NationStar Optoelectronics plans to inject RMB 220 million into NationStar Semiconductor to expand its LED chip business

On March 6, NationStar Optoelectronics announced that, in order to meet the needs of its wholly-owned subsidiary Foshan NationStar Semiconductor Technology Co., Ltd. (hereinafter referred to as "NationStar Semiconductor") to increase production capacity and optimize its product structure, the company plans to inject RMB 220 million of its own funds into NationStar Semiconductor. After this capital increase, the registered capital of NationStar Semiconductor will increase from RMB 600 million to RMB 820 million.

The announcement shows that Guoxing Semiconductor is mainly engaged in the production, R&D, and sales of LED epitaxial wafers and chips, LED devices, LED light sources and luminaires, and semiconductor optoelectronic products. In 2019 and from January to September 2020, it achieved revenue of RMB 321 million and RMB 132 million respectively, with net profits of -RMB 84.6743 million and -RMB 39.9263 million respectively.

NationStar Optoelectronics stated that NationStar Semiconductor is a key support for the company's full implementation of the strategy "based on packaging, strengthening and expanding, while taking into account vertical integration of upstream and downstream." The capital increase this time is mainly used for NationStar Semiconductor to implement technical transformation projects, with specific applications including purchasing related equipment, raw materials, and supplementing working capital. The capital increase aims to promote the development of the company's LED upstream chip business, aligns with the company's overall development strategy and the long-term interests of shareholders, helps further optimize the upstream chip product structure, enhance business profitability, deepen the synergistic effects of the supply chain, and plays an important role in improving the company's comprehensive competitive strength and risk resistance capabilities.

The announcement indicates that after the capital increase, NationStar Semiconductor may be affected by risks such as policy changes, market competition, and operational management in its actual operations, and investment returns may be uncertain. The company will continue to strengthen fund management and overseas investment risk management for NationStar Semiconductor, and actively prevent and reduce related risks through professional operation and management.