Hengshang Energy Saving (603137.SH): The only way to obtain memory chips from the target Jinsheng Electronics is through procurement from upstream suppliers

Zhitong Finance App News, Hengshang Energy Saving (603137.SH) responded to the Shanghai Stock Exchange's inquiry letter on the disclosure of information on major asset purchase plans. The company plans to acquire 100% of Jinsheng Electronics' shares for no more than 600 million yuan. The main business of the target company is R&D, design, manufacturing and sales of solid-state drives, memory sticks, etc. The production process is not simple assembly, nor is it an assembly manufacturer that simply assembles outsourced components. It is a storage module with storage particle screening testing, firmware adaptation, product customization, SMT process control, automated testing and quality management as the core Product providers.

Currently, the target company's business links are not involved in high value-added fields. The core raw materials of the target company are memory chips, and production capacity is mainly concentrated in a few domestic and foreign chip manufacturers. The target company does not have the ability to develop, produce, or manufacture memory chips, and the only way to obtain memory chips is through procurement from upstream suppliers. In the future, if major suppliers experience business abnormalities, production capacity adjustments, supply policy changes, or adverse changes in the cooperative relationship between the two parties, the target company may not be able to obtain timely and sufficient supply of the main raw materials.

At the same time, fluctuations in the price of memory chips have a great impact on the operating performance of the target company. For example, the price of memory chips is rapidly rising, and the target company is unable to transfer cost changes to the price increase of memory products in a timely manner, which may cause the target company's gross margin to decline; if the price of memory chips is rapidly declining, it may be that the target company's inventory needs to be prepared for the price drop.