But based on the confidentiality clause, it did not disclose the specific buyer and the transaction price, only indicating that the transaction party is not an affiliated enterprise. It is estimated that the completion of the transaction on March 15, 2021 will not have any impact on the consolidated financial statements for the fiscal year 2020 up to the end of March. At present, sharp holds 1030800 common shares of SDP, with a shareholding ratio of about 24.55%.
The deal means sharp will withdraw from the production of large LCD panels in the future.
Sharp said that its goal is to become a strong brand company. In terms of equipment business, it will actively cooperate with the outside to carry out structural reform, ensure core technology and maintain stable procurement. At the same time, it will also maintain a partnership with SDP in the field of intellectual property. In the future, SDP will continue to supply LCD panels for sharp, which will not be affected by this transaction. Sharp believes that the large-size LCD panel business needs to continuously invest a lot of capital to maintain competitiveness, but the business is also volatile, and this transaction helps to stabilize Sharp’s performance.
In recent years, the operation of SDP is not good, and it has fallen into a loss again. As of March last year, the consolidated revenue of 2019 fiscal year was 99.92 billion yen (about 6.074 billion yuan), with an annual increase of 10.34%. The operating loss was 7.175 billion yen (about 436 million yuan), with a decrease of 59.6% compared with the previous year. The after tax loss was 19.642 billion yen (about 1.194 billion yuan), with a decrease of 31.01% compared with the previous year. At present, the global market is facing a severe market environment. Strong competition from Chinese mainland manufacturers has made SHARP worry about the future market prospect. Timely stop loss adjustment strategy is a feasible solution.