Behind the 20CM Limit-Up After Resumption: Galaxy Microelectronics Plans M&A to Break into Higher-End Power Semiconductor Track, Valuation Undetermined, Integration Prospects Tested

Blue Whale News, June 29 (Reporter Xu Gangan) - Galaxy Microelectronics (688689.SH), suspended for over half a month, disclosed its restructuring plan yesterday and resumed trading today. The company proposes to acquire 100% equity of Hangtaike Semiconductor from three shareholders – Shanghai Zhineng Hengxin Industrial Electronics Co., Ltd., Gongqingcheng Mingnuo Investment Partnership (Limited Partnership), and Tianmuyulin (Shanghai) Technology Co., Ltd. – via share issuance, while also raising matching funds.

On the day of resumption, the company's shares hit the 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%, with buy orders at the limit-up price reaching 291 million shares, 185 times the day's trading volume, representing over 1.5 billion yuan in orders, indicating strong market demand.

Amid the high cycle of the power semiconductor industry, the market has given a positive outlook to the established discrete device manufacturer's move into the medium-high voltage power semiconductor track through M&A. However, the acquisition still faces multiple controversies: insider trading allegations from abnormal price rises before suspension, undetermined target valuation, and potential large goodwill pressure, adding uncertainties to the integration.

Jiang Han, a senior researcher at Pangoal Institution, told Blue Whale News that the biggest integration challenge lies in fine management of product lines and customers. After integrating over 700 products from Hangtaike, the total will exceed 1,000, sharply 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 may be technology loss and goodwill impairment risks.

M&A Aimed at "Filling Gaps", but Technology Leap Faces Real Barriers

Unlike some companies' cross-industry M&A with no synergy, Galaxy Microelectronics' acquisition of Hangtaike is a typical horizontal industry M&A with synergy. If completed, the company can quickly fill its gap in medium-high voltage power semiconductor technology, fill high-end product gaps, 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 revenue base. However, its progress in high-end areas like high-voltage MOSFETs, IGBTs, and SiC has been slow, and disclosed technology breakthroughs have not yet translated into actual sales, limiting penetration into high-end markets like automotive electronics.

Currently, international giants like Infineon, Onsemi, 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 IGBTs, and industry capacity continues to expand, narrowing the catch-up window for latecomers.

Against this backdrop, Hangtaike has become Galaxy's key lever to break through technology bottlenecks. According to the restructuring plan, Hangtaike is a national-level specialized and new "little giant" enterprise engaged in R&D, development, and sales of power semiconductor products. Its products are widely used in various power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, electric control) fields. Hangtaike has industry-leading medium-voltage SGT MOSFET technology and high-voltage SuperJunction technology. Compared with domestic competitors, Hangtaike's 150V-200V medium-high voltage SGT MOSFETs have reached top domestic levels, and can directly Pin-to-Pin replace Infineon's medium-voltage series products.

This transaction is a typical "Fabless design + IDM manufacturing" chain integration. Galaxy has mature chip manufacturing capacity but lacks high-end design capability; Hangtaike has top design technology but no own fab, long limited by foundry capacity and cost fluctuations. Both sides have complementary business aspects, but whether synergy materializes depends on actual integration execution.

Zhang Jiaming, General Manager of the Investment Department at Guangzhou Ruizhi Venture Capital Management Co., Ltd., told Blue Whale News that for small and medium companies, M&A's biggest advantage is greatly shortening the development time window. Industry leaders often take decades to build a complete chain synergy, while smaller companies can initially form a full-chain synergy framework through precise M&A, thus enhancing overall competitiveness in complex environments.

"Despite the clear advantages, small and medium firms face many risks, with integration risk being the biggest challenge. Two or more companies often differ significantly in organizational structure, corporate culture, team integration, and technology R&D paths. Only through fine management, deep integration of multiple strengths, and minimizing internal friction can true synergy be formed to drive overall strategy," Zhang said.

Valuation Fog and Funding Pressure: M&A Game Yet Priced

But behind the sector's high cycle, competition has become intense, and the potential risks of this M&A cannot be ignored.

Galaxy warned in its plan that Hangtaike will face competitive pressure from both international giants and domestic newcomers. Meanwhile, if the global macro economy weakens, downstream demand growth slows, or the semiconductor industry sees a deep, sustained downturn, Hangtaike's operating results will be directly affected.

A more core uncertainty is that the final valuation and consideration have not been determined. As of the signing date of the plan, audit and evaluation of Hangtaike are still in progress; transaction price is not yet disclosed. The issuance price for shares in this transaction is set at 28.48 yuan per share, with a lock-up period of 36 months for the target shareholders. The matching funds raised will be used to pay transaction taxes, intermediary fees, target project construction, and supplement listed company working capital and debt repayment.

Unaudited data shows Hangtaike'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, with stable profit growth. As of end-2025, Hangtaike's parent company equity was only 416 million yuan, highlighting its light-asset nature.

When discussing the valuation of the M&A target, Jiang Han told Blue Whale News that the valuation core of light-asset semiconductor design firms lies in intangible assets like IP cores and R&D teams. Traditional PE/PB models often fail due to large profit fluctuations and high upfront investment. In his view, a reasonable valuation should be based on a multi-stage DCF model, supplemented by relative valuation for cross-validation, while incorporating qualitative factors like technology iteration risk and downstream cyclicality into quantitative consideration. As for judging whether there is a premium bubble, one should not simply refer to book net assets or short-term profits, but comprehensively assess the target's technology scarcity in its niche, commercialization progress, and transaction payment structure to reach a prudent judgment.

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% YoY; net profit was 71.8742 million yuan, up only 12.21% YoY, with profit growth significantly lagging revenue. Growth momentum further slowed in 2025, with full-year revenue of 1.05 billion yuan, up 15.46% YoY; net profit of 79.9047 million yuan, with growth rate falling to 11.17% YoY, showing overall weak growth.

On the funding side, the company's financial pressure is evident. As of end-2025, Galaxy Microelectronics' cash and cash equivalents were only 137 million yuan, down 44.65% YoY. Meanwhile, operating cash flow weakened year by year due to longer customer payment cycles and increased inventory; last year, net operating cash inflow was 43.7501 million yuan, down 34.73% YoY.

"Whether this M&A can realize the cyclical dividend depends not on the transaction closing, but on consolidation timing and synergy delivery," an anonymous private fund source told Blue Whale News. "Hangtaike itself has stable revenue and profit; after consolidation, it can directly boost the listed company's earnings. But both firms are relatively small, neither is an industry leader, so whether '1+1>2' synergy can be achieved remains uncertain. The biggest risk is that high-premium acquisition creates large goodwill; if performance disappoints, goodwill impairment will directly erode the listed company's profits."

The source further noted that the market's enthusiasm for semiconductor M&A to upgrade to higher-end tracks is not about catching short-term cycles, but about long-term performance delivery and integration effectiveness post-M&A.

Pre-Suspension Price Anomaly Draws Attention: M&A Rumors and Compliance Issues

Additionally, the abnormal stock price movement before the trading suspension has raised widespread concerns about insider information leakage.

Before the suspension announcement, Galaxy Microelectronics' shares surged on June 10-11, with a cumulative gain of nearly 19% over two days and significantly higher volume. During the same period, the semiconductor sector index rose only 2.70%, showing a clear deviation from the industry index. The precise preemptive movement sparked market debate. In response, the company stated that the relevant parties in this transaction have not engaged 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.