Image source: Visual China
Blue Whale News, June 29 (Reporter Xu Gangan) Galaxy Microelectronics (688689.SH), which had been suspended for over two weeks, disclosed its restructuring plan yesterday and resumed trading today. The company plans to issue shares to acquire 100% of Hengtaike Semiconductor from three shareholders — Shanghai Zhineng Hengxin Industrial Electronics Co., Ltd., Gongqingcheng Mingnuo Investment Partnership (Limited Partnership), and Tianmuyulin (Shanghai) Technology Co., Ltd. — and simultaneously raise supporting funds.
On its first day back, the stock hit the 20% limit-up, closing at 55.88 yuan per share, raising its market cap to about 7.2 billion yuan. Turnover was only 1.21%, with buy orders of 291 million shares (over 1.5 billion yuan) at the limit, 185 times the day's volume, indicating intense market demand.
In the high-cycle power semiconductor industry, the market reacted positively to the veteran discrete device maker's move into the medium-high voltage power semiconductor segment through acquisition. However, the deal still faces multiple controversies: insider trading allegations due to abnormal price spikes before suspension, undefined target valuations, and potential large goodwill liabilities.
Pangoal Think Tank senior researcher Jiang Han told Blue Whale News that the biggest integration challenge lies in fine management of product lines and customers. With over 700 Hengtaike products being added, the total exceeds 1,000, sharply increasing complexity in customer management and capacity allocation. Secondly, core technology is highly dependent on the R&D team; without reasonable equity incentives and non-compete clauses, there is a risk of talent loss and goodwill impairment.
Acquisition to "Fill Gaps": Technology Leap Still Faces Barriers
Compared to some listed companies' cross-industry acquisitions with no synergy, Galaxy's acquisition of Hengtaike is a typical same-industry move to complement weaknesses and enhance synergy. If completed, it would quickly fill the company's medium-high voltage power semiconductor gap, filling the high-end product void and perfecting its 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 business, but has lagged in high-voltage MOSFET, IGBT, and SiC segments. Disclosed technological breakthroughs have not yet translated into actual revenue, limiting penetration into high-end markets like automotive electronics.
Global leaders such as Infineon, ON Semiconductor, and STMicroelectronics have built closed-loop technology chains in materials, processes, and manufacturing. Domestic IDM leaders like Silan Microelectronics and Yangjie Technology have also achieved mass production of 8-inch high-voltage MOS and IGBT, with head capacity continuing to expand, narrowing the window for latecomers.
Against this backdrop, Hengtaike has become a key lever for Galaxy to break through its technological bottleneck. According to the restructuring plan, Hengtaike is a national-level specialized "Little Giant" enterprise primarily engaged in R&D, development, and sales of power semiconductor products. Its products are widely used in power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, motor control). Hengtaike possesses industry-leading medium-voltage SGT MOSFET and high-voltage SuperJunction technologies. Compared with domestic rivals, its medium-high voltage SGT MOSFET in the 150V-200V range has reached the top domestic level, enabling pin-to-pin replacement of Infineon's medium-voltage series.
This transaction is a typical "Fabless design + IDM manufacturing" chain integration. Galaxy has mature chip manufacturing capacity but lacks high-end design capabilities; Hengtaike has top-tier design technology but no own fab, long constrained by foundry capacity and cost volatility. While there is complementary potential, the actual synergy depends on post-integration execution.
Asset-Light Valuation Fog: Multi-Stage DCF Model Under Focus
Zhang Jiaming, investment department general manager of Guangzhou Ruizhi Venture Capital Management Co., Ltd., told Blue Whale News that for small and medium companies, the biggest advantage of an acquisition is drastically shortening the development window. Industry leaders often take decades to build a complete chain synergy system, while SMEs can initially form a full-chain synergy profile through precise acquisitions, enhancing overall capability in a complex competitive environment.
"Despite the advantages, SMEs also face many risks, with integration risk being the biggest. Two or more companies often differ significantly in structure, culture, team integration, and R&D paths. Only through fine management, deep integration of strengths, and minimizing internal friction can true synergy be achieved." Zhang said.
However, behind the high industry cycle, market competition has become intense, and the potential risks of this acquisition cannot be ignored.
Galaxy Microelectronics warned in its plan that Hengtaike faces dual competitive pressure from global giants and domestic newcomers. In addition, if the global macro economy weakens, downstream demand growth slows, or the semiconductor industry experiences a deep, sustained downturn, it would directly impact Hengtaike's performance.
The greater uncertainty is that the final valuation and consideration for the transaction have not been determined. As of the plan signing date, auditing and valuation of Hengtaike are still in progress; the transaction price has not been disclosed. The issue price for the shares is set at 28.48 yuan per share, with a 36-month lock-up period for the counterparties. The funds raised will be used for transaction costs, intermediary fees, target project construction, and supplementing working capital or repaying debt.
Unaudited data shows Hengtaike's revenue in 2024 and 2025 was 206 million yuan and 193 million yuan respectively; net profit attributable to parent was 32.23 million yuan and 35.72 million yuan, maintaining stable growth. As of end-2025, Hengtaike's parent equity was only 416 million yuan, highlighting its asset-light nature.
Discussing valuation issues, Jiang Han told Blue Whale News that the valuation of asset-light semiconductor design companies centers on intangible assets like IP cores and R&D teams; traditional PE/PB models often fail due to profit volatility and high upfront investment. He believes a reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, cross-verified with relative valuation, while incorporating qualitative factors like technology iteration risks and downstream application cycles. To determine whether premium bubbles exist, one should not simply refer to book net assets or short-term profits, but comprehensively assess the target's technological scarcity in its niche, commercialization progress, and payment structure.
Consolidation Timeline, Goodwill Risk & Pre-Suspension Price Anomalies
Looking at the listed company's fundamentals, Galaxy Microelectronics' net profit attributable to parent declined year-on-year from 2022 to 2023. In 2024, revenue was 909 million yuan, up 30.75% YoY; net profit was 71.87 million yuan, up only 12.21% YoY, significantly weaker than revenue growth. Momentum slowed further in 2025, with revenue of 1.05 billion yuan, up 15.46% YoY; net profit of 79.90 million yuan, growth easing to 11.17%.
On the cash front, financial pressure increased. At end-2025, Galaxy Microelectronics had only 137 million yuan in cash, down 44.65% YoY. Operating cash flow weakened year by year due to longer customer payment cycles and higher inventory. In 2025, operating cash inflow was 43.75 million yuan, down 34.73% YoY.
"Whether this acquisition can capture the cyclical dividend depends not on deal closure but on consolidation timing and synergy realization," a private equity source told Blue Whale News. "Hengtaike itself has stable revenue and profit; consolidation after closing will directly boost the listed company's performance. However, both companies are relatively small, not industry leaders, and whether they can achieve 1+1>2 synergy remains uncertain. The biggest risk is a large goodwill from high-premium acquisition; if performance falls short later, goodwill impairment will directly erode profits."
The source further noted that the market's enthusiasm for semiconductor companies acquiring to transition to high-end tracks tests not short-term cycle capture, but long-term performance delivery and integration effectiveness post-acquisition.
In addition, the abnormal stock price movement before suspension has raised widespread speculation about insider information leakage.
Before the suspension announcement, Galaxy Microelectronics' stock surged sharply on June 10 and 11, gaining nearly 19% cumulatively with heavy volume, while the semiconductor index rose only 2.70%, significantly deviating from the index. The precise early anomaly sparked market discussion. The company issued a statement saying that relevant parties had no insider information leakage or insider trading violations.
On June 29, Blue Whale News reached out to Galaxy Microelectronics' board office, but received no response by press time.
