Suoao Sensor Receives Antitrust Approval for Acquisition by Zhongchuang Xinhang

Suoao Sensor has received the "No Further Review Decision" from the State Administration for Market Regulation, allowing Zhongchuang Xinhang's acquisition of Jiangsu Aoliwei Sensor Technology Co., Ltd. to proceed. On the evening of July 25, Suoao Sensor (300507) announced that its controlling shareholder and actual controller, Li Hongqing, signed a "Share Transfer Agreement" and a "Voting Rights Waiver Agreement" with Zhongchuang Xinhang (03931.hk) to transfer control of the company through share transfer and waiver of voting rights. After the transfer, Zhongchuang Xinhang will hold 30.00% of Suoao Sensor's shares and waive all voting rights, making Zhongchuang Xinhang the controlling shareholder and its chairman Liu Jingyu the actual controller. Suoao Sensor also plans to issue new shares to Zhongchuang Xinhang, which will fully subscribe to them. The decision from the market regulator signifies a critical step forward in the "H-to-A" process between Zhongchuang Xinhang and Suoao Sensor. However, the announcement also clarifies that this change of control requires compliance confirmation from the Shenzhen Stock Exchange and the completion of share transfer registration procedures. Notably, on May 6 this year, Zhongchuang Xinhang and Suoao Sensor announced that Zhongchuang Xinhang intended to invest approximately 1.18 billion RMB to acquire 22.61% of Suoao Sensor's shares, becoming its controlling shareholder. It appears that Zhongchuang Xinhang's planned ownership has increased. As a major player in the lithium battery sector, the reasons behind its interest in acquiring Suoao Sensor, an A-share company, are noteworthy. Suoao Sensor is a national high-tech enterprise that has long been focused on the automotive parts industry, providing high-quality components and services to automotive manufacturers. Recent annual reports indicate significant changes in the automotive parts industry landscape, with increasing market competition and a clear trend towards global procurement. The rapid development of new energy vehicles has driven changes in components related to power systems, vehicle structures, and intelligent services. Suoao Sensor has keenly captured these industry trends and actively sought to transition into the new energy vehicle parts sector. In response to the trends in new energy and intelligence, Suoao Sensor has developed current sensors with excellent performance in dynamic range, temperature compensation, and battery safety monitoring; its eddy current sensors, as key components for electric vehicle motors, are characterized by high precision, lightweight, and durability, making them suitable for automotive and new aircraft applications. Additionally, the company's AMB silicon nitride copper-clad substrate has broken through the 800V high-voltage platform technology bottleneck, leading the industry in thermal conductivity and high-temperature resistance, thus providing crucial support for high-power electric vehicle models. On the market expansion front, Suoao Sensor has deeply integrated into the new energy industry chain, with several sensors customized for hybrid systems passing tests and certifications from major automotive manufacturers. Among these, the air suspension temperature sensor has become a standard product for mainstream suppliers, and the GPF differential pressure sensing system has officially entered the road testing phase. In the thermal management sector, the seal-less air conditioning pressure sensor and P+T sensor developed based on MSG technology have successfully replaced traditional domestic ceramic core sensors, achieving significant cost reductions while enhancing pressure resistance and medium corrosion resistance, further enriching the company's application scenarios in thermal management. Suoao Sensor's new energy components are experiencing rapid growth, with significant year-on-year increases in sales of new energy products expected in 2024. The company serves major new energy manufacturers and first-tier parts suppliers, with innovative products such as Busbar copper busbars and high/low voltage filter components achieving large-scale deliveries and gaining substantial market share. Suoao Sensor has established multi-level strategic collaborative networks within the automotive industry chain, forming deep partnerships with mainstream vehicle manufacturers such as NIO, Xpeng Motors, BYD, Great Wall Motors, SAIC-GM, Shanghai Automotive, Geely, Jiangling Motors, and Chongqing Seres. In its first-tier supplier system, it has maintained stable technical relationships with leading international component suppliers like United Electronics, YAPP, BorgWarner, Hutchinson, and Lokate, creating a penetration network covering mainstream automakers. In terms of performance, Suoao Sensor achieved revenues of 1.67 billion RMB in 2024, a year-on-year increase of 48.87%, primarily due to the consolidated revenues from its subsidiary Bonair in the fourth quarter. The net profit attributable to shareholders was 138 million RMB, an increase of 11.31% from the previous year. Notably, Suoao Sensor's production capacity in new energy vehicle components is sufficient, with a production output of 11.49 million units and sales of 11.03 million units in 2024, generating 254 million RMB in sales revenue. In summary, the business synergies between Suoao Sensor and Zhongchuang Xinhang suggest that if the acquisition is successful, it will undoubtedly provide support for Suoao Sensor in the competitive new energy battery market. Moreover, with deep empowerment from Zhongchuang Xinhang, Suoao Sensor will further break through its traditional role as an automotive parts supplier and fully integrate into the value network of the new energy industry chain.