Behind the '20CM' Limit Up on Resumption: Galaxy Micro's M&A Breakthrough in Medium-High Voltage Power Semiconductors

Galaxy Micro (688689.SH), after being suspended for over half a month, resumed trading today following the disclosure of 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.—by issuing shares, and simultaneously raise supporting funds.

On the first day of resumption, the stock hit a '20CM' limit up, closing at 55.88 yuan per share, raising total market value to approximately 7.2 billion yuan, with a turnover rate of only 1.21%. The limit-up order book reached 291 million shares, 185 times the day's trading volume, representing over 1.5 billion yuan in orders.

Amid the high cycle of the power semiconductor industry, the market has given positive expectations to Galaxy Micro's M&A move into the medium-high voltage power semiconductor segment. However, the acquisition still faces multiple controversies: insider trading allegations from abnormal share price surges before the suspension, undetermined valuations of the target, and potential large goodwill burdens in the future, casting uncertainty over industrial integration.

Integration Challenges: Complexity in Product Lines and Customer Management

Jiang Han, a senior researcher at Pangoal Institution, said the biggest integration challenge lies in fine management of product lines and customer segments. With over 700 products from Hengtaike merging in, the total will exceed 1,000, sharply increasing management complexity. Second, core technology is heavily tied to the R&D team; without reasonable equity incentives and non-compete clauses, there is a risk of technology loss and goodwill impairment.

Filling Gaps through M&A: Technological Leap Still Faces Real Barriers

Galaxy Micro's acquisition of Hengtaike is a typical industrial M&A to fill gaps and enhance synergy. After completion, the company is expected to remedy its deficiency in medium-high voltage power semiconductor technology, fill high-end product gaps, and improve its overall product matrix.

Galaxy Micro, a semiconductor discrete device company listed on the STAR Market in 2021, has long focused on small-signal devices and low-voltage power devices. Its slow progress in high-voltage MOSFET, IGBT, and SiC high-end areas, with disclosed technological breakthroughs not yet translating into actual performance, has constrained its penetration into high-end markets like automotive electronics.

As industry leaders continue capacity expansion, Hengtaike has become a key lever for Galaxy Micro to overcome technical bottlenecks. According to the restructuring plan, Hengtaike is a national-level specialized and new 'Little Giant' enterprise engaged in the research, development, and sales of power semiconductor products, applied in various power supplies, lithium battery protection, brushless motors, new energy, and e-car (OBC, electronic control) fields. Hengtaike possesses medium-voltage SGT MOSFET and high-voltage Super Junction technologies; its 150V-200V medium-high voltage SGT MOSFET has reached domestic top-tier levels, capable of pin-to-pin replacement of Infineon's medium-voltage series products.

This transaction represents a 'Fabless design + IDM manufacturing' integration. Galaxy Micro has mature chip manufacturing capacity but lacks high-end design capabilities; Hengtaike has top-tier design technology but no own fab, long constrained by foundry capacity and cost fluctuations. While complementary in business, synergy realization depends on subsequent integration execution.

Valuation Fog and Funding Pressure: Unpriced Bargaining

Market enthusiasm for semiconductor M&A targeting high-end segments, but this deal faces multiple uncertainties. Galaxy Micro's plan warns of dual competitive pressure from international giants and domestic newcomers; if global macroeconomics weakens or downstream demand growth slows, or if the semiconductor industry experiences a deep, sustained downturn, Hengtaike's performance could be affected.

More fundamentally, the final valuation and consideration remain undetermined. As of the plan signing date, auditing and valuation of Hengtaike were still in progress, and the transaction price was not disclosed. The share issuance price was set at 28.48 yuan per share, with a 36-month lock-up period for transaction counterparties. Supporting funds will be used for transaction fees, intermediary fees, project construction, and supplementing working capital and debt repayment.

Unaudited data shows Hengtaike's 2024 and 2025 revenues were 206 million yuan and 193 million yuan respectively; net profit attributable to parent was 32.2325 million yuan and 35.718 million yuan, with stable profit growth. As of end-2025, Hengtaike's parent company shareholders' equity was only 416 million yuan, reflecting a light-asset nature.

In valuation discussions, Jiang Han noted that for light-asset semiconductor design companies, valuation core lies in intangible assets like IP cores and R&D teams. Traditional PE/PB models often fail due to profit volatility and high upfront investment. Reasonable valuation should be based on multi-stage DCF models, supplemented by relative valuation cross-validation, incorporating qualitative factors like technology iteration risk and downstream cycle into quantitative considerations. Whether premium bubbles exist cannot be simply judged by book net assets or short-term profits, but requires comprehensive assessment of technology scarcity, commercialization progress, and payment structure.

From Galaxy Micro's fundamentals, net profit attributable to parent declined year-on-year from 2022 to 2023. In 2024, revenue was 909 million yuan, up 30.75% year-on-year; net profit attributable was 71.8742 million yuan, up only 12.21%. In 2025, full-year revenue was 1.05 billion yuan, up 15.46%; net profit attributable was 79.9047 million yuan, with growth slowing to 11.17%.

On the funding side, Galaxy Micro's cash and cash equivalents were only 137 million yuan at end-2025, down 44.65% year-on-year. Operating cash flow weakened year by year, affected by longer customer payment cycles and increased inventory; operating cash inflow was 43.7501 million yuan last year, down 34.73% year-on-year.

A private equity institution source said the key to realizing the M&A's cyclical dividend lies in consolidation timing and synergy realization. Hengtaike has stable revenue and profit, which can boost the listed company's performance upon consolidation, but both entities are relatively small, and whether '1+1>2' synergy can be achieved remains uncertain. The biggest risk is that a high premium acquisition creates substantial goodwill; if subsequent performance falls short, goodwill impairment will erode the listed company's profits.

Pre-Suspension Share Price Anomaly Raises Insider Trading Questions

Additionally, the abnormal share price movement before the suspension has raised market questions about insider information leakage. In the two trading days before the suspension announcement (June 10-11), Galaxy Micro's share price surged, with a cumulative gain of nearly 19% and significantly increased trading volume; over the same period, the semiconductor industry index rose only 2.70%, showing a clear deviation. The company issued a statement that no insider information leakage or insider trading violations occurred among transaction-related parties.

Regarding market concerns, Blue Whale News called Galaxy Micro's board office on June 29 but received no response by press time.