KUALA LUMPUR (April 10): Aemulus Holdings Bhd is going to form a joint venture company in China with a local partner there through which it will monetise the intellectual property rights of its radio frequency tester and make its maiden step into the China market.

In a filing with Bursa Malaysia, Aemulus said its wholly-owned unit Aemulus Corporation Sdn Bhd (ACSB) has entered into a joint venture agreement (JVA) with Tangren Microtelligence Co Ltd today. The JVco, which will be 60% owned by Tangren Microtelligence and 40% by ACSB, will be involved in research and development as well as the sale of semiconductor test euqipment and their related products and services.

“Tangren Microtelligence and ACSB plan to invest an amount of RMB10 million and RMB6.67 million respectively within three years from the incorporation of the JVco,” Aemulus said, adding it will fund its stake via internal funds.

ACSB shall also transfer the use and intellectual property (IP) rights of its radio frequency tester for RMB5.67 million, or about RM3.4 million. The consideration will be paid in three phases, with the final phase to be completed within three years from the date of the JVA.

The IP did not carry any book value in the company's latest audited financial statements, Aemulus said, because it was internally developed and its associated costs had been recorded as an expense previously.

"As such, the estimated gain from the Proposed Transfer of the said IP is approximately RM3.4 million or RMB5.667 million, which will be recognised proportionately in the corresponding financial year upon the transfer of technology," Aemulus said.

Aemulus plans to use proceeds from the IP transfer for working capital and to pay suppliers.

The JV shall be in force for 20 years, said Aemulus. ACSB and Tangren Microtelligence previously inked a Memorandum of Understanding on March 25 for the porposed partnership.

Aemulus share price closed one sen or 6.06% lower at 15.5 sen today, bringing it a market capitalisation of RM85.17 million. The counter saw some 903,500 shares done. Year to date, the counter has fallen some 33%, from 23 sen on Dec 31, 2019.