Visionox Buys Visionox?
by issing new shares and using the cash to buy a controlling interest in Hefei Visionox Technology Company (pvt) a company in which it currently owns an 18.18% stake. While this sounds a bit like the company buying itself, it does have some nuance that does not seem obvios on the surface. Visionox, the listed company, owns two Gen 5.5 OLED lines in Kunsham and two Gen 6 OLED lines in Guan, and while we included two additional Gen 6 lines in Hebei, they are not technically under the ownership of the listed company.
In fact, the 18.18% share that Visionox owns in the Hefei fab makes them the smallest owner, with Hefei Xingrong Investment Co,, Hefei Core Screen Investment Fund, and Hefei Heping Investment Co, each owning 27.27% of the Hefei fab. It turns out that two of the three holders mentioned are state controlled, likely the original investors that provided the capital for the fab, given their location, and the third is a private investment fund that seems to be aligned with state interests. So why would it become important to Visionox to become the majority shareholder of the Hefei Gen 6 OLED fab?
It seems that the Hefei fab is the most technically sophisticated of the Visionox fabs, and the one suplying most, if not all of Visionox’s LTPO OLED display products, which we suspect is why Visionox wants actual control of the Hefei fab. With Apple (AAPL) the biggest prponent of LTPO OLED displays, Visionox seems to be positioning itself to have more visible control as it develops its LTPO product line, and likely less control by state -owned entities. This would make Visionox less likely to face anti-China rhetoric that might occur if it were able to become a visible LTPO supplier to Apple (or others).
We expect that Samsung Display (pvt) and LG Display (LPL), both of whom are providing LTPO OLED displays to Apple would somehow bring in the ‘;state’ issue, should Apple qualify Visionox in the future, with even China’s own BOE (200725.CH) facing considerable anti-China sentiment as it develops it LTPO capabilities to meet Apple’s requirements. \While we cannot be sure about the motivation behind Visionox’s acquisition of control in the Hefei fab, it seems logial that if they are going to fund and develop LTPO capabilities, they would like to be the beneficiary of the potential profits, while presenting a more ‘global’ face should such issues come up in the future.
In fact, the 18.18% share that Visionox owns in the Hefei fab makes them the smallest owner, with Hefei Xingrong Investment Co,, Hefei Core Screen Investment Fund, and Hefei Heping Investment Co, each owning 27.27% of the Hefei fab. It turns out that two of the three holders mentioned are state controlled, likely the original investors that provided the capital for the fab, given their location, and the third is a private investment fund that seems to be aligned with state interests. So why would it become important to Visionox to become the majority shareholder of the Hefei Gen 6 OLED fab?
It seems that the Hefei fab is the most technically sophisticated of the Visionox fabs, and the one suplying most, if not all of Visionox’s LTPO OLED display products, which we suspect is why Visionox wants actual control of the Hefei fab. With Apple (AAPL) the biggest prponent of LTPO OLED displays, Visionox seems to be positioning itself to have more visible control as it develops its LTPO product line, and likely less control by state -owned entities. This would make Visionox less likely to face anti-China rhetoric that might occur if it were able to become a visible LTPO supplier to Apple (or others).
We expect that Samsung Display (pvt) and LG Display (LPL), both of whom are providing LTPO OLED displays to Apple would somehow bring in the ‘;state’ issue, should Apple qualify Visionox in the future, with even China’s own BOE (200725.CH) facing considerable anti-China sentiment as it develops it LTPO capabilities to meet Apple’s requirements. \While we cannot be sure about the motivation behind Visionox’s acquisition of control in the Hefei fab, it seems logial that if they are going to fund and develop LTPO capabilities, they would like to be the beneficiary of the potential profits, while presenting a more ‘global’ face should such issues come up in the future.
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