SET tech-sector M&A update: Galaxy Microelectronics plans to acquire Hengtaike, with integration and valuation risks behind the 20CM relist rally
Galaxy Microelectronics (688689.SH), which had been suspended for more than half a month, resumed trading the day after disclosing its restructuring plan. The company plans to acquire 100% of Hengtaike Semiconductor held by Shanghai Zhineng Hengxin Industrial Electronics Co., Ltd., Gongqingcheng Mingnuo Investment Partnership (LP) and Tianmuyu Lin (Shanghai) Technology Co., Ltd. through a share issuance, while also raising supporting funds.
On the first day back, the stock hit a “20CM” limit-up, closing at 55.88 yuan per share. Its market value rose to about 7.2 billion yuan. Turnover was only 1.21%, while the limit-up order book reached 291 million shares, 185 times the day’s trading volume, representing more than 1.5 billion yuan in locked-in orders.
In a strong power-semiconductor cycle, the market gave a positive response to this long-established discrete-device maker’s plan to enter the mid- to high-voltage power-semiconductor segment through M&A. However, the deal still faces multiple controversies, including insider-trading suspicions triggered by a sharp pre-suspension price spike, the yet-to-be-finalized valuation of the target, and potentially heavy future goodwill pressure.
Jiang Han, senior researcher at Pangoal Institution, said the biggest integration challenge is the refined management of product lines and customers. After Hengtaike’s 700-plus products are folded in, the total will exceed 1,000, which will sharply raise the complexity of customer management and capacity allocation. In addition, core technology is highly tied to the R&D team; without proper equity incentives and non-compete clauses, the company may face technology loss and goodwill impairment risks.
Filling gaps through M&A: technical leap still faces real barriers
Galaxy Microelectronics’ acquisition of Hengtaike is an industrial M&A deal aimed at complementarity and synergy. If completed, the company is expected to quickly fill gaps in mid- and high-voltage power-semiconductor technology, broaden its high-end product lineup and improve its overall product matrix.
Galaxy Microelectronics, 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 its presence in high-end fields such as high-voltage MOSFETs, IGBTs and silicon carbide (SiC) has been relatively slow. Technical breakthroughs disclosed on paper have not yet translated into actual results, limiting the company’s penetration in high-end markets such as automotive electronics.
Industry-wise, global giants have already built full-chain technology loops covering materials, processes and manufacturing, while leading domestic IDM players have achieved mass production of 8-inch high-voltage MOS and IGBT products. Top-tier capacity continues to expand, and the window for latecomers is narrowing.
Against this backdrop, Hengtaike is the key lever Galaxy Microelectronics hopes to use to break through its technical bottlenecks. According to the restructuring plan, Hengtaike is mainly engaged in the research, development and sales of power-semiconductor products, is a national-level specialized and sophisticated “Little Giant” enterprise, and its products are used in power supplies, lithium battery protection, brushless motors, new energy, and E-cars (OBC, motor control) applications.
Hengtaike has industry-leading medium-voltage SGTMOSFET technology and high-voltage SuperJunction technology. Its mid- to high-voltage SGTMOSFET products in the 150V-200V range have reached top domestic standards and can be directly pin-to-pin matched with, and replace, Infineon’s medium-voltage series.
This deal is an industrial-chain integration of “Fabless design + IDM manufacturing”: Galaxy Microelectronics has mature chip manufacturing capacity but lacks high-end design capabilities, while Hengtaike has top-tier design technology but no in-house production line and has long been constrained by foundry capacity and cost swings. The two sides are complementary in business, but whether the synergy materializes depends on the actual implementation of post-merger integration.
Zhang Jiaming, general manager of the investment department, said that for small and mid-sized firms, M&A can shorten the development timeline. Industry leaders often spend decades building synergy systems, while smaller firms can use precise acquisitions to establish an initial full-industry-chain synergy framework and improve overall strength. But integration risk remains the biggest challenge, requiring refined management to reduce internal friction and bring different parts together to push strategy forward.
Valuation fog and funding pressure: deal pricing not yet settled
Galaxy Microelectronics warned that Hengtaike will face competitive pressure from both global giants and emerging domestic rivals. If the global macroeconomy weakens, downstream demand growth slows, or the semiconductor industry enters a deep and prolonged downturn, Hengtaike’s operating results may be affected.
The bigger uncertainty is that the final valuation and consideration have not yet been settled. As of the date the plan was signed, audit and valuation work for Hengtaike was still under way and the transaction price had not been disclosed. The share issuance price for this deal is set at 28.48 yuan per share, and the shares issued to counterparties will be locked up for 36 months. The supporting funds will be used to pay transaction taxes and fees, intermediary service fees, project construction costs, and to replenish listed company working capital and repay debt.
Unaudited data show that Hengtaike’s revenue in 2024 and 2025 was 206 million yuan and 193 million yuan, respectively, while net profit attributable to shareholders was 32.2325 million yuan and 35.718 million yuan, respectively, showing stable growth. As of the end of 2025, shareholders’ equity at the parent company level was only 416 million yuan, highlighting its asset-light profile.
Jiang Han said the core of valuing an asset-light semiconductor design firm lies in intangible assets such as IP cores and the R&D team. Traditional P/E and P/B models often fail because of earnings volatility and heavy upfront investment. A reasonable valuation should be based on a multi-stage discounted cash flow (DCF) model, supplemented by relative valuation cross-checks, while also factoring in qualitative risks such as technology iteration and downstream cyclicality.
From the listed company’s fundamentals, Galaxy Microelectronics’ net profit attributable to shareholders fell year on year in both 2022 and 2023. In 2024, revenue reached 909 million yuan, up 30.75% year on year, while net profit attributable to shareholders was 71.8742 million yuan, up only 12.21%. In 2025, revenue rose to 1.05 billion yuan, up 15.46%, and net profit attributable to shareholders was 79.9047 million yuan, with growth slowing to 11.17%.
On the funding side, cash and equivalents at the end of 2025 were only 137 million yuan, down 44.65% year on year, and operating cash flow has weakened year by year. Last year, net cash from operating activities was 43.7501 million yuan, down 34.73%, reflecting factors such as longer payment cycles from downstream customers and higher inventory build-up.
A private-fund insider said the key issue is not whether the deal closes, but the pace of consolidation and whether synergies are realized. Once Hengtaike is delivered and consolidated, it can boost the listed company’s earnings, but the combined scale of the two firms is still small, and whether they can achieve “1+1>2” remains uncertain. The biggest risk is a high-premium acquisition that creates large goodwill; if future results fall short, goodwill impairment could erode profits at the listed company.
Price action before suspension raised market doubts
Beyond integration and valuation, the stock’s unusual movement before suspension has also raised market doubts about possible leaks of inside information. Before the suspension announcement, Galaxy Microelectronics surged on June 10 and 11, rising nearly 19% over the two trading days on heavy volume, while the semiconductor industry index rose only 2.70% over the same period, a clear divergence from the sector.
The company said that none of the parties involved in the transaction had engaged in insider-information leaks or insider trading. In response to market concerns, Blue Whale News called Galaxy Microelectronics’ board secretary office on June 29, but received no reply as of press time.
