Jun 2, 2023

Tang Shihua audio is not supported! China’s Lettall Hits 2 1/2-Year High on Plan to Take Majority Stake in AI Computing Power Firm (Yicai Global) June 2 -- Lettall Electronic’s shares surged to the highest in two and a half years after the Chinese supplier of precision structural parts and electronic components for liquid crystal displays said it will acquire most of a new firm that will lease computing power to artificial intelligence projects. Lettall [SHA: 603629] gained by the 10 percent exchange-imposed daily trading limit to close at CNY27.03 (USD3.82) a share in Shanghai today, the highest since December 2020. Lettall will pay CNY450 million (USD63.6 million) for 90 percent of Shanghai Century Litong Data Service, a project company set up yesterday with a registered capital of CNY50 million, from owner Shanghai Century Longteng Data Science, the Yixing-based buyer said yesterday. Shanghai Century Litong Data Service will provide computing power services to internet giant Tencent Holdings’ AI supercomputing center in the Yangtze River Delta region and Century Longteng’s own fifth-generation network big data center in Shenzhen, which also won a cloud computing services contract from tech giant Huawei Technologies last year, Lettall noted. Century Longteng or a third party recognized by both companies will provide internet data center hosting and software development and operations services for Shanghai Century Litong Data Service, Lettall said. Century Longteng is 63 percent owned by Shenzhen-listed Century Huatong Group, which has been expanding its business in recent years from auto parts to online game development and cloud data center operations, with the online game business accounting for about 78 percent of its total revenue in 2022, according to Zhejiang Century Huatong Group’s  annual report. The investment will create a new driving force for Lettall’s business transformation and innovation, and is expected to positively impact its business diversification process, the company added. But the project will not affect Lettall’s earnings performance this year, given its expected over six-month construction period. Editor: Futura Costaglione