Inari Amerton Enters Into JV In China To Tap The Lucrative Chinese Market

Inari Amerton Bhd announced that Amertron International Limited, an indirect wholly-owned subsidiary of the Company, has on 28 June 2022 entered into a Joint Venture Contract (“JV Contract”) with CFTC (Yiwu) Equity Investment Fund Partnership (Limited Partnership) (“Party B”) and CFTC Equity Investment Management (Beijing) Co., Ltd (“Party C”) to bring together the strengths and expertise of all Parties in carrying out OSAT manufacturing and related businesses in China for the China market under a joint-venture company, Yiwu Semiconductor International Corporation (“JV Company”).

In a Bursa Filing, it said that The JV Company is a limited liability company incorporated on 4 January 2021 under the laws of the PRC. Its current registered capital is RMB770,001,000, of which Party B holds RMB770,000,000 (representing 99.9999% of the total equity capital in the JV Company) and Party C holds RMB1,000 respectively. The current paid-up capital of the JV Company is RMB570,001,000.

The current business scope of the JV Company includes the manufacture, design and sales of IC chips and electronic components. As of to-date, the JV Company has not commenced business yet.

The JV Company will be engaging in OSAT manufacturing business and other related business for the PRC market.

By adopting engineering management methods, innovative management systems, advanced technologies and integrating high quality resources, the JV Company shall provide best-in-class products and services to its customers and to the market at large and, through effective operation of the JV Company, it aims to provide good investment returns to the Parties.

It said that the Joint Venture will enable Inari Group to improve its existing captive business strategy and allows Inari to expand and add to its already existing ATK operations in the burgeoning China market.

This would enable Inari Group to diversify its product and customer base as well as additional revenue and earning streams with a potential IPO in China at a later stage.

The Joint Venture represents an opportunity to partner with a strong local technology fund which will help in opening up the China OSAT market to Inari within a short runway.

Additionally, the Joint Venture gives a good valuation to our existing ATK investment in China (3.3 times over the ATK net tangible assets (“NTA”) as at 30 June 2021) with Inari maintaining a 54.4648% controlling stake in the JV Company.

The revenue and earnings of ATK and the JV Company will continue to be consolidated in Inari Group account and is expected to contribute positively to Inari Group’s financial performance.

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