Behind the "20CM" limit-up resumption: Galaxy Microelectronics acquires Hengtaike to enter high-end power semi track

Galaxy Microelectronics (688689.SH), suspended for over half a month, disclosed a restructuring plan yesterday and resumed trading today. The company intends to acquire 100% equity of Hengtaike Semiconductor from three shareholders via share issuance, and simultaneously raise matching funds.

On the resumption day, the stock hit the 20CM limit-up, closing at 55.88 yuan/share, with total market cap rising to about 7.2 billion yuan. Turnover rate was only 1.21%, with limit-up buy orders reaching 291 million shares, 185 times the day's volume, representing over 1.5 billion yuan in funds, showing strong market buying sentiment.

Under the high cycle of the power semiconductor industry, the market is optimistic about this veteran discrete device maker's move into the mid-high voltage power semi track via M&A. However, the deal faces multiple controversies: insider trading questions from abnormal pre-suspension price surges, unsettled target valuation, and potential large goodwill pressure.

Integration challenges: product line and customer fine management

Jiang Han, a senior researcher at Pangu Think Tank, said the biggest integration challenge lies in fine management of product lines and customers. After incorporating over 700 Hengtaike products, the total exceeds 1,000, sharply increasing customer management and capacity allocation complexity. Second, core technology is highly tied to the R&D team; without reasonable equity incentives and non-compete clauses, technology loss and goodwill impairment risks exist.

Peer complement: from discrete devices to mid-high power semi high-end

Unlike some cross-border M&A by listed firms, this deal is an industry integration for peer complementarity and synergy. After closing, the company can fill its mid-high voltage power semiconductor technology gap, fill high-end product blanks, and complete its product matrix.

Galaxy Microelectronics has long relied on small-signal devices and low-voltage power devices as its core business, but lagged in high-voltage MOSFET, IGBT, and SiC high-end areas. Disclosed technological breakthroughs have not translated into actual performance, hindering penetration into high-end markets like automotive electronics.

Against accelerated industry competition, Hengtaike becomes a key lever for Galaxy's tech breakthrough. According to the restructuring plan, Hengtaike is a national-level "Little Giant" enterprise focusing on power semiconductor R&D and sales, with products used in power supplies, Li-ion battery protection, brushless motors, new energy, E-car (OBC, electric control) etc. Hengtaike has mid-voltage SGT MOSFET and high-voltage Super Junction technologies. Its 150V-200V mid-high voltage SGT MOSFET has reached top domestic levels, pin-to-pin compatible with Infineon's mid-voltage series.

This deal is a "Fabless design + IDM manufacturing" chain integration: Galaxy has mature chip manufacturing capacity but lacks high-end design; Hengtaike has top design but no own fab, long constrained by foundry capacity and cost fluctuations. Complementarity exists, but synergy realization depends on post-merger execution.

Valuation fog and funding pressure: final price and consolidation pace await verification

Key market concern: transaction valuation and consideration are not settled. As of the plan date, audit and appraisal of Hengtaike are ongoing; transaction price not disclosed. Issuance share price set at 28.48 yuan/share, lock-up period for counterparties 36 months. Matching funds will be used for transaction costs, intermediary fees, target project construction, and supplementing working capital/debt repayment.

Unaudited data shows Hengtaike's 2024 and 2025 revenue at 206 million and 193 million yuan; net profit attributable to parent at 32.23 million and 35.72 million yuan. As of end-2025, Hengtaike's parent equity was only 416 million yuan, significant light-asset nature.

Jiang Han believes valuation of light-asset semi design companies hinges on intangible assets like IP cores and R&D teams. Traditional PE/PB models often fail due to volatile earnings and high upfront investment. Reasonable valuation should be based on multi-stage DCF, cross-verified with relative valuation, while quantifying tech iteration risk and downstream cyclical factors.

From the listed company's fundamentals, Galaxy's net profit attributable to parent fell YoY from 2022 to 2023. In 2024, revenue was 909 million yuan, up 30.75% YoY; net profit 71.87 million yuan, up only 12.21%. 2025 revenue reached 1.05 billion yuan, up 15.46%; net profit 79.90 million yuan, YoY growth slowing to 11.17%, momentum weakening.

Funding-wise, monetary assets at end-2025 were only 137 million yuan, down 44.65% YoY. Operating cash flow weakened yearly; net operating cash inflow in 2025 was 43.75 million yuan, down 34.73% YoY, due to extended customer payment cycles and increased stocking.

A private equity insider noted that the key to realizing M&A dividends lies in consolidation pace and synergy. Hengtaike has stable revenue and profit; post-closing consolidation can boost listed company performance. But both entities are relatively small; whether "1+1 > 2" synergy can materialize remains uncertain. The biggest risk is high premium acquisition creating large goodwill; if performance disappoints, goodwill impairment will erode profits.

Pre-suspension stock price abnormality raises questions: compliance requires response

Additionally, the stock price surge before suspension has sparked widespread market doubts about insider information leakage. On June 10-11, two trading days before the announcement, Galaxy's stock suddenly jumped nearly 19% with huge volume; during the same period, the semi industry index only rose 2.70%. The company issued a statement that no insider information leakage or insider trading violations exist among transaction parties.

Regarding market concerns, Blue Whale News called Galaxy's board secretary office on June 29 but received no response by press time.