Behind the '20% Daily Limit Up' Resumption: Galaxy Micro-Electronics Plans M&A to Break into Medium-High Voltage Power Semiconductor Track
Galaxy Micro-Electronics (688689.SH), suspended for over half a month, disclosed a restructuring plan yesterday and resumed trading today. The company plans to acquire 100% equity of Htek Semiconductor from Shanghai Zhineng Hengxin Industrial Electronics Co., Ltd., Gongqingcheng Mingnuo Investment Partnership (Limited Partnership), and Tianmuyulin (Shanghai) Technology Co., Ltd. via share issuance, along with matching fundraising.
On the resumption day, the stock hit the 20% daily limit up, closing at 55.88 yuan\/share, with total market cap rising to about 7.2 billion yuan. Turnover rate was only 1.21%, with a limit-up order block of 291 million shares, 185 times the day's trading volume, representing over 1.5 billion yuan in funds, reflecting strong market buying sentiment.
Amid the high prosperity cycle of the power semiconductor industry, the market has given a positive outlook to this veteran discrete device manufacturer's move to enter the medium- and high-voltage power semiconductor track through M&A. However, the acquisition still faces multiple controversies, including insider trading suspicions due to abnormal stock price surges before suspension, the yet-to-be-determined target valuation, and potential large goodwill pressure in the future.
Jiang Han, a senior researcher at Pangoal Institution, stated that the biggest integration challenge of this transaction lies in the refined management of product lines and customers. After Htek's over 700 products are merged, the total will exceed 1,000, significantly 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.
M&A to 'Fill Gaps': Technology Leap Still Faces Real Barriers
The M&A of Htek by Galaxy Micro-Electronics is an industrial acquisition to fill gaps and enhance synergy. Upon completion, the company is expected to bridge its deficiencies in medium- and high-voltage power semiconductor technology, fill the gap in high-end products, and improve its overall product matrix.
Galaxy Micro-Electronics, a semiconductor discrete device company listed on the STAR Market in 2021, has long relied on small-signal devices and low-voltage power devices as its core business, but has lagged in high-end areas such as high-voltage MOSFETs, IGBTs, and silicon carbide (SiC). Disclosed technological breakthroughs have not yet translated into actual performance, constraining the company's penetration into high-end markets such as automotive electronics.
At the industry level, international giants like Infineon, ON Semiconductor, and STMicroelectronics have built closed-loop technology chains covering materials, processes, and manufacturing. Domestic IDM leaders such as Silan Micro and YJ Technology have also achieved mass production of 8-inch high-voltage MOSFETs and IGBTs. Industry leading capacity continues to expand, narrowing the window for latecomers.
In this context, Htek has become a key lever for Galaxy Micro-Electronics to break through technological bottlenecks. According to the restructuring plan, Htek is a national-level specialized and new 'Little Giant' enterprise primarily engaged in the research, development, and sales of power semiconductor products. Its products are used in various power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, electronic control) applications. Htek possesses medium-voltage SGTMOSFET technology and high-voltage SuperJunction technology. Among these, medium- and high-voltage SGTMOSFETs in the 150V-200V range have reached domestic top-tier levels, capable of pin-to-pin matching and replacing Infineon's medium-voltage series products.
This transaction is described as a 'Fabless design + IDM manufacturing' industry chain integration: Galaxy Micro-Electronics has mature chip manufacturing capacity but lacks high-end design capabilities; Htek has top-tier design technology but no own production lines, long constrained by foundry capacity and cost fluctuations. Whether synergy effects can be realized depends on the actual implementation of subsequent integration.
Zhang Jiaming, General Manager of the Investment Department at Guangzhou Ruizi Venture Capital Management Co., Ltd., believes that M&A can significantly shorten the development time window for small and medium-sized companies. Through precise acquisitions, they can initially form a full industry chain synergy prototype and enhance comprehensive strength. However, integration risks remain the biggest challenge, requiring refined management to integrate organizational structure, corporate culture, teams, and R&D paths, reduce internal friction, and form a joint force to drive strategy implementation.
Valuation Fog and Capital Pressure: The M&A Game Key Lies in Integration
According to the risk warnings in the plan, Htek will face dual competitive pressures 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, Htek's operating performance may be affected.
A more fundamental uncertainty is that the final valuation and consideration have not yet been determined. As of the signing date of the plan, Htek's audit and appraisal are still in progress, and the transaction price has not been disclosed. The share issuance price is set at 28.48 yuan per share, with a lock-up period of 36 months for the shares received by the transaction counterparties. The matching funds will be used to pay transaction taxes and fees, intermediary costs, target project construction, and to supplement the listed company's working capital and repay debts.
Unaudited data shows that Htek'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 35.718 million yuan, maintaining stable growth. As of the end of 2025, Htek's parent company equity was only 416 million yuan, highlighting its asset-light nature.
When discussing the target valuation, Jiang Han pointed out that the valuation of asset-light semiconductor design companies is primarily based on intangible assets such as IP cores and R&D teams. Traditional PE\/PB models often fail due to high earnings volatility and heavy upfront investments. He believes a reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, supplemented by relative valuation cross-validation, while incorporating qualitative factors such as technology iteration risks and downstream application cyclicality into quantitative considerations.
From the listed company's fundamentals, Galaxy Micro-Electronics' net profit attributable to parent declined year-on-year from 2022 to 2023. In 2024, the company achieved operating 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. In 2025, growth momentum further slowed, with full-year revenue of 1.050 billion yuan, up 15.46% year-on-year; net profit attributable to parent was 79.9047 million yuan, with growth rate slowing to 11.17%.
On the capital front, as of the end of 2025, Galaxy Micro-Electronics' cash and cash equivalents were only 137 million yuan, down 44.65% year-on-year; operating cash flow weakened year by year, affected by extended downstream customer payment cycles and increased inventory, leading to net operating cash inflow of 43.7501 million yuan last year, down 34.73% year-on-year.
A source from a private equity institution said that whether M&A can realize cyclical gains depends on the pace of consolidation and synergy realization. Htek itself has stable revenue and profits, and after consolidation, it will boost the listed company's performance. However, both companies are relatively small, and whether they can achieve a '1+1>2' synergy remains uncertain. The biggest risk is that high-premium acquisitions may result in large goodwill; if performance later falls short, goodwill impairment will erode the listed company's profits.
Pre-Suspension Stock Price Anomaly: Market Keeps Eye on Information Compliance
Additionally, the abnormal stock price movement before the suspension of this transaction has raised widespread market concerns about insider information leakage. Before the suspension announcement, Galaxy Micro-Electronics' stock price surged sharply on June 10 and 11, accumulating nearly 19% over two trading days with significant volume expansion. During the same period, the semiconductor industry index only rose 2.70%, showing a significant deviation from the industry index.
The company issued a statement saying that no insider information leakage, insider trading, or other irregularities existed among relevant parties involved in this transaction. Regarding market concerns, Blue Whale News called Galaxy Micro-Electronics' board secretary office on June 29, but received no response as of press time.
