There are currently 3.28 billion acquisitions in the lighting field, and the target business involves automotive LEDs

In October 2024, Shanghai Jingfeng Mingyuan Semiconductor Co., Ltd. (hereinafter referred to as "Jingfeng Mingyuan"), a manufacturer related to LED lighting driver ICs, announced its plan to acquire Sichuan Yichong Technology Co., Ltd. (hereinafter referred to as "Yichong Technology") and raise supporting funds. Yesterday (4/23) evening, Jingfeng Mingyuan announced the latest progress. It plans to acquire 100% equity of Yichong Technology through the issuance of shares and payment of cash. The transaction price is 3.2826375 million yuan.

Leverage Yichong Technology to improve the layout of automotive LED driver ICs

Yichong Technology is mainly engaged in the research and development, design and sales of high-performance analog chips and digital-analog mixed-signal chips such as wireless charging chips, universal charging chips, automotive power management chips, AC/DC and protocol chips.

Among them, automotive power management chip products cover car-standard wireless charging chips and smart car headlight and taillight LED driver chips, high/low-side driver chips &eFuse and car-standard DC/DC chips. It is worth noting that the company is said to be one of the few domestic suppliers that has successfully mass-produced automotive smart headlight driver ICs. Currently, Yichong Technology’s customers in the automotive field include BYD, Geely, Chery, Thalys, Changan and other brands.

Jingfeng Mingyuan’s main business focuses on the two major sectors of power management chips and control driver chips. Its products cover four major matrices: LED lighting driver chips, motor control driver chips, AC/DC power chips and high-performance computing power chips. Currently, LED lighting driver chip business accounts for the highest proportion. In 2024, affected by fierce competition in general LED products and sales growth that is not as strong as the unit price drop, Jingfeng Mingyuan's LED lighting driver chip business will achieve sales revenue of 869 million yuan, a year-on-year decrease of 7.82%.

At this stage, Jingfeng Mingyuan is optimizing the product structure of LED lighting driver chips and expanding the layout of smart lighting products. As far as the LED lighting driver chip business is concerned, Yichong Technology's smart car headlight and taillight LED driver chips have a strong synergistic relationship with Jingfeng Mingyuan's LED lighting drivers, which will help Jingfeng Mingyuan quickly seize business opportunities in the automotive lighting market.

It is understood that in the context of the continuous compression of the development space of LED general lighting, automotive lighting has become one of the rapidly developing market segments of the LED lighting industry, with high growth potential and strong growth momentum.

According to the analysis of TrendForce's "Gold+ Member Market Report: Global LED Industry Database and Quarterly Update of LED Manufacturers", as the automobile market production is expected to recover again in the second half of 2025, and 2026 car models will continue to plan to introduce advanced technologies, the output value of the automotive LED market is expected to grow to US$3.509 billion in 2025. It can be seen that the demand for the automotive LED industry chain and supporting products will usher in growth.

After completing the layout of automotive LED driver chips through the acquisition of Yichong Technology, Jingfeng Mingyuan is expected to further enhance the profitability of the lighting business segment in the future.

Enhance comprehensive competitiveness with "endogenous growth + external mergers and acquisitions"

From the perspective of the company's overall business, Jingfeng Mingyuan's acquisition of Yichong Technology is consistent with its development strategy in recent years. Against the background of declining performance, Jingfeng Mingyuan actively combines endogenous R&D and external M&A to expand three new product lines, high-performance computing power chips, AC/DC power chips, and motor control driver chips, in addition to the LED product line. It aims to build a second growth curve, reduce dependence on a single market, and enhance overall competitiveness.

In the direction of epitaxial mergers and acquisitions, Jingfeng Mingyuan has carried out intensive acquisitions in recent years.

It can be seen from the business of the acquisition target that Jingfeng Mingyuan integrates resources from all parties through external extension to enhance the company's competitiveness in the field of power management chips and control driver chips. While strengthening its market position in the field of LED lighting chips, it gradually improves its layout in the field of semiconductor chip design, better seizes the business opportunities brought by the rapid development of emerging technologies such as 5G, Internet of Things, and new energy vehicles, and gradually gets rid of the dilemma of declining performance.

In 2024, Jingfeng Mingyuan’s performance will be relatively stable, with revenue increasing year-on-year and net profit losses narrowing. Among them, revenue was 1.504 billion yuan, a year-on-year increase of 15.38%, net profit attributable to the parent company decreased by 58.2087 million yuan year-on-year, and non-net profit attributable to the parent company decreased by 137 million yuan year-on-year. The overall gross profit margin increased by 11.45% year-on-year.
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In terms of product structure, the revenue share of LED lighting driver chips has declined, and gross profit margin has increased. The revenue share and gross profit margin of other product lines have increased. Among them, AC/DC power chip products achieved sales revenue of 273 million yuan, a year-on-year increase of 39.64%. Motor control driver chips achieved sales revenue of 318 million yuan, a year-on-year increase of 95.67%. High-performance computing power chips achieved sales revenue of 43 million yuan, a year-on-year increase of 1,402.25%.

It is not difficult to find that after optimizing the product structure and integrating the resources of the acquired companies, Jingfeng Mingyuan's profitability has gradually improved. The acquisition of Yichong Technology is also expected to have a positive impact on its performance growth in 2025 and beyond. In recent years, Yichong Technology's revenue scale has achieved rapid growth. Revenue in 2023 and 2024 will increase by 45.82% and 47.04% respectively year-on-year, showing strong growth potential. Although Yichong Technology is not yet profitable, in the long term, with its business development and performance release, Jingfeng Mingyuan believes that Yichong Technology will continue to improve its profitability.