Galaxy Microelectronics Resumes 20CM Limit-Up: Acquiring Hunteck to Enter High-End Power Semiconductor Track, Valuation Undetermined Integration Tested

Blue Whale News, June 29 (Reporter Xu Gangan) After a trading suspension of more than half a month, Galaxy Microelectronics (688689.SH) disclosed a restructuring plan yesterday and resumed trading today. The company plans to acquire 100% equity of Hunteck 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 issuing shares, and simultaneously raise matching funds.

On the resumption day, the company's shares hit the "20CM" limit-up, closing at 55.88 yuan per share, with total market capitalization rising to about 7.2 billion yuan. Turnover rate was only 1.21%, with limit-up orders as high as 291 million shares, 185 times the day's trading volume, corresponding to over 1.5 billion yuan in funds, indicating strong market buying sentiment.

Amid the high prosperity cycle of the power semiconductor industry, the market gave a positive outlook on the traditional discrete device maker's move to enter the mid-high voltage power semiconductor track through M&A. However, the acquisition carries multiple controversies: insider trading allegations from abnormal share price spikes before suspension, undetermined valuation of the target, and potential large goodwill pressure in the future, creating multiple uncertainties for this industrial integration.

Jiang Han, a senior researcher at Pangoal Institution, told Blue Whale News that the biggest integration challenge lies in the fine management of product lines and customers. After incorporating Hunteck's more than 700 products, the total will exceed 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.

Targeted at 'Filling Gaps' via M&A, Technology Leap Still Faces Real Barriers

Compared with some listed companies' cross-industry M&A with no synergy with the main business, Galaxy Microelectronics' acquisition of Hunteck is a typical industry consolidation focusing on filling gaps and synergy. If the deal goes through, the company is expected to quickly fill its mid-high voltage power semiconductor technology gap, plug high-end product blanks, 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 business base. However, its progress in high-end areas such as high-voltage MOSFETs, IGBTs, and silicon carbide (SiC) has been slow. The disclosed technical breakthroughs have not yet translated into actual performance, constraining the company's penetration into high-end markets such as automotive electronics.

Currently, international giants like Infineon, ON Semiconductor, and STMicroelectronics have built full-chain technology closures covering materials, processes, and manufacturing. Domestic IDM leaders like Silan Microelectronics and Yangjie Technology have also achieved mass production of 8-inch high-voltage MOSFETs and IGBTs, with continuous capacity release from top-tier industry players, narrowing the window for latecomers.

Against this backdrop, Hunteck has become a key lever for Galaxy Microelectronics to break through its technology bottleneck. According to the restructuring plan, Hunteck is a national-level specialized and new "Little Giant" enterprise mainly engaged in research, development, and sales of power semiconductor products. Its products are widely used in various power supplies, lithium battery protection, brushless motors, new energy, e-car (OBC, electronic control), etc. Hunteck possesses industry-leading mid-voltage SGT MOSFET and high-voltage Super Junction technologies. Compared with domestic competitors, Hunteck's 150V-200V mid-high voltage SGT MOSFET has reached the top domestic level and can directly Pin-to-Pin benchmark and replace Infineon's mid-voltage series products.

This transaction is a typical "Fabless design + IDM manufacturing" industrial chain integration. Galaxy Microelectronics has mature chip manufacturing capacity but lacks high-end design capability. Hunteck has top-notch design technology but no own production lines, long-term constrained by foundry capacity and cost fluctuations. There is complementary space at the business level, but whether the synergy effect can be realized still depends on the actual implementation of subsequent integration.

Zhang Jiaming, Investment Department General Manager of Guangzhou Ruizi Venture Capital Management Co., Ltd., told Blue Whale News that for small and medium-sized companies, the biggest advantage of M&A is greatly shortening the time window for development. Industry leading companies often take decades to build a complete industrial chain synergy system, while small and medium-sized companies can initially have a full industrial chain synergy prototype through precise M&A, thereby comprehensively enhancing comprehensive strength in a complex competitive environment.

"Although M&A has obvious advantages, small and medium-sized companies also face many risks, among which integration risk is undoubtedly the biggest challenge. Two or more companies often have significant differences in organizational structure, corporate culture, team integration, and technology R&D paths. Only through fine management, deep integration of multiple advantages, and minimizing internal friction can true synergy be formed and the overall strategy be implemented," Zhang said.

Valuation Fog and Funding Pressure: M&A Game Yet to Price

But behind the industry boom, market competition has become white-hot. The potential risks of this M&A cannot be ignored.

Galaxy Microelectronics' plan warned that Hunteck will face two-way competitive pressure from international giants and domestic newcomers. Meanwhile, if the global macro economy weakens, downstream end demand growth slows, or the semiconductor industry experiences a deep, sustained downturn, Hunteck's operating results will be directly affected.

A more core uncertainty is that the final valuation and consideration for this transaction have not yet been determined. As of the plan signing date, Hunteck's audit and valuation work is still in progress, and the transaction price has not been disclosed. The issue price for the shares issued in this transaction is set at 28.48 yuan per share, and the lock-up period for shares obtained by the transaction counterparties is 36 months. The matching funds raised will be used to pay transaction taxes and fees, intermediary costs, target project construction, and supplement working capital and repay debts of the listed company.

Unaudited data shows that Hunteck'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 respectively, with stable profit growth. As of end of 2025, Hunteck's parent company shareholders' equity was only 416 million yuan, with significant light-asset attributes.

When discussing the valuation of M&A targets, Jiang Han told Blue Whale News that the valuation of light-asset semiconductor design companies mainly lies in 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. In his view, a reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, supplemented by relative valuation methods for cross-validation. At the same time, qualitative factors such as technology iteration risk and downstream application cyclicality should be incorporated into quantitative considerations. As for how to judge whether there is a premium bubble, one cannot simply refer to book net assets or short-term profits. Instead, a comprehensive assessment of the target's technological scarcity in the sub-segment, commercialization progress, and transaction payment structure is needed to reach a more prudent judgment.

From the listed company's fundamentals, Galaxy Microelectronics' net profit attributable to parent declined year-on-year for two consecutive years from 2022 to 2023. In 2024, the company achieved revenue of 909 million yuan, up 30.75% year-on-year; net profit attributable to parent was 71.8742 million yuan, up only 12.21% year-on-year, with profit growth significantly weaker than revenue growth. In 2025, growth momentum further slowed, with annual revenue of 1.05 billion yuan, up 15.46% year-on-year; net profit attributable to parent was 79.9047 million yuan, with year-on-year growth slowing to 11.17%, showing overall weak growth.

On the funding side, the company's financial pressure has further increased. As of end of 2025, Galaxy Microelectronics had monetary funds of only 137 million yuan, down 44.65% year-on-year. Meanwhile, the company's operating cash flow has weakened year by year, affected by longer customer payment cycles and increased inventory. Last year, the company's net operating cash inflow was 43.7501 million yuan, down 34.73% year-on-year.

"Whether this M&A can realize the prosperity dividend depends not on the completion of the transaction, but on the pace of consolidation and synergy realization," a person from a private equity institution told Blue Whale News. "Hunteck itself has stable revenue and profit. After the transaction is consolidated, it can directly boost the listed company's performance. However, the overall size of both companies is relatively small, neither is an industry leader, so whether the '1+1>2' synergy can be achieved remains uncertain. The biggest risk is a high-premium acquisition forming large goodwill. If performance fails to meet expectations later, goodwill impairment will directly erode the listed company's profits."

The person further pointed out that the market's craze for semiconductor companies transforming into high-end tracks through M&A tests not short-term boom capture but long-term performance realization and integration effectiveness after M&A.

In addition, the abnormal stock price movement before the trading suspension also sparked widespread market suspicion of insider information leakage.

Before the suspension announcement, Galaxy Microelectronics' share price surged suddenly on June 10 and 11, rising nearly 19% cumulatively over two trading days with significantly increased volume. During the same period, the semiconductor sector index rose only 2.70%, showing a significant deviation from the industry index. The precise early abnormal movement sparked heated market discussion. In response, the company issued a statement saying that the relevant parties involved in this transaction have no violations such as insider information leakage or insider trading.

Regarding market concerns, Blue Whale News called Galaxy Microelectronics' board secretary office on June 29. No response was received by the time of reporting.