Blue Whale News, June 29 Galaxy Microelectronics (688689.SH), suspended for over half a month, disclosed a reorganization plan yesterday and resumed trading today. The company plans to acquire 100% 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.—by issuing shares, while simultaneously raising supporting funds.
On the resumption day, the stock hit the "20CM" daily limit, 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%, and the buy orders at the limit reached 291 million shares, 185 times the day's trading volume, corresponding to over 1.5 billion yuan in funds, indicating strong market demand.
In the high-cycle power semiconductor industry, the market has positive expectations for this veteran discrete device manufacturer's foray into the high-end mid- to high-voltage power semiconductor segment through M&A. However, the acquisition still faces multiple controversies: allegations of insider trading due to abnormal stock price surges before suspension, unresolved target valuation, and potential large goodwill pressure in the future, all of which bring uncertainty to industrial integration.
Increased Complexity in Product Lines and Customer Management: What Are the Integration Challenges?
Jiang Han, senior researcher at Pangoal Think Tank, stated that the biggest integration challenge of this transaction lies in the fine management of product lines and customers. After merging Hengtaike's more than 700 products, the total exceeds 1,000, significantly 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.
Filling Peer Weaknesses and Emphasizing Synergistic M&A: Aiming to Cross Mid- to High-Voltage Technical Barriers
Compared to some listed companies' cross-border M&A cases lacking synergy with their main business, Galaxy Microelectronics' acquisition of Hengtaike is a typical industrial merger that fills peer weaknesses and emphasizes synergy. After the transaction closes, the company is expected to fill the gap in mid- to high-voltage power semiconductor technology, 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 performance base, but has been slow to deploy in high-end areas such as high-voltage MOSFETs, IGBTs, and SiC. The technological breakthroughs disclosed on paper have not yet translated into actual performance, limiting the company's penetration into high-end markets like automotive electronics.
At the industry level, international giants like Infineon, ON Semiconductor, and STMicroelectronics have built full-chain technical loops covering 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. The continued release of top-tier capacity is narrowing the catch-up window for latecomers.
In this context, Hengtaike has become a key lever for Galaxy Microelectronics to break through technical bottlenecks. According to the reorganization plan, Hengtaike is a national-level "Specialized and New" Little Giant enterprise mainly engaged in the research, development, and sales of power semiconductor products, widely used in various power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, electronic control) fields. Hengtaike possesses industry-leading medium-voltage SGTMOSFET technology and high-voltage SuperJunction technology.
Compared with other domestic competitors, Hengtaike's mid- to high-voltage SGTMOSFET in the 150V-200V range has reached the top domestic level and can directly Pin-to-Pin benchmark and replace Infineon's medium-voltage series.
This transaction is an industrial chain integration of "Fabless design + IDM manufacturing". Galaxy Microelectronics has mature chip manufacturing capacity but lacks high-end design capabilities; Hengtaike masters top design technology but has no own production lines, long constrained by foundry capacity and cost fluctuations. The two sides have complementary business spaces, but whether synergy can be realized depends on subsequent integration.
Zhang Jiaming, general manager of the investment department of Guangzhou Ruizhi Venture Capital Management Co., Ltd., believes that for small and medium-sized companies, the advantage of M&A lies in shortening the development time window. Through precise M&A, they can initially form a full industry chain synergy prototype and enhance comprehensive strength in a complex competitive environment.
But he also pointed out that small and medium-sized companies still face integration risks, and differences in organizational structure, corporate culture, team integration, and technology R&D paths may cause friction. Only through fine management to deeply integrate advantages can the overall strategy be implemented.
Valuation Fog and Capital Pressure: Undetermined Valuation, Goodwill, and Consolidation Pace Are Key Tests
Behind the industry's high prosperity, market competition is becoming fierce, and the potential risks of this M&A cannot be ignored. In the plan's risk warnings, Galaxy Microelectronics stated that Hengtaike will face competitive pressure from both international giants and domestic upstarts; if the global macroeconomy weakens, downstream terminal demand growth slows, or the semiconductor industry experiences a deep and sustained downturn, it will affect Hengtaike's operating performance.
The more fundamental uncertainty is that the final valuation and consideration for the transaction have not been finalized. As of the signing date of the plan, the audit and evaluation of Hengtaike were still ongoing, and the transaction price has not been disclosed. The share issuance price for this transaction is set at 28.48 yuan per share, with a lock-up period of 36 months for the shares received by the counterparties. The raised supporting funds will be used to pay transaction taxes, intermediary fees, target project construction, supplement the listed company's working capital, and repay debts.
Unaudited data shows that Hengtaike's operating 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 35.7180 million yuan, respectively, maintaining stable profit growth. By the end of 2025, Hengtaike's parent company shareholders' equity was only 416 million yuan, highlighting its asset-light nature.
When discussing the valuation of the M&A target, Jiang Han pointed out that the core of valuing asset-light semiconductor design companies lies in intangible assets such as IP cores and R&D teams. Traditional PE/PB models are often ineffective due to large profit fluctuations and high upfront costs. Reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, supplemented by cross-validation with relative valuation methods, and incorporate qualitative factors such as technology iteration risk and downstream application cyclicality into quantitative considerations.
From the listed company's fundamentals, Galaxy Microelectronics' net profit attributable to parent declined year-on-year in both 2022 and 2023. In 2024, it achieved operating revenue of 909 million yuan, a year-on-year increase of 30.75%; net profit attributable to parent was 71.8742 million yuan, a year-on-year increase of only 12.21%, with profit growth lagging behind revenue growth. In 2025, growth momentum further slowed, with full-year revenue of 1.050 billion yuan, a year-on-year increase of 15.46%; net profit attributable to parent was 79.9047 million yuan, with year-on-year growth falling to 11.17%, indicating weak growth.
At the capital level, financial pressure is further evident. By the end of 2025, Galaxy Microelectronics' monetary funds were only 137 million yuan, a year-on-year decrease of 44.65%; operating cash flow weakened year by year. Due to extended customer payment cycles and increased inventory preparation, the company's net operating cash inflow last year was 43.7501 million yuan, a year-on-year decrease of 34.73%.
A person from a private equity institution said that whether the M&A can realize cyclical dividends depends on the consolidation pace and synergy realization. Hengtaike has stable revenue and profit, and after closing and consolidation, it can boost the listed company's performance. However, the overall size of the two companies is relatively small, and there is still uncertainty about achieving the "1+1>2" synergy effect. The biggest risk is the formation of large goodwill from high-premium acquisitions; if subsequent performance falls short, goodwill impairment will directly erode the listed company's profits.
He further pointed out that market hype is not just about capturing short-term prosperity, but more about the ability to deliver long-term performance after M&A and the effectiveness of integration.
Abnormal Stock Price Movement Before Suspension Raises Compliance Questions: Company Denies Wrongdoing
In addition, the abnormal stock price movement before the trading suspension has also raised market suspicions of insider information leakage. Before the suspension announcement, Galaxy Microelectronics' stock price surged sharply on June 10 and 11, cumulatively rising nearly 19% over two trading days with significantly increased volume; during the same period, the semiconductor industry index rose only 2.70%, showing a notable deviation. The pre-movement sparked heated discussion.
In response, the company issued a statement that there was no insider information leakage or insider trading related to this transaction. Regarding market concerns, Blue Whale News called Galaxy Microelectronics' board secretary office on June 29 but received no reply by press time.
