Tianyin Holdings acquired 30% of the equity of Dongguan Weike and settled to extend the company's mobile phone industry chain to enhance its core competitiveness

Zhang Lu, a betrothed news reporter of the Yangtze River Business Daily

000829.SZ, the domestic smart terminal distribution leader, is constantly extending the mobile phone industry chain.

On February 8, Tianyin Communication Holdings Co., Ltd. (hereinafter referred to as "Tianyin Holdings") announced the completion of the acquisition of 30% of the equity of Victer&W Terminal Technology (Dongguan) Co., Ltd., a wholly-owned subsidiary of Tianyin Communications.

According to the announcement, as of January 30, 2022, Dongguan Weike has completed the change registration procedures with the Dongguan Market Supervision and Administration Bureau, and obtained the reissued "Business License", and the delivery of the acquisition of 30% of the equity of Dongguan Weike in this transaction has been completed. After that, the company and the parties to the transaction will actively promote and complete the relevant work after the closing in accordance with the provisions of the transaction agreement and the shareholders' agreement.

According to the previous announcement, Tianyin Communications, Dongguan Trust, Jianxin Trust and Jinweike Fund, as the transferees, intend to acquire a total of 100% of the equity of Dongguan Weike held by Shenzhen Tianlong Mobile Technology Co., Ltd. (hereinafter referred to as "Tianlong Mobile"), with a transaction price of 1 billion yuan, of which Tianyin Communication intends to participate in the acquisition of 30% of the equity of Dongguan Weike with its own funds of 300 million yuan.

At the same time, the four transferees will also provide Dongguan Weike with a total of 500 million yuan of operating funds for daily operations through capital increase in accordance with the equity ratio, of which Tianyin Communication will increase the capital of Dongguan Weike with its own funds of 150 million yuan.

According to the announcement, Dongguan Weike was established on October 18, 2021. On October 26, Tianlong Mobile signed an internal asset transfer agreement with Dongguan Weike, which stipulated that Tianlong Mobile intends to transfer the patented technology, trademark, independent research and development IT system and related equipment related to the WIKO brand mobile phone to Dongguan Weike, and Dongguan Weike enjoys the corresponding rights of the assets to be transferred from the date of signing the agreement.

As of November 30, 2021, Dongguan Weike has received a registered capital of 100 million yuan (mainly used to pay the amount of internal transfer assets), dongguan Weike book assets value of 100 million yuan, book liabilities value of 100 million yuan, book net asset value of 100 million yuan.

The Pentium News reporter of Changjiang Business Daily learned that after the completion of this transaction, the main business of Dongguan Weike is the planning and research and development of wiKO mobile phone brand and other related businesses. In 2020 and the first 10 months of 2021, the simulated consolidated operating income of WIKO brand mobile phone business was 1.491 billion yuan and 886 million yuan, respectively, and the net profit was 41.1917 million yuan and 13.9886 million yuan, respectively.

Tianyin Holdings said that through this transaction, relying on the company's rich channel resources and comprehensive industrial integration capabilities, with the help of WIKO's mature own brand, supplier system, sales channels and operating resources, it will connect the close linkage between mobile phone ODM manufacturers, brand manufacturers and distribution channels, and build the target company into a mobile phone brand manufacturer focusing on research and development and sales.

In addition, Tianyin Holdings particularly reminded that due to THE NEED FOR NECESSARY INVESTMENT IN THE PROCESS OF RE-ESTABLISHMENT OF THE BUSINESS SYSTEM, WIKO NEEDS TO MAKE THE NECESSARY INVESTMENT TO RESTORE THE BRAND IMAGE IN THE EUROPEAN MARKET AND ENHANCE ITS VISIBILITY IN EMERGING MARKETS. Therefore, short-term losses may occur in the early stage of WIKO's business, and the loss of investment income generated by holding 30% of the equity of the target company will adversely affect the company's performance in the short term. With the future expansion of WIKO's business production and sales scale, the revenue and profit growth will have a positive impact on the company's performance.

According to public information, Tianyin Holdings is the only agent in China that has the authorization of Apple's online, offline distribution and offline retail channels, and is also the largest supplier of Apple brands on the Jingdong platform, and the company has also established long-term in-depth cooperation with Huawei, Samsung and other head brands.

In addition to the core business of intelligent terminal distribution, Tianyin Holdings also has e-cigarettes, lottery tickets, retail e-commerce and other business sectors, actively grasping emerging industry opportunities and further expanding the company's development space.

In terms of performance, the financial report shows that Tianyin Holdings is expected to achieve operating income of 70.3 billion yuan – 70.9 billion yuan in 2021, an increase of 17.59% – 18.59% year-on-year; it is expected to achieve a net profit attributable to the mother of 200 million yuan – 230 million yuan, an increase of 7.47% – 23.59% year-on-year; and it is expected to achieve a net profit of 180 million – 210 million yuan after deducting non-recurring gains and losses, an increase of 2245.46% – 2636.37% year-on-year.