South Korean fabless chipmaker Dongwoon Anatech successfully took a 40% stake in its China-based joint venture Shenzhen Challwoon Semiconducor for 3.7 billion won ($3.1 million), industry sources said last week.
Dongwoon Anatech had signed a 3.2 million dollar asset-transfer deal with the JV in January this year. The deal was fulfilled earlier this month, handing Dongwoon Anatech enough funds to snap up the stake.
Shenzhen Challwoon Semiconductor is a fabless chipmaker manufacturing AMOLD DC-DC Converters for OLED displays. The firm’s joint investors – chairmen Yu and Qiu – will each take a 33% and 27% in the JV as strategic investors.
Yu currently operates distribution shops for BOE and OmniVision in China. Qiu runs a tech business. Challwoon Semiconductor hopes to take the lead in the Chinese AMOLED market by betting on the Chinese sales network based on Dongwoon Anatech’s technology.
The South Korean firm has high hopes for the JV, and it’s now looking to take itpublic via a listing on the Chinese index for high-tech firms, also known as the “Chinese version of the Nasdaq.”
The index opened just last month, and by drastically cutting the red tape, it allows promising venture firms to get listed quicker and easier. .
“We believe getting listed would give the JV more exposure and help it grow,” said a Dongwoon Anatech official.
Noting that the average PER for fabless firms listed on the main Chinese equities market is about 50 times higher, he forecast significant growth in the JV’s valuation.
Dongwoon Anatech has recently secured ample ammunition for future investments. In March, it pocketed 11.6 billion won from a technology transfer contract it signed with a Hong Kong company. Profitability will continue to grow on snowballing revenues and net profit, according to market watchers.