Behind the '20CM' Limit-Up Resumption: Galaxy Microelectronics Plans to Acquire Hengtai Ke to Enter Mid-High Voltage Power Semiconductor High-End Track

Galaxy Microelectronics (688689.SH), after a suspension of more than two weeks, disclosed its restructuring plan and saw a '20CM' limit-up on the resumption day. The company plans to acquire 100% equity of Hengtai Ke Semiconductor from three shareholders—Shanghai Zhineng Hengxin Industrial Electronics Co., Ltd., Gongqingcheng Mingnuo Investment Partnership (Limited Partnership), and Tianmu Yulin (Shanghai) Technology Co., Ltd.—by issuing shares, while simultaneously raising supporting funds.

On the resumption day, the company's shares hit the '20CM' limit-up, closing at RMB 55.88 per share, with total market capitalization rising to about RMB 7.2 billion, and a turnover rate of only 1.21%. The limit-up block orders reached 291 million shares, 185 times the day's trading volume, with corresponding funds exceeding RMB 1.5 billion, reflecting strong speculative sentiment.

Under the high prosperity cycle of the power semiconductor industry, the market has given a positive expectation to the company's layout in the mid-high voltage power semiconductor track through acquisition. However, the acquisition still faces multiple controversies: insider trading allegations due to abnormal share price rise before the suspension, undetermined target valuation, and potential large goodwill impairment in the future, making industrial integration uncertain.

Product Line and Customer Management Complexity Rises: Refined Integration Is the Primary Challenge

Jiang Han, a senior researcher at Pangu Think Tank, said the biggest integration challenge of this transaction lies in the refined management of product lines and customers. After Hengtai Ke is consolidated, the product count will increase from over 700 to over 1,000, and the complexity of customer management and capacity allocation will surge.

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.

Peer Complementary and Synergistic Integration: Technical Leap Still Faces Real Barriers

This acquisition is a peer complementary and synergistic industrial integration. After the transaction is implemented, the company is expected to fill the technical gap in mid-high voltage power semiconductors, fill the blank in high-end products, and improve the 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 earnings base, but has been relatively slow in high-voltage MOSFETs, IGBTs, and silicon carbide (SiC) high-end fields. Disclosed technical breakthroughs have not yet effectively translated into actual performance, restricting its penetration into high-end markets such as automotive electronics.

In industry competition, international giants have formed a full-chain technology closed loop in materials, processes, and manufacturing, while domestic IDM leaders have also achieved mass production of high-voltage MOS and IGBT. Head capacity continues to be released, and the window for catching up in the industry continues to narrow.

Hengtai Ke has become a key lever for Galaxy Microelectronics to break through technical bottlenecks. According to the restructuring plan, Hengtai Ke is a national-level specialized and new 'Little Giant' enterprise, mainly engaged in research, development, and sales of power semiconductor products, applied in power supplies, lithium battery protection, brushless motors, new energy, E-car (OBC, electric control), and other fields.

Hengtai Ke has mid-voltage SGT MOSFET technology and high-voltage Super Junction technology. Its mid-high voltage SGT MOSFETs in the 150V-200V range have reached the domestic top level, enabling pin-to-pin alignment and replacement of Infineon's mid-voltage series products.

This transaction is a 'Fabless design + IDM manufacturing' industry chain integration: Galaxy Microelectronics has mature chip manufacturing capacity but lacks high-end design capability; Hengtai Ke has top design technology but no own production line, long limited by foundry capacity and cost fluctuations. There is complementarity at the business level, but synergy realization depends on subsequent integration.

Valuation Fog and Capital Pressure: Final Price and Goodwill Risk Still Core Variables

Multiple commentators pointed out that for small companies, acquisitions can significantly shorten the development time window; but integration risk is the biggest challenge, including differences in organizational structure, corporate culture, team integration, and R&D paths. Only through refined management and reducing internal friction can synergies be formed to drive strategy implementation.

In risk warnings, the plan points out that Hengtai Ke will face two-way competitive pressure from both international giants and domestic emerging players. If the global macro economy weakens, downstream end-demand growth slows, or the semiconductor industry experiences a deep and sustained downturn, its operating performance could be directly affected.

The more core uncertainty is that the final valuation and consideration have not yet been finalized. As of the signing date of the plan, Hengtai Ke's audit and evaluation are still in progress, and the transaction price has not been disclosed. The issuance price of shares is set at RMB 28.48 per share, with a lock-up period of 36 months for the shares obtained by the counterparties. The supporting funds will be used to pay transaction taxes and intermediary fees, invest in the target project, supplement working capital, and repay debts.

Unaudited data shows that Hengtai Ke's revenue for 2024 and 2025 was RMB 206 million and RMB 193 million respectively; net profit attributable to parent was RMB 32.2325 million and RMB 35.718 million respectively. As of the end of 2025, the parent company's shareholders' equity was only RMB 416 million, indicating a significant light asset nature.

Jiang Han, when discussing valuation, pointed out that the core of valuation for light-asset semiconductor design companies lies in intangible assets such as IP cores and R&D teams. Traditional PE/PB models are often ineffective due to earnings volatility and high upfront investment. A reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, supplemented by cross-validation with relative valuation methods, while incorporating qualitative factors such as technology iteration risk and downstream application cyclicality into quantitative consideration.

From the listed company's fundamentals, Galaxy Microelectronics' net profit attributable to parent declined year-on-year in both 2022 and 2023. Revenue in 2024 was RMB 909 million, up 30.75% YoY; net profit attributable to parent was RMB 71.8742 million, up only 12.21% YoY. Revenue in 2025 was RMB 1.05 billion, up 15.46% YoY; net profit attributable to parent was RMB 79.9047 million, with growth slowing to 11.17%.

In terms of funds, the company's cash and cash equivalents at the end of 2025 were only RMB 137 million, down 44.65% YoY. In terms of operating cash flow, due to extended customer payment terms and increased inventory, net operating cash inflow last year was RMB 43.7501 million, down 34.73% YoY.

Some view that whether this acquisition can realize prosperity dividends depends on the pace of consolidation and synergy realization. Hengtai Ke has stable revenue and profit; after consolidation, it may boost the listed company's earnings, but the overall size of both companies is relatively small, and whether they can achieve a '1+1>2' synergy effect remains uncertain. The biggest risk is that a high premium acquisition may generate large goodwill, and if subsequent performance falls short, goodwill impairment could erode the listed company's profits.

Abnormal Share Price Movement Before Suspension Raises Attention: Compliance Allegations and Information Disclosure Response

In addition, the abnormal share price movement before the suspension of this transaction has raised market questions about insider information leakage. Before the suspension announcement, Galaxy Microelectronics shares suddenly surged on June 10 and 11, rising nearly 19% cumulatively in two days with significant volume expansion; during the same period, the semiconductor industry index rose only 2.70%, showing a significant deviation from the industry index.

The company stated that the relevant entities in this transaction do not have insider information leakage or insider trading violations.

In response to market concerns, Blue Whale News called Galaxy Microelectronics' secretary office on June 29 but received no reply by the time of publication.