In September 2021, Pathfinder acquired 60% of the equity of Beijing Xinneng, marking Pathfinder's official entry into the chip business field. This has officially formed an industrial pattern of dual main business operations of "outdoor business + chip business". Beijing Xinneng focuses on the Mini/Micro LED display driver chip business. It is one of the few companies in the world that can provide Mini LED active display driver chip products. It is also the first domestic company to have both direct display and backlight Mini LED active display driver chip products.
G2 Touch, which Pathfinder acquired this time, is a chip design company that provides customers with touch solutions for all categories (touch laptops, smartphones, tablets, etc.) based on its own patents. Its core team mainly comes from electronic companies such as Samsung and LG, and has many years of industry experience. G2 Touch obtained Microsoft Windows 8 certification in 2014. From 2015 to 2016, it supplied approximately 6 million touch ICs to Samsung Display, which were used in customer terminal products such as Dell and HP. In 2016, it became the main supplier of touch chips for BOE notebook computers. From 2016 to 2022, it has supplied tens of millions of touch ICs to BOE, and all products are qualified. Its products mainly involve LCD touch IC, OLED touch IC, battery protection IC and other products. Among them, the On-Cell single-layer technology used in touch IC products has marginal consistency in touch laptops, tablets and other segments above 7 inches. Strong, high precision and other advantages.
The G2 Touch acquired by Pathfinder has a mature business model, beautiful financial data, and outstanding asset quality and profitability. G2 Touch’s net assets are approximately 185 million yuan, of which mainly monetary funds are approximately 166 million yuan. In 2021, it will achieve revenue of 272.44 million yuan and net profit of more than 93 million yuan; in 2022, it will achieve revenue of 88.77 million yuan and net profit of approximately 16 million yuan. The future profit path of G2 Touch is relatively clear. The touch IC industry has bottomed out and its layout in the OLED and automotive display industries will increase profit margins.
Carry out extension layout in the early stage of recovery of the touch IC industry, Pathfinder The timing of this acquisition was very clever, as it acquired high-end touch IC targets at a relatively low price. According to the public information of comparable listed companies in the same industry, the average PE of touch chip companies is about 65 times, and the average PE of power management chip companies is about 70 times. The valuation of Pathfinder's current acquisition is 22 times the PE based on the target company's net profit in 2022, only 4 times the PE based on the net profit in 21, and only 2 times the PB based on the net assets in 22. This is rare in the field of chip mergers and acquisitions, and it is quite cost-effective.
Beijing Xineng, a subsidiary of Pathfinder, and G2 Touch belong to the upstream chip design industry of the display panel industry. Their products are highly synergistic and their customers also have considerable overlap. After the completion of this transaction, G2 Touch's products are expected to expand rapidly in the country and form industrial scale benefits.
ANNA