(Yicai) March 25 -- Shares of PhiChem rose briefly after the Chinese supplier of semiconductor and touchscreen materials announced plans to acquire all the liquid crystal display material assets of Japan’s JNC Corporation in China, aiming to improve its competitiveness.

PhiChem [SHE: 300398] gained as much as 4.8 percent shortly after opening this morning but closed 1.5 percent lower at CNY16.99 (USD2.30) due to weak market sentiment as Shenzhen's ChiNext index ended the day 0.3 percent down.

Hecheng Display Technology, a PhiChem unit that specializes in LCD materials, signed a memorandum of understanding with JNC to acquire all the Japanese chemical company’s tangible and patented LCD assets in China, including its production and research and development subsidiaries in Suzhou, to strengthen resource integration, the Shanghai-based company announced yesterday.

After the transaction, the Japanese firm will remain involved in the business. JNC plans to acquire up to a 5.1 percent equity interest in Hecheng in cash, becoming its minority shareholder.

The prices for PhiChem’s asset acquisition and JNC’s equity investment are yet to be determined due to ongoing due diligence on the underlying assets. 

The LCD materials business is a major source of income for PhiChem. Hecheng recorded CNY1 billion (USD141 million) in revenue in 2023, accounting for around 37 percent of the parent company’s total that year, according to the latest annual report. Hecheng counts many major Chinese LCD makers as its long-term clients, per the firm.

Editor: Emmi Laine