PATEO (02889) intends to acquire up to 1.4 billion yuan for 70% of the issued shares of Chengdu Mingyi Electronic Technology.

PATEO (02889) announced that on August 7, 2026 (after trading hours), the company entered into a share transfer agreement with the transferor, the actual controller of the target company, Mao Yi, and the target company. According to this agreement, the company conditionally agrees to acquire, and the transferor conditionally agrees to sell, a total of 53.5186 million shares of the target company, accounting for approximately 70% of the issued shares of the target company, with a total consideration not exceeding RMB 1.4 billion. The transferors are Tianlang Electronics, Hainan Ruixin, Hainan Xunxin, Hainan Nuoling, Hainan Nuochuang, and Tianlang SPV. The target company, Chengdu Mingyi Electronic Technology Co., Ltd., is a joint-stock company registered in China, specializing in the development of high-performance communication chips as an integrated circuit design enterprise, operating on a Fabless model. It mainly engages in the research, design, and sales of products such as high-speed optoelectronic chips and high-performance analog chips and modules. Its optoelectronic chip products are one of the core chips in the current AI data center optical modules and are also a scarce industrial direction for localization demands. The target company is one of the few firms in the domestic market capable of mass-producing single-channel 100G TIA chips, solving a critical link in the high-speed interconnection of data center computing power, achieving independent controllability, and showing full potential to replace internationally leading communication chips. At the date of this announcement, the ultimate beneficial owner and actual controller of the target company is Mao Yi. The target group primarily engages in the research, design, and sales of optoelectronic chips, RF front-end chips, high-performance analog chips, and related business. The board believes that this transaction can provide opportunities for the group to further expand its capabilities in chips, optoelectronics, and AI servers, in line with its integrated development strategy surrounding "software, hardware, chips, and cloud." Key benefits include: (i) the target companys communication chips align with the groups strategic direction in the "chip business," enabling a deeper integration of the groups industrial layout in artificial intelligence, chips, semiconductors, automotive AI agents, optical interconnection, and related upstream and downstream industrial chains. This positions the group to seize opportunities arising from the underlying high-speed data transmission demands associated with the upgrade of smart automotive architectures, creating a synergistic effect between end devices and the cloud; (ii) optoelectronic communication chips are one of the core elements in AI infrastructure construction, holding vast market potential. The target company has deep technological accumulation, mature product layout, and high-quality customer resources in the high-speed optical communication chip field. This transaction facilitates the groups rapid entry into the core segment of the AI infrastructure industrial chain and acquisition of critical technologies and industrial resources in the optical communication chip domain, allowing both parties to share in the growth dividends of AI infrastructure development in China and globally; and (iii) the group and the target company will deeply integrate top customer resources, collaboratively consolidating and expanding the strategic position of the major customer ecosystem, synergizing their technological capabilities in areas such as intelligent cockpits, open-source software systems, AI servers, and communication chips, and promoting potential synergies between the target company and the groups existing businesses, including intelligent cockpits, intelligent connected vehicles, intelligent driving, automotive AI agents, physical AI world models, automotive token value ecosystems, and automotive optical interconnection. Upon completion of this transaction, the acquirer will become a shareholder of the target company and can participate in the business development, financial management, and compliance operations of the target company through the chairman and financial officer appointments, board reorganization, major decision-making arrangements, performance commitments, and other transaction arrangements laid out in the share transfer agreement. Considering the above factors, the board (including independent non-executive directors) believes that although the share transfer agreement is not made in the daily and general business of the group, it is entered into under ordinary commercial terms, and its terms are fair and reasonable, in the overall interests of the company and its shareholders.