Trek 2000 International says its wholly-owned subsidiary, Trek Technology (Singapore), has entered into a share subscription agreement with China Chips Star Semiconductors (CCSS), according to an Oct 9 release.
Under the agreement, Trek Technology is set to acquire a 20% stake or 2,750,000 ordinary shares in CCSS at a consideration of US$1.6 million ($2.1 million).
Upon completion of the proposed acquisition, the group may nominate its representatives to be appointed as director representing no more than one third of the board of directors at CCSS.
CCSS, which focuses on providing a range of high-end industrial storage solutions and enterprise-grade solutions, has “done well financially”, reads the release.
For FY2023 ended Dec 31, 2023, CCSS reported a sales revenue of US$5.6 million, operating profit of US$736,000 and net assets of US$2 million.
According to Trek 2000, the proposed acquisition will “allow the group to have a greater presence in the lucrative China market”, and will enable both groups to collaborate on research and development.
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The acquisition is expected to be funded by the group’s internal resources.
On a pro forma basis, had the acquisition been completed on Dec 31, 2023, the group’s net tangible asset (NTA) for FY2023 would have been up at US$28.6 million from US$28.4 million originally. NTA per share would stand at 9.13 US cents from 9.08 cents originally.
Had the acquisition been completed on Jan 1, 2023, Trek 2000’s earnings would have stood at US$2.8 million from US$2.7 million originally. Earnings per share would have been up at 0.91 US cents from 0.86 US cents originally.
Shares in Trek 2000 International 5AB closed 0.4 cents lower, or down 6.45%, at 5.8 cents on Oct 9.
