News Briefing

 

Dongshan Precision announced on January 31 that it planned to acquire three offshore corporations: Aranda Tooling Inc., AutoTech Production Services, Inc., and Autotech Production de Mexico S. de R. L. de C.V. company through its wholly-owned subsidiary i.e. US Dongshan, DSG, and Dongshan Hong Kong Holding Limited.

 

Impact Analysis

 

When taking only the PCB business into computation, Dongshan Precision is reckoned as the largest company in mainland China, as its revenue in 2022 will amount to 1.6 times that of Shennan Circuits, ranked second in terms of revenue scale in the mainland. Among its products, flexible boards are considered the main PCB products, and it is also the supplier of flexible boards for Apple products. As viewed from the perspective of the target companies acquired, Aranda Tooling Inc. is a metal stamping, cutting, and processing plant, while AutoTech Production is a supplier of coating, whereas both are North American auto parts manufacturers. In other words, the acquisition should focus mainly on the North American auto industry. Furthermore, Dongshan will also establish a new company in Mexico in 2022 through its subsidiary DSBJ PTE. Ltd, and invest an amount of RMB 1.3 billion to set up a new, wholly-owned subsidiary company at Qiandeng Town of Kunshan City, Jiangsu Province. Based on the information in the press release, all of the above-mentioned maneuvers are conducted to further promote the strategic layout for novel energy.

 

From the perspective of the overall application, though smartphones, network communications, and consumer applications remain to be the primary strength of PCB applications in mainland China, yet constrained by the weakening momentum from the terminal market in 2022, the automobile industry, which originally grew along with the international wave, has thus been rendered to become more conspicuous and visible, and this sign should have also been reflected in the performance of the mainland-funded PCB. In the past, Dongshan Precision has successfully penetrated the consumer electronics market through the acquisition of Mflex and Multek. After years of development, it has fruitfully established the leading position among mainland-funded PCB manufacturers. However, the company has placed automobiles at the top of the list for a strategic layout, as viewed by recent trends. Coupled with the fact that the demands for automobile electronics, embraced within the new energy of PCB, are no longer limited to conventional multilayer boards, it would, undoubtedly, be considered a niche point development for Dongshan as was originally the largest mainland-funded supplier for flexible boards. That’s why an aggressive acquisition or investment strategy can be most conducive to deepening and intensifying its link with the automobile industry.