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Shares of Jinzi Ham hit the daily trading cap today after the leading Chinese ham producer revealed plans to invest up to CNY300 million (around $42.2 million) in the semiconductor sector, aiming to stimulate growth. The stock soared 9.9%, closing at CNY7.85 ($1.10), with its year-to-date increase exceeding 70%. Its current market value stands at approximately CNY9.5 billion ($1.3 billion).
Through its fully owned subsidiary, Jinzi Semiconductor, the company announced it will purchase up to a 20% stake in Leadingspeed Technology, a chip manufacturer specializing in optical communication components. This move follows the recent establishment of Jinzi Semiconductor in July, after a change in the parent company’s controlling shareholder. Founded in 2019 and headquartered in Hangzhou, Leadingspeed develops high-speed chips used in artificial intelligence, cloud computing, and next-generation 5G/5.5G networks.
The investment will occur in two stages: an initial infusion of CNY100 million ($14 million) to increase Leadingspeed’s capital, followed by a second phase contingent on certain conditions. The company estimates Leadingspeed’s pre-investment valuation to be between CNY1 billion and CNY1.3 billion.
Although focused on advanced technology, Leadingspeed has yet to turn a profit, recording a net loss of CNY20.4 million ($2.9 million) during the first seven months of this year, with only CNY511,100 ($71,840) in revenue, according to reports.
The parent firm has indicated that sluggish growth in its core meat processing business, driven by shifting consumer preferences, has prompted it to diversify. The strategy involves maintaining stable operations in its primary sector while exploring emerging industries relevant to the digital economy.
Jinzi was founded in 1994 and underwent a major ownership shift in June, when the former controlling shareholder, Ren Guilong, transferred a 12% stake along with 6.85% voting rights to Zheng Qingsheng, a Fujian-based entrepreneur, for CNY870 million ($122.3 million). Zheng’s business interests include real estate and automotive sales.
Following this acquisition, Zheng quickly repositioned the company’s strategic focus, establishing two semiconductor companies in July, including Jinzi Semiconductor, which is now spearheading the planned investment in Leadingspeed.
In the first half of this year, Jinzi reported a net profit of CNY22.9 million, a 25% decline from the previous year, with revenue dropping 15% to CNY170 million, according to its latest financial statements.
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