Yingfang Micro (000670.SZ) In-Depth Analysis Report on Acquisition Strategy Adjustment

Now I will provide you with a comprehensive strategic analysis and investment value assessment report on Yingfang Micro’s acquisition strategy adjustment.

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Yingfang Micro issued an announcement on January 19, 2026, stating that it would terminate the equity acquisition of Shiqing Intelligence Technology (Shanghai) Co., Ltd., and continue to advance the acquisitions of Shanghai Shockley Information Technology Co., Ltd. and Fushide China Co., Ltd. The company’s stock will resume trading at the opening of the market on January 20, 2026[1][2].

The core reason for this acquisition strategy adjustment is

[1]. This decision marks a major change in the company’s original strategic layout of “package” acquiring controlling stakes in three companies.

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According to the latest financial data, Yingfang Micro achieved operating revenue of RMB 3.443 billion in the first three quarters of 2025, a year-on-year increase of 17.62%, but its net profit attributable to shareholders was a loss of RMB 43.34 million, showing the typical characteristic of “growing revenue without growing profits”[1][3].

Financial Indicator	1Q-3Q 2025	H1 2025	Full Year 2024
Operating Revenue	RMB 3.443 billion	RMB 1.927 billion	Approx. RMB 3.8 billion
Net Profit Attributable to Shareholders	-RMB 43.34 million	-RMB 32 million	Approx. RMB 15 million
YoY Growth	+17.62%	+4.48%	N/A

• Sluggish revenue growth
  : Although revenue grew 17.62% YoY in the first three quarters, it mainly relied on the scale expansion of electronic component distribution business, and profitability continued to face pressure[3]
• Main business loss
  : The company mainly conducts electronic component distribution business through its holding subsidiaries Huaxin Technology and World Style, with a small proportion of chip design business[3]
• Volatile historical performance
  : The company recorded negative net profit for three consecutive years from 2017 to 2019, and was suspended from listing on the Shenzhen Stock Exchange in April 2020[4]

Valuation Indicator	Value	Industry Comparison
Market Capitalization	USD 6.35 billion	—
P/E (TTM)	-91.76x	In Loss
P/B (TTM)	227.39x	Significantly Overvalued
P/S (TTM)	1.38x	Relatively Reasonable

From a valuation perspective, the company’s P/B ratio is as high as 227x, reflecting high market expectations for asset revaluation, while continuous losses have rendered the P/E indicator invalid[0].

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Yingfang Micro originally planned to “package” acquire three industrial chain companies to build a complete industrial chain from chip design and distribution to packaging and testing services[3][4].

• Emerging AIoT chip enterprise, founded in 2018, national-level specialized, sophisticated, unique, and new “little giant” enterprise
• Focuses on R&D of edge intelligent interaction and signal processing chips, adopting RISC-V architecture
• Has received multiple rounds of investment from well-known institutions such as SIG Asia and Pudong Science and Technology Innovation
• Selected into the Pudong New Area Integrated Circuit Industry High-Quality Development Special Funding List in September 2025

• Established electronic component agent, founded in 2005, once listed on the NEEQ (New Third Board)
• Represents international giants including ROHM, TOSHIBA, and MURATA
• Reported operating revenue of RMB 487 million and net profit of RMB 20.22 million in H1 2018
• Covers multiple fields including consumer electronics, automotive electronics, and industry

• Founded in 2006, its predecessor can be traced back to the 1896-founded Xinghua Electronics Group
• Engaged in semiconductor packaging and testing, and distribution of electronic component surface mount technology (SMT) equipment
• Acts as an agent for Japanese FUJI SMT equipment in the Chinese market

1. Missed technology upgrade window
   : Shiqing Intelligence has strong technical accumulation in RISC-V processors and AIoT chips; terminating the acquisition deprives Yingfang Micro of the opportunity to quickly strengthen its chip design capabilities
2. Impaired strategic integrity
   : The businesses of the three companies in the original plan are highly complementary; without Shiqing Intelligence, the effect of industrial chain integration will be greatly reduced
3. Unmet market expectations
   : Investors previously had high expectations for this “package” restructuring; terminating part of the acquisition may trigger a stock price adjustment

1. Reduced integration difficulty
   : Shiqing Intelligence is a R&D-driven technology company, with significant differences from Yingfang Micro’s existing business model; terminating the acquisition can avoid cultural conflicts and management pressure[4]
2. Focus on core targets
   : Resources will be concentrated on Shanghai Shockley and Fushide China, which is conducive to improving acquisition success rate and integration effect
3. Reduced financial risk
   : Avoid overpaying for a high-valued technology company, reducing the risk of goodwill impairment

• Forms channel synergy with Yingfang Micro’s existing electronic component distribution business
• Expands the agent brand matrix and enhances supply chain discourse power
• Expands end-customer coverage areas

• Enters the mid-stream packaging and testing segment of the semiconductor industrial chain
• Enhances understanding and service capabilities for the manufacturing side
• Forms industrial linkage with upstream and downstream

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According to technical analysis results[0]:

Indicator	Value	Signal Interpretation
MACD	No Crossover	Bullish-Tilting
KDJ	K:67.6, D:60.5, J:81.8	Buy Signal
RSI (14)	Overbought Zone	Watch for Pullback Risk
Beta	0.46	Low Volatility, Low Correlation with Market
Trend Judgment	Sideways Consolidation	No Clear Direction

• Support Level
  : RMB 7.44
• Resistance Level
  : RMB 7.83
• Current Price
  : RMB 7.73

On the last trading day before resumption (January 5, 2026), the company’s stock closed at RMB 7.73. During the 10 trading days before suspension (October 9, 2025 to January 5, 2026), the stock price fell from RMB 9.05 to RMB 7.73, a decline of 14.59%, with an amplitude of 28.51%[0].

• The stock price is in a consolidation phase within a medium-term downtrend
• The 50-day moving average (RMB 7.76) is basically flat with the current price
• Trading volume shrank before the suspension, and the market is in a strong wait-and-see mood

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According to DCF model analysis[0]:

Scenario	Intrinsic Value	vs. Current Price
Bearish Scenario	-RMB 58.10	-851.6%
Base Case Scenario	-RMB 80.21	-1137.6%
Bullish Scenario	-RMB 133.05	-1821.2%

DCF valuation results show the company’s intrinsic value is negative, mainly due to the following reasons:

1. The company is continuously losing money and has insufficient free cash flow generation capacity
2. The average net profit margin over the past five years is -0.2%
3. WACC is as high as 7.8%, creating significant discount pressure on long-term cash flows

• Revenue Growth Rate: 53.4%-58.4% (based on 5-year historical CAGR)
• EBITDA Margin: 2.6%-2.9% (extremely thin)
• Terminal Growth Rate: 2.0%-3.0%

Parameter	Base Value	Impact of Change
Revenue Growth Rate	55.4%	For every 1% change, valuation changes by approx. 15%
EBITDA Margin	2.8%	For every 0.5% change, valuation changes by approx. 25%
WACC	7.8%	For every 0.5% change, valuation changes in the opposite direction by approx. 20%

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Yingfang Micro has attempted major asset restructuring three times in history, all of which failed[4]:

Time	Target	Reason for Failure
2021	Remaining Equity of Huaxin Technology and World Style	Voted Down
July 2023	Remaining Equity of Huaxin Technology and World Style	Changes in Market Environment
October 2024	Remaining Equity of Huaxin Technology and World Style	Formal Investigation for Insider Information Leakage

1. The company has a low restructuring success rate in history, and there are still uncertainties in this acquisition
2. Audit and assessment work has not been completed; a board meeting will be held again for review and a shareholders’ meeting will be convened subsequently
3. There are still variables in the pricing of target assets and transaction structure

Risk Category	Details	Risk Level
Acquisition Risk	Due diligence and valuation disputes for Shanghai Shockley and Fushide China	High
Approval Risk	Regulatory approval and shareholders’ meeting review	Medium
Integration Risk	Business model differences and cultural conflicts	High
Operation Risk	Continuous loss of main business and weak profitability	High
Market Risk	Cyclical fluctuations in the semiconductor industry	Medium

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• Terminating the acquisition of Shiqing Intelligence is a pragmatic choice, reducing integration risks and management pressure
• Continuing to advance the acquisitions of Shanghai Shockley and Fushide China will help consolidate the foundation of the distribution business
• However, the overall strategic integrity is impaired, increasing the difficulty of transforming from “chip + distribution” to integrated “design - application - channel”

• The company continues to lose money, and its profitability has not been fundamentally improved
• DCF valuation shows negative intrinsic value, with overvaluation risk
• Revenue growth mainly relies on scale expansion of the distribution business, with doubts about its quality and sustainability

• The current stock price of RMB 7.73 is near the key support level
• Technical indicators show a sideways consolidation pattern; the direction needs to be observed
• Considering continuous losses and high valuation, it is recommended to view cautiously

1. The company’s fundamentals are weak, and the profitability of its main business continues to face pressure
2. The acquisition strategy adjustment reduces risks but also weakens the market’s imagination space
3. Three failed restructurings in history have frustrated investor confidence
4. DCF valuation shows overvaluation, and the risk-return ratio is not attractive

• Short-term Investors
  : Observe the stock price reaction after resumption; if there is a sharp decline, you can lightly position to bet on a rebound
• Mid-to-Long-term Investors
  : It is recommended to wait for the acquisition plan to be clarified and profitability to improve before considering entry
• Risk-Prone Investors
  : Can pay attention to subsequent acquisition progress and performance improvement signals

Indicator	Focus of Observation	Time Node
Acquisition Progress	Audit and assessment results of Shanghai Shockley and Fushide China	Q1 2026
Performance Improvement	Time point when net profit turns positive	2026 Half-Year Report
Stock Performance	Whether it can break through the resistance level of RMB 7.83	3-5 trading days after resumption
Industry Prosperity	Cyclical changes in the semiconductor industry	Continuous Tracking

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[1] Sina Finance - “Yingfang Micro Terminates Acquisition of Shiqing Intelligence, Stock to Resume Trading on January 20” (https://finance.sina.com.cn/stock/zqgd/2026-01-19/doc-inhhwavr6741728.shtml)

[2] Eastmoney - “Yingfang Micro Terminates Acquisition of Shiqing Intelligence, Stock to Resume Trading on January 20” (https://wap.eastmoney.com/a/202601193623558273.html)

[3] International Finance News - “Main Business Continues to Lose Money! Three Failed Restructurings! This Company Sets Sights on Three Chip Companies” (https://www.ifnews.com/news.html?aid=796624&cid=39)

[4] ESM China - “Suspended for Restructuring! Yingfang Micro Plans to Take Control of Three Enterprises, Can It Break the Deadlock in High-End Chips?” (https://www.esmchina.com/news/13812.html)

[0] Jinling AI Financial Database - Company financial data, valuation analysis, technical indicators