NEXCHIP (02249) saw its shares climb nearly 4% during the trading session, with the stock last up 2.61% at HK$28.36, recording a turnover of HK$17.35 million.

The company recently announced it had entered into a capital increase and shareholders' agreement with Anhui Ruijing Semiconductor, the target company, its existing shareholders, and other investors. Under the terms of the deal, NEXCHIP will contribute its 100% equity stake in Hefei Ruiyu Technology, valued at RMB 240,916,988.78, as capital to subscribe for an equivalent amount of newly registered capital in the target company. Meanwhile, other investors will collectively inject RMB 170 million in cash to subscribe for RMB 170 million of the target company's newly increased registered capital.

This capital increase is expected to help NEXCHIP further concentrate on its core operations and optimize its industrial footprint. The move involves integrating the assets related to the BGBM business, which covers wafer back-grinding and metallization for power devices, into the target company. This integration is intended to support the target company's production line build-out and enhance the asset operational efficiency of NEXCHIP.

Additionally, by holding equity in the target company, NEXCHIP aims to leverage the combined resources and industrial strengths of the target company's other shareholders. This collaboration is expected to accelerate the business development of the target company, while also providing NEXCHIP with potential investment returns from its future growth.