Shangfeng Cement Invests and Controls Meiqi Circuit Entering Semiconductor Packaging Substrate Business

(Source: Cement Network APP)

On March 16, Shangfeng Cement Co., Ltd. signed a strategic cooperation agreement with Shenzhen Zhijin Electronics in Hangzhou. Shangfeng plans to acquire equity and increase capital to control Shenzhen Zhijin’s subsidiary, Meiqi Circuits (Jiangmen) Co., Ltd. This marks the company’s official entry into the semiconductor packaging substrate business. Both parties will leverage their strengths to accelerate the development of the packaging substrate business. As a key strategic layout in the company’s five-year development plan, this cooperation will further improve the “building materials cornerstone business, equity investment capital business, and new material growth business” three-pronged collaborative development system, injecting new momentum for high-quality corporate growth.

This cooperation is an important decision for Shangfeng Cement, based on the integration of national strategic guidance and the company’s development plan, demonstrating the company’s strategic focus on transformation and development.

From a national strategic perspective, IC packaging substrates are essential foundational materials for semiconductor packaging and serve as critical connection carriers between chips and printed circuit boards. Currently, China’s high-end products in this field have a low self-sufficiency rate. This strategic move actively responds to the national call to encourage investment in developing innovative and emerging pillar industries. From a corporate development standpoint, the cement industry, as a traditional cyclical industry, is currently facing a phase of growth bottlenecks. Meanwhile, the IC packaging substrate industry benefits from the sustained growth of emerging industry demand and is expected to become an important support for the company to break through growth ceilings and cultivate new profit growth points. Regarding internal planning, this acquisition is a pragmatic implementation of the company’s five-year development plan, marking a shift from financial investment in the semiconductor industry to deep industry engagement, integrating equity investment with real operations, and enhancing the layout of new material businesses.

This cooperation is carried out under the premise of ensuring the stable operation of the cement building materials main business. The company adheres to cautious principles, maintaining its main business as the ballast and steadily advancing its “second growth curve” layout. Financially, the company maintains stable operations, with ample cash flow, and a reasonable debt-to-asset ratio. Developing emerging businesses will not pressure the main business financially and will effectively safeguard shareholders’ core interests.

Shangfeng Cement’s layout in the semiconductor materials field has solid feasibility and sustainable development foundations. Since 2020, the company has launched an equity investment strategy across the entire semiconductor industry chain, with total investments exceeding 2 billion yuan, covering more than 20 high-quality semiconductor companies involved in chip manufacturing, packaging testing, materials, and equipment. This has formed a comprehensive investment system and industry chain synergy advantage. Many of these invested companies can support supply chain collaboration and empowerment for the packaging substrate business.

Three-pronged collaborative efforts to empower high-quality corporate development

With the implementation of the “three-pronged” approach, the company can achieve high-quality synergistic development: The cornerstone building materials business will focus on “excellence,” deepening efforts, improving quality and efficiency, and strengthening the foundation for corporate growth, while providing stable cash flow support and lean management empowerment for the new material business; the equity investment capital business will prioritize “stability,” controlling overall risk through strict scope and risk management, forming a virtuous cycle of “investment–cultivation–exit–reinvestment,” and providing resource empowerment for the supply chain of the new material business; the growth-oriented new material business will prioritize “speed,” increasing investment, expanding teams, enhancing technological capabilities and industrial scale, and rapidly iterating the IC packaging substrate business toward larger scale and higher-end development, while also enriching the pipeline of new projects for equity investment. Leveraging the advantages of a mixed-ownership mechanism, the company will steadily promote the coordinated development of these three businesses, driving long-term value enhancement.

Source: Shangfeng Cement

Massive information, precise analysis, all on Sina Finance APP