WiMi Hologram Cloud Inc. (Nasdaq: WIMI) (“WiMi” or the “Company”), a leading augmented reality (“AR”) service provider in China, today announced that its wholly-owned subsidiary, VIYI Technology Inc., an exempted company with limited liability incorporated in Cayman Islands (“VIYI Technology”), has entered into a framework agreement for the acquisition of 100% equity interests of Fe-da Electronics Company Pte Ltd. (“Fe-da Electronics”), a provider of Internet of Things solutions based in Singapore, to accelerate the development of the Company’s semiconductor chip business. The payments for this acquisition are expected to be made in several installments during the next two years, subject to the fulfilment of certain performance conditions by Fe-da Electronics. After the acquisition, the Company will consolidate all of Fe-da Electronics’ financial statements.
The main businesses of Fe-da Electronics are the customization of central processing units (“CPU”) for computers and servers and the production of storage devices, including SSD and RAM storage devices. After integrating Fe-da Electronics into VIYI Technology, the Company plans to both retain and strengthen Fe-da Electronics’ current team, fostering meaningful synergies in its development of central processing algorithm services. The Company also plans to utilize Fe-da Electronics’ existing artificial intelligence (“AI”) and cloud computing technologies to further unlock its potential in the development of cloud service solutions.
Through the Company’s integration of Fe-da Electronics’ semiconductor businesses, the Company will further strengthen its central processing algorithm services, launch an integrated hardware-software system for enterprise and industrial data centers, and help better facilitate the digital transformation process by providing the entire industry, especially small- and medium-sized enterprises, with integrated cloud computing products and services. Furthermore, the Company will also leverage Fe-da Electronics’ resources to further establish its presence in Mainland China, Hong Kong, Taiwan, Southeast Asia, and other areas.
According to the financial statements provided by Fe-da Electronics, which have been audited by Chan Hock Seng &Co., a public accountant in Singapore, the revenue of Fe-da Electronics amounted to approximately US$45.9 million and US$70.8 million for 2018 and 2019, respectively, which have exceeded the overall revenue of WiMi during 2018 and 2019. Through integrating Fe-da Electronics, the Company seeks to further optimize its financial model so as to improve its business growth and market size, and create more value for its investors.
Mr. Shuo Shi, Chief Executive Officer of WiMi, commented, “Our acquisition of Fe-da Electronics marks a very important milestone in our journey to achieve our long-term goal of becoming a global leader in CPU AI algorithms. In addition, our integration with Fe-da Electronics will create significant synergies in the areas of technology, product development, and market coverage, helping us to seize those market opportunities in the field of central processing algorithm services and develop more unique competitive advantages. Going forward, we plan to leverage these advantages to capture related market opportunities, move closer towards the fulfillment of our long-term goals in both AI algorithms and cloud computing services, and create more value for our shareholders over the long term.”