Galaxy Micro Resumes Trading with 20CM Limit-Up: Planned M&A to Break into High-End Medium-High Voltage Power Semiconductor Track

After being suspended for over half a month, Galaxy Microelectronics (688689.SH) resumed trading after disclosing its restructuring plan. The company plans to acquire 100% equity 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.—through share issuance, while simultaneously raising matching funds.

On the first day of resumption, the stock hit a “20CM” daily limit-up, closing at CNY 55.88 per share, with a total market capitalization of approximately CNY 7.2 billion. The turnover rate was only 1.21%, and the limit-up order book reached 291 million shares, 185 times the day's trading volume, corresponding to over CNY 1.5 billion in funds.

During the high-cycle period of the power semiconductor industry, the market gave a positive outlook to Galaxy Micro's plan to enter the medium-high voltage power semiconductor track through M&A. However, the deal still faces multiple controversies: suspected insider trading due to abnormal stock price spikes before the suspension, the undetermined valuation of the target, and potential large goodwill pressure in the future.

M&A Integration Challenges: Product Line and Customer Management Refinement, Technical Team Retention

Researchers pointed out that the biggest integration challenge of this transaction lies in the refined management of product lines and customers. With over 700 products from Hengtaike being integrated, the total exceeds 1,000 models, drastically increasing the complexity of customer management and capacity allocation.

Secondly, 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.

Industrial Synergy to Fill Gaps: Technological Leap from Low Voltage to Medium-High Voltage

This M&A is seen as an industrial acquisition that complements peers' weaknesses and emphasizes synergy. After the deal closes, the company is expected to fill its medium-high voltage power semiconductor technology gap, bridge the high-end product void, and complete its overall product matrix.

Galaxy Micro, a discrete semiconductor device company listed on the STAR Market in 2021, has long relied on small-signal devices and low-voltage power devices as its core performance base, but its layout in high-end areas such as high-voltage MOSFETs, IGBTs, and silicon carbide (SiC) has been relatively slow, limiting its penetration into high-end markets like automotive electronics.

According to the restructuring plan, Hengtaike is a national-level specialized and new “little giant” enterprise primarily engaged in the research, development, and sales of power semiconductor products, applied in various power supplies, lithium battery protection, brushless motors, new energy, E-car (OBC, electronic control), and other fields. It possesses medium-voltage SGT MOSFET technology and high-voltage SuperJunction technology.

The transaction is described as an integration path of “Fabless design + IDM manufacturing”: Galaxy Micro has mature chip manufacturing capacity but lacks high-end design capabilities; Hengtaike has top design technology but lacks its own production line, long constrained by foundry capacity and cost fluctuations. The two sides have complementary business potential, but whether synergies materialize depends on subsequent integration execution.

Valuation Fog and Capital Pressure: Pricing Undetermined, DCF and Other Methods Key

The plan's risk warnings indicate that Hengtaike will face dual competitive pressure from international giants and domestic emerging companies; if the global macroeconomy weakens, downstream terminal demand growth slows, or the semiconductor industry experiences a deep, sustained downturn, it may directly impact Hengtaike's operating performance.

A more core uncertainty is that the final transaction valuation and consideration have yet to be finalized. As of the plan's signing date, the audit and valuation of Hengtaike are still ongoing, and the transaction price is not yet disclosed. The share issuance price is set at CNY 28.48 per share, with a 36-month lock-up period for shares received by the transaction counterparty; the matching funds raised will be used to pay transaction taxes, intermediary fees, project construction costs, supplement the listed company's working capital, and repay debts.

Unaudited data shows that Hengtaike's revenue for 2024 and 2025 was CNY 206 million and CNY 193 million, respectively; net profit attributable to parent was CNY 32.2325 million and CNY 35.718 million. As of end-2025, Hengtaike's parent company equity was only CNY 416 million, highlighting a significant asset-light nature.

Research opinions suggest that the valuation of asset-light semiconductor design companies primarily hinges on intangible assets such as IP cores and R&D teams. Traditional PE/PB models often fail due to large profit fluctuations and high upfront investment. A multi-stage discounted cash flow (DCF) method, cross-validated with relative valuation approaches, and incorporating factors like technology iteration risk and downstream application cyclicality, is more suitable.

Performance and Risk Concerns: Consolidation Timeline, Goodwill Impairment, Pre-Suspension Abnormal Moves

From the listed company's fundamentals, Galaxy Micro's net profit attributable to parent fell year-on-year from 2022 to 2023. In 2024, it achieved revenue of CNY 909 million, up 30.75% year-on-year; net profit of CNY 71.8742 million, up only 12.21%. In 2025, revenue was CNY 1.050 billion, up 15.46%; net profit was CNY 79.9047 million, with growth slowing to 11.17%, indicating overall weakening growth momentum.

On the capital front, as of end-2025, Galaxy Micro had cash and cash equivalents of CNY 137 million, down 44.65% year-on-year, with operating cash flow weakening year by year. Last year, net operating cash inflow was CNY 43.7501 million, down 34.73% year-on-year, related to longer customer payment terms and increased inventory buildup.

Market observers point out that whether the M&A can realize cyclical dividends depends on the consolidation timeline and synergy realization. If a high premium acquisition results in significant goodwill, subsequent underperformance could trigger goodwill impairment, thereby eroding the listed company's profits.

Additionally, abnormal stock price movements before the transaction's suspension have raised suspicions of insider information leakage. In the two trading days before the suspension announcement (June 10-11), the stock surged nearly 19% with significantly higher volume, while the semiconductor index rose only 2.70%, markedly deviating from industry trends. The company stated that no insider information leakage or insider trading violations occurred among relevant parties.

As of press time, media attempts to contact Galaxy Micro's board office went unanswered.