to expand through strategic acquisitions. The premium valuation reflects not only Better Electronics’ existing business but also the strategic optionality it provides in rapidly growing end markets.
Investment Implications and Market Outlook
Short-term Performance Considerations
Investors should monitor integration progress and whether Better Electronics can achieve its aggressive performance targets. The 555 million yuan cumulative profit commitment represents a significant increase from historical levels, requiring successful cross-selling and market expansion.
The all-cash nature of this 270% premium acquisition means Yangjie Technology will see an immediate impact on their cash position but avoids shareholder dilution. The transaction structure suggests confidence in near-term synergy realization without the need for equity financing.
Long-term Strategic Positioning
This acquisition strengthens Yangjie’s position as an integrated semiconductor and components provider capable of serving diverse applications from consumer electronics to automotive and industrial markets. The combination creates a more comprehensive product portfolio that can address complex customer requirements across multiple voltage and current protection scenarios.
For international investors, this transaction highlights the continued maturation of China’s semiconductor sector and the emergence of vertically integrated players capable of competing globally. The substantial premium paid suggests Yangjie sees significant value in combining technologies and market access to create a more formidable competitor.
Strategic Move in Evolving Semiconductor Landscape
Yangjie Technology’s acquisition of Better Electronics represents a bold strategic move in China’s rapidly consolidating semiconductor components sector. The 2.218 billion yuan cash transaction at a 270% premium demonstrates confidence in both the target’s existing business and the synergistic potential of combining complementary technologies and market positions.
The rigorous performance guarantees provide downside protection while the pure cash consideration preserves shareholder value without dilution. For investors monitoring Chinese equity markets, this transaction signals continued confidence in the growth prospects of power electronics, particularly in automotive, renewable energy, and industrial applications.
Market participants should watch integration progress and performance against the ambitious 555 million yuan profit target over the next three years. Successful execution could validate Yangjie’s strategic vision and establish a template for further industry consolidation, while any shortcomings would highlight the challenges of integrating companies at substantial premiums.
This 270% premium acquisition underscores the strategic value established technology companies can command even after failed public listing attempts, suggesting private M&A markets may offer alternative paths to liquidity for promising technology businesses facing regulatory or market challenges in public offerings.
