Datang Telecom intends to acquire a 35% stake of UniScope Technologies for CNY155 million and the acquisition plan will be submitted to the general meeting of Datang's shareholders for approval.
Datang announced this decision when it released its semi-annual report on August 30, 2008. The report shows that in the first half of 2008, Datang achieved revenue of CNY1.205 billion, a year-on-year increase of 4.06%; and its net profit was CNY6.945 million, a year-on-year increase of 71.66%.
A representative from Datang says that the performance of Datang's mobile phone business was not good, so the company probably intends to enhance its mobile phone sector through the acquisition.
According to the report of Datang, the revenue of its terminal businesses, including mobile phone terminals, increased by 54.76% to CNY315.5 million in the first half of 2008, accounting for 26% of the total revenue of the company. Although the gross profit rate of its terminal businesses increased 0.05% to 2.5%, this gross profit rate level, which is lower than most of its Chinese rivals, still ranks at the bottom in all of Datang's businesses.
Adopting mobile phone technical solutions of the Taiwan semiconductor manufacturer MTK and the U.S. Qualcomm, UniScope Technologies focuses on mobile phone businesses, including design of software and hardware for mobile terminals, mobile phone solutions and sales of mobile phones and their core parts. At present, UniScope is one of the few suppliers in China that can offer solution design services for main board and the complete handset based on both CDMA and GSM platforms.
Once the acquisition is completed, Datang will become the major shareholder of UniScope with the 35% stake.