(Yicai) Nov. 12 -- ACM Research Shanghai said Shanghai’s stock exchange has approved its proposed CNY4.5 billion (USD620 million) private placement, which will be the largest non-public sale of shares in China’s semiconductor industry so far this year, according to Wind data.

About CNY2.26 billion of the funds raised will go toward developing advanced semiconductor equipment, the Shanghai-based company, which specializes in advanced equipment solutions for the chip industry, said yesterday.

CNY1.3 billion will supplement working capital, while about CNY940 million (USD130 million) will be spent on building a research and process testing platform.

The private placement of shares marks ACM Research Shanghai’s first major fundraising effort since the unit of California-based ACM Research went public on Shanghai’s tech-heavy Star Market in November 2021.

Shares of ACM Research Shanghai [SHA: 688082] closed down 4.1 percent at CNY118.02 (USD16.31) apiece today. The stock has gained 13 percent since the end of last year. The benchmark Shanghai Composite Index fell 1.4 percent.

A private placement, or non-public sales of securities to specific investors, can depress a company’s stock price in the short term, as the new shares are usually sold at a discount to the market price.

Net profit at ACM Research Shanghai rose 13 percent to CNY758 million (USD105 million) in the nine months ended Sept. 30 from a year earlier, its latest earnings report showed recently. Operating revenue jumped 45 percent to CNY3.98 billion (USD550 million), with the firm predicting a full-year figure in the range of CNY5.6 billion to CNY5.88 billion.

The company had CNY6.77 billion of orders on hand at the end of the third quarter, up 3.7 percent on the same period of last year.

Although the localization rate for chip gear in China has improved significantly in recent years, it is expected to reach only about 20 percent this year, indicating considerable room for domestic substitution, according to a report by Chengtong Securities.

Editor: Tom Litting