A highly anticipated high-premium acquisition was called off at the request of the seller, resulting in the termination of the "lightning deal."
On the evening of October 23, Yangzhou Yangjie Electronic Technology Co., Ltd. (hereinafter "Yangjie Technology") announced its decision to terminate the cash acquisition of 100% equity in Dongguan Beite Electronics Technology Co., Ltd. (hereinafter "Beite Electronics"). This transaction had previously drawn extensive attention due to its staggering 282.89% assessment appreciation rate, performance agreement clauses, and a stock pledge alongside potential performance compensation of up to 1.108 billion yuan.
Beite Electronics initiated the halt. Specifically, the acquisition was halted at the initiative of the actual controller and major shareholders of Beite Electronics. The announcement stated that on October 23, Yangjie Technology received a notice signed by the actual controller and major shareholders of Beite Electronics regarding the termination of the transfer of their shares.
The notice indicated that there were significant differences between Yangjie Technology and Beite Electronics in terms of business type, management style, and corporate culture, leading to considerable disagreements regarding the future operational philosophy and management approach of Beite Electronics. After careful consideration, the decision was made to terminate the transfer of shares to Yangjie Technology.
Yangjie Technology noted in its announcement that the primary aim of this transaction was to acquire 100% equity of Beite Electronics. Given that the major shareholders and actual controllers of Beite Electronics have now decided to halt the transfer, the purpose of Yangjie Technology for this acquisition can no longer be realized.
It should be noted that according to the previous share transfer agreement signed by both parties, the termination clause explicitly states that if any party from Party B (Beite Electronics) violates the agreement, resulting in Party A (Yangjie Technology) not acquiring at least 51% of the equity or failing to acquire equity held by any critical shareholders, the violating party shall pay 20% of the agreed transfer price as a penalty to Party A.
However, in the announcement, the board of directors of Yangjie Technology stated, “We agree not to claim liability for breach of contract against the aforementioned shareholders.” Yangjie Technology explained that as of the date of the announcement, it had not yet paid the equity transfer funds, and the shares had not been delivered, thus there would be no economic loss to the company, no adverse impact on its financial condition, and no harm to the interests of the company and small investors.
Public information shows that Beite Electronics was established in 2003 and focuses on the R&D and innovation of mid-to-high-end electronic and electrical circuit protection components. Its main products include power fuses, electronic fuses, resettable fuse links, disposable thermal fuses, and resettable temperature controllers, extensively used in home appliances, new energy vehicles, photovoltaics, energy storage, and rail transportation. The company's clients include leading enterprises such as Midea, Gree, and BYD.
In 2016, Beite Electronics was listed on the New Third Board, and in June 2023, it launched an IPO attempt on the ChiNext. However, the Shenzhen Stock Exchange raised multiple inquiries about its acquisition integration and performance-related matters.
Specifically, the Shenzhen Stock Exchange mainly inquired about Beite Electronics' acquisition of Dongguan Boyue and whether it constituted a significant asset reorganization. The inquiry letter highlighted concerns regarding the reasons and sustainability of significant performance growth post-acquisition and the primary sources of profits.
It is noteworthy that the exchange directly inquired whether Beite Electronics had engaged in a situation to artificially enhance its listing qualifications. Beite Electronics responded that its core business, main products, and areas of application had not changed pre- and post-acquisition, and after integrating control over Dongguan Boyue's operations, it did not merely run two independent operations to meet listing conditions. Beite Electronics also stated that it still met the legal and regulatory requirements for issuance and listing even without Dongguan Boyue.
However, after its initial round of inquiries, Beite Electronics did not respond to the second round of inquiries and ultimately withdrew its IPO application in August 2024.
Strict Performance Undertakings
In fact, as early as March of this year, Yangjie Technology intended to acquire Beite Electronics. In March, the company first disclosed a restructuring plan to acquire 100% of Beite Electronics through both cash payments and equity issuance, while raising supporting funds. Although this plan was terminated in July, Yangjie Technology immediately expressed its intention to continue pursuing the acquisition of part or all of Beite Electronics' equity in cash. As of September 11, the company officially announced plans to acquire 100% of Beite Electronics for 2.218 billion yuan. Upon completion, Beite Electronics would become a wholly-owned subsidiary.
Public records indicate that Yangjie Technology was established in 2006 and is an integrated industry chain vertical enterprise (IDM) specializing in semiconductor discrete device chip design and manufacturing, device packaging testing, and terminal sales services. The company went public on the ChiNext in 2014, with its actual controller, Liang Qin, being a well-known female entrepreneur in the industry. In 2023, she was listed with a fortune of 13.5 billion yuan on the Hurun Global Rich List, becoming the richest woman in Yangzhou.
According to the third-quarter report for 2025, the company achieved revenue of 5.348 billion yuan from January to September, a year-on-year increase of 20.89%. Its net profit attributable to shareholders was 974 million yuan, up 45.51%, and the net cash flow from operating activities was 1.017 billion yuan, reflecting a 15% increase year on year.
It is worth noting that this acquisition's valuation represented a substantial premium over Beite Electronics' book net assets. As of the assessment base date, the total equity value assessment was 2.22 billion yuan, indicating an increase of 1.64 billion yuan over the book value of net assets of 580 million yuan, resulting in an appreciation rate of 282.89%. To ensure transaction rationality, stringent performance commitments were established for this acquisition. The performance commitment parties guarantee that from 2025 to 2027, the total net profit attributable to the parent of Beite Electronics, excluding non-recurring profits, will not be less than 555 million yuan. If by the end of 2027, the actual net profit falls below 90% of the promised amount, the committing party must pay up to 1.108 billion yuan as performance compensation to Yangjie Technology.
To further mitigate risk, Yangjie Technology incorporated share purchase and locking clauses: the committed party must invest 716 million yuan to purchase Yangjie Technology's stock and fully pledge it to the listed company as security for fulfilling the performance commitment. On the other hand, to incentivize excess performance, both parties also established an excess performance reward not exceeding 40 million yuan.
Despite Beite Electronics’ remarkable growth in recent years, with net profit climbing from 90.25 million yuan in 2022 to 148 million yuan in 2024, achieving the performance target remains a significant challenge. The total promised net profit over three years is 555 million yuan, implying an average annual net profit requirement of about 185 million yuan for the next three years. Based on the 2024 net profit of 148 million yuan, an approximate 25% increase is required for 2025, with sustained high compound growth rates necessary between 2025 and 2027.
