Galaxy Microelectronics Resumes Trading with 20CM Limit-Up for Power Semi M&A: Valuation & Integration Test
Galaxy Microelectronics (688689.SH), after a half-month suspension, disclosed a restructuring plan on the first day of resumption and saw a '20CM' limit-up. The company plans to acquire 100% equity of Hengtaike Semiconductor from three shareholders—Shanghai Zhineng Hengxin Industrial Electronics Co., Ltd., Gongqingcheng Mingnuo Investment Partnership (Limited Partnership), and Tianmu Yulin (Shanghai) Technology Co., Ltd.—via share issuance, with concurrent fundraising.
On the resumption day, Galaxy Microelectronics shares hit a '20CM' limit-up, closing at 55.88 yuan per share, with total market cap rising to about 7.2 billion yuan. Turnover rate was only 1.21%, and buy orders at the limit-up reached 291 million shares, 185 times the day's trading volume, corresponding to over 1.5 billion yuan in funds.
Against the backdrop of high prosperity in the power semiconductor industry, the market is generally positive about Galaxy Microelectronics' entry into the mid-to-high voltage power semiconductor segment through M&A. However, the acquisition faces multiple controversies: insider trading allegations from abnormal share price increases before suspension, undetermined valuation of the target, and potential large goodwill pressure in the future, making the integration outlook uncertain.
Integration Challenges: Product Line & Customer Management, R&D Team Retention
Jiang Han, senior researcher at Pangu Think Tank, pointed out that the biggest integration challenge is fine management of product lines and customers. After Hengtaike's integration, the number of products will increase from over 700 to over 1,000, greatly increasing complexity in customer management and capacity allocation.
Second, core technology is highly tied to the R&D team. Without reasonable equity incentives and non-compete clauses, there is a risk of technology loss and goodwill impairment.
Filling the Gap via M&A: From Discrete Devices to Mid-High Voltage Power Semiconductors
Galaxy Microelectronics' acquisition of Hengtaike is an industrial M&A that fills gaps and emphasizes synergy. After the deal, the company could fill its technological gap in mid-to-high voltage power semiconductors, bridging high-end product voids and perfecting its overall product matrix.
As a semiconductor discrete device company listed on the STAR Market in 2021, Galaxy Microelectronics has long relied on small-signal devices and low-voltage power devices as its core performance base, but has been relatively slow in high-end areas like high-voltage MOSFETs, IGBTs, and SiC. Disclosed technological breakthroughs have yet to translate into actual performance, limiting the company's penetration into high-end markets such as automotive electronics.
Industry-wide, international giants have built a closed-loop technology chain covering materials, processes, and manufacturing, while domestic IDM leaders are pushing mass production of high-voltage MOSFETs and IGBTs, narrowing the window for latecomers. Hengtaike is seen as a key lever for Galaxy Microelectronics to break through technological bottlenecks.
According to the restructuring plan, Hengtaike is a national-level 'Little Giant' specializing in R&D, development, and sales of power semiconductor products. Its products are used in various power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, electronic control). It possesses medium-voltage SGT MOSFET and high-voltage SuperJunction technologies. Its mid-to-high voltage SGT MOSFETs in the 150V-200V range have reached domestic top-level standards and can directly pin-to-pin replace Infineon's medium-voltage series.
The transaction is described as a 'Fabless design + IDM manufacturing' industry chain integration: Galaxy Microelectronics has mature chip manufacturing capacity but lacks high-end design capabilities; Hengtaike has leading design technology but has long been constrained by foundry capacity and cost volatility. There is complementary potential, but synergy realization depends on subsequent integration.
Valuation Fog and Capital Pressure: Undetermined Transaction Price, Goodwill & Valuation Model as Core Variables
Galaxy Microelectronics warned in the plan that Hengtaike will face dual competitive pressure from international giants and domestic emerging companies. If the global macroeconomy weakens, downstream demand growth slows, or the semiconductor industry experiences a deep and sustained downturn, Hengtaike's performance could be affected.
A more fundamental uncertainty is that the final valuation and consideration have not been determined. As of the signing date of the plan, the audit and evaluation of Hengtaike are still in progress, and the transaction price has not been disclosed. The share issuance price is 28.48 yuan per share, with a lock-up period of 36 months for the counterparty. Proceeds from matching fundraising will be used for transaction taxes, intermediary fees, project construction, supplementing working capital, and repaying debts.
Unaudited data shows Hengtaike's 2024 and 2025 revenue were 206 million yuan and 193 million yuan, respectively; net profit attributable to parent was 32.23 million yuan and 35.72 million yuan. At end-2025, Hengtaike's parent company equity was only 416 million yuan, showing significant asset-light characteristics.
Jiang Han believes that the valuation of asset-light semiconductor design companies depends on intangible assets like IP cores and R&D teams, making traditional PE/PB models potentially invalid. A reasonable valuation should be based on a multi-stage DCF model, cross-validated with relative valuation methods, while incorporating qualitative factors such as technology iteration risk and downstream application cyclicality into quantitative considerations. Whether there is a premium bubble cannot be judged simply by book net assets or short-term profits, but should be prudently assessed based on technological scarcity in sub-sectors, commercialization progress, and transaction payment structure.
From Galaxy Microelectronics' fundamentals, net profit attributable to parent declined year-on-year from 2022 to 2023. In 2024, revenue was 909 million yuan, up 30.75% year-on-year; net profit attributable to parent was 71.87 million yuan, up only 12.21%. In 2025, full-year revenue was 1.050 billion yuan, up 15.46%; net profit attributable to parent was 79.90 million yuan, with growth slowing to 11.17%, indicating overall weak growth.
On the capital side, Galaxy Microelectronics' financial pressure is becoming evident. At end-2025, cash was only 137 million yuan, down 44.65% year-on-year; operating cash flow weakened annually, with net cash inflow from operations of 43.75 million yuan last year, a 34.73% decrease, mainly due to longer customer payment cycles and increased inventory.
Private equity insiders pointed out that whether the M&A can realize cyclical dividends depends on the consolidation schedule and synergy realization. After Hengtaike's consolidation, it could boost the listed company's performance, but both companies are relatively small, making the '1+1>2' synergy uncertain. The biggest risk is high goodwill from premium acquisition; if subsequent performance falls short, goodwill impairment will erode profits. The market's enthusiasm for M&A transformation ultimately hinges on long-term performance delivery and integration after the deal.
Market Controversy Focus: Pre-Suspension Share Price Anomaly and Insider Information Rumors
Additionally, the market continues to question insider information leaks due to abnormal share price movements before suspension. Before the suspension announcement, on June 10-11, Galaxy Microelectronics shares suddenly surged, accumulating a nearly 19% gain in two days with significantly increased volume; during the same period, the semiconductor industry index only rose 2.70%, showing a deviation from the industry trend.
The company stated that the relevant parties involved in the transaction did not engage in insider information leaks or insider trading. Regarding market concerns, Blue Whale News called Galaxy Microelectronics' board office on June 29 but received no reply by press time.
