Galaxy Microelectronics 20CM Resumption Merger with Hengtaike: Advanced Power Semiconductor Layout

Galaxy Microelectronics (688689.SH), after being suspended for more than half a month, disclosed its restructuring plan and resumed trading. The company plans to issue shares to acquire 100% equity of Hengtaike Semiconductor held by 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 the resumption day, the company's share price hit the '20CM' limit-up, closing at 55.88 yuan per share, with total market capitalization rising to about 7.2 billion yuan. The turnover rate was only 1.21%, while the limit-up buy order reached 291 million shares, 185 times the day's trading volume, representing over 1.5 billion yuan in corresponding funds.

In a high-cycle power semiconductor industry, the market gave a positive expectation to Galaxy Microelectronics' entry into the high-end medium-high voltage power semiconductor track through M&A. However, this acquisition still faces multiple controversies: insider trading allegations due to abnormal share price rise before suspension, undetermined target valuation, and potential large goodwill pressure in the future all bring uncertainty.

Integration Challenges: Product Line and Customer Management, R&D Team Retention

Jiang Han, a senior researcher at Pangoal Think Tank, pointed out in an interview that the biggest integration challenge lies in the refined management of product lines and customers. After Hengtaike is merged, the product count will increase from about 700 to over 1,000, sharply increasing the complexity of 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 may be risks of technology loss and goodwill impairment.

M&A Strategy: Peer Gap-Filling, Technology Leap Still Faces Real Barriers

Galaxy Microelectronics' acquisition of Hengtaike is seen as a typical industrial merger to fill gaps and emphasize synergy. After the transaction, the company is expected to quickly bridge its technology gap in medium-high voltage power semiconductors, fill the blank in high-end products, and complete its product matrix.

Galaxy Microelectronics has long relied on small-signal devices and low-voltage power devices as its performance base, but its layout in high-end areas such as high-voltage MOSFETs, IGBTs, and SiC has been relatively slow. Technology breakthroughs disclosed in statements have not yet translated into actual performance, limiting its penetration into high-end markets like automotive electronics.

On the industry level, international giants have built a closed-loop technology chain covering materials, processes, and manufacturing; domestic IDM leaders have also achieved mass production of 8-inch high-voltage MOSFETs and IGBTs, and the window for latecomers to catch up continues to narrow.

In this context, Hengtaike is considered an important lever for Galaxy Microelectronics to break through technology bottlenecks. The restructuring proposal shows that Hengtaike is mainly engaged in the research, development, and sales of power semiconductor products, covering applications such as power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, electric control). The company has medium-voltage SGTMOSFET technology and high-voltage SuperJunction technology; its medium-to-high voltage SGTMOSFETs in the 150V-200V range have reached the top domestic level and can pin-to-pin benchmark and replace Infineon's mid-voltage series products.

From an industry chain perspective, this transaction is a synergy integration of 'Fabless design + IDM manufacturing': Galaxy Microelectronics has mature chip manufacturing capacity but lacks high-end design capabilities; Hengtaike has top-tier design technology but lacks its own production line, long constrained by foundry capacity and cost fluctuations. There is complementary space between the two at the business level, but whether the synergy effect can be realized depends on subsequent integration.

Valuation Fog and Funding Pressure: Final Pricing and Synergy Realization Yet to Be Verified

One of the market's core concerns is that the final valuation and consideration for this transaction have not yet been determined. As of the signing date of the proposal, the audit and valuation of Hengtaike are still in progress, and the transaction consideration has not been disclosed. The issuance price of the shares is 28.48 yuan per share, and the shares received by the counterparty are locked for 36 months.

Funds raised will be used to pay transaction taxes and fees, intermediary fees, target project construction, and to supplement listed company working capital and repay debts. Unaudited data shows that Hengtaike's revenue in 2024 and 2025 was 206 million yuan and 193 million yuan respectively; net profit attributable to parent was 32.2325 million yuan and 35.718 million yuan, maintaining steady profit growth. At the end of 2025, Hengtaike's parent company shareholders' equity was only 416 million yuan, a clear light-asset nature.

Jiang Han pointed out that the valuation core of light-asset semiconductor design companies lies in intangible assets such as IP cores and R&D teams. Traditional PE/PB models may fail in the context of volatile earnings and high upfront investment. Reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, combined with relative valuation methods for cross-validation, while incorporating technology iteration risks and downstream application cyclicality into quantitative considerations.

From 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% year-on-year, and net profit attributable to parent was 71.8742 million yuan, up only 12.21%. In 2025, revenue was 1.05 billion yuan, up 15.46% year-on-year, and net profit attributable to parent was 79.9047 million yuan, with growth slowing to 11.17%.

In terms of funds, the company's monetary capital at the end of 2025 was 137 million yuan, down 44.65% year-on-year. Operating cash flow weakened year by year; last year, net cash inflow from operations was 43.7501 million yuan, down 34.73% year-on-year, related to extended customer payment cycles and increased inventory.

An insider from a private equity institution believes that after the acquisition, Hengtaike has stable revenue and profit, and consolidation may directly boost performance. However, the two companies are relatively small, and whether they can achieve a '1+1>2' synergy effect remains uncertain. The biggest risk is that a high premium acquisition could generate large goodwill, and if subsequent performance falls short, goodwill impairment will erode the listed company's profits.

Pre-Suspension Share Price Anomaly Raises Questions: Response and Risks Need Tracking

In addition, the abnormal share price movement before the suspension raised widespread market doubts about insider information leakage. Before the suspension announcement, the share price surged on June 10-11, gaining nearly 19% over two trading days with significantly increased volume; during the same period, the semiconductor industry index rose only 2.70%, showing a significant deviation from the industry trend.

The company issued a statement saying that no insider information leakage or insider trading violations existed among relevant parties regarding this transaction. In response to market concerns, Blue Whale News called the Galaxy Microelectronics board office on June 29 but received no reply as of press time.