Galaxy Microelectronics Acquires Hangtaike: 20CM Rebound & Power Semiconductor Consolidation

Galaxy Microelectronics (688689.SH) resumed trading after a two-week suspension, announcing a restructuring plan. The company plans to acquire 100% equity of Hangtaike Semiconductor from three shareholders via share issuance, along with supporting fundraising.

On the first day back, shares surged by the 20% daily limit to close at 55.88 yuan per share, pushing market cap to about 7.2 billion yuan, with a turnover rate of only 1.21%. Buy orders at the limit reached 291 million shares, 185 times the day's trading volume, corresponding to over 1.5 billion yuan.

In the high-cycle power semiconductor industry, the market gave a positive response to Galaxy Microelectronics' move into the medium- and high-voltage segment. However, the acquisition faces multiple controversies: insider trading allegations due to unusual pre-suspension share price surges, undetermined target valuation, and potential large goodwill pressure.

Jiang Han, a senior researcher at Pangu Think Tank, said the biggest integration challenge is fine management of product lines and customers. Hangtaike has over 700 products, bringing the total to over 1,000, sharply increasing complexity in customer management and capacity allocation. Secondly, core technology is highly tied to the R&D team; without adequate equity incentives and non-compete clauses, there is a risk of technology loss and goodwill impairment.

Aiming to Fill Gaps Through M&A, but Tech Hurdles Remain

Unlike some listed companies pursuing cross-border or non-synergistic acquisitions, Galaxy Microelectronics' acquisition of Hangtaike is an industry consolidation to fill gaps and enhance synergy. After the deal, the company expects to quickly fill its medium- and high-voltage power semiconductor technology gaps and improve its overall product matrix.

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, but lagged in high-voltage MOSFETs, IGBTs, and silicon carbide (SiC). Disclosed technological breakthroughs have yet to translate into actual performance, limiting its penetration into high-end markets like automotive electronics.

Currently, global giants like Infineon, ON Semiconductor, and STMicroelectronics have built full-chain technology loops covering materials, processes, and manufacturing. Domestic IDM leaders such as Silan Microelectronics and Yangjie Technology have achieved mass production of 8-inch high-voltage MOSFETs and IGBTs, narrowing the catch-up window.

In this context, Hangtaike becomes a key lever for Galaxy Microelectronics to break through technical bottlenecks. According to the restructuring plan, Hangtaike is a national-level specialized 'Little Giant' enterprise focused on R&D, development, and sales of power semiconductor products, applied in power supplies, lithium battery protection, brushless motors, new energy, and E-car (OBC, electronic control). Hangtaike possesses medium-voltage SGT MOSFET and high-voltage Super Junction technology. Its 150V-200V medium-high voltage SGT MOSFETs have reached domestic top-tier levels, pin-to-pin comparable to Infineon's medium-voltage series.

The transaction is a 'Fabless design + IDM manufacturing' integration. Galaxy has mature chip manufacturing capacity but lacks high-end design capability; Hangtaike has top design technology but no own fab, long constrained by foundry capacity and cost fluctuations. The two have complementary business potential, but synergy realization depends on post-merger integration.

Zhang Jiaming, Investment Department GM at Guangzhou Ruizhi Venture Capital Management, said that for SMEs, M&A can shorten development time. Industry leaders often take decades to build industry chain synergy, while SMEs through precise M&A can form a preliminary full-chain synergy to enhance overall strength.

Zhang also noted that while M&A has significant advantages, integration risk remains the biggest challenge. Differences in organizational structure, corporate culture, team integration, and R&D paths exist. Only through fine management to deeply merge strengths and reduce internal friction can synergy drive strategy.

Valuation Fog and Funding Pressure: Undetermined Negotiation

Galaxy Microelectronics warned in the plan that Hangtaike faces dual competitive pressure from international giants and domestic newcomers. If the global macro economy weakens, downstream demand slows, or the semiconductor industry enters a deep, sustained downturn, Hangtaike's performance could be affected.

A more core uncertainty is that the final valuation and consideration have not been determined. As of the plan signing date, auditing and valuation of Hangtaike are still in progress, and transaction price has not been disclosed. The share issuance price is set at 28.48 yuan per share, with a 36-month lock-up period. The fundraising will be used for transaction fees, intermediary costs, target project construction, and supplementary working capital and debt repayment of the listed company.

Unaudited data shows Hangtaike's 2024 and 2025 revenue were 206 million yuan and 193 million yuan respectively; net profit attributable to parent was 32.23 million yuan and 35.72 million yuan, maintaining stable growth. As of end-2025, Hangtaike's parent shareholders' equity was only 416 million yuan, indicating a light asset nature.

Jiang Han noted that valuation of fabless semiconductor design companies relies on intangible assets like IP cores and R&D teams. Traditional PE/PB models often fail due to earnings volatility and high upfront costs. Reasonable valuation should be based on multi-stage DCF model, supplemented by relative valuation cross-validation, incorporating qualitative factors like technology iteration risk and downstream application cycles. Determining whether there is a premium bubble cannot simply reference book net assets or short-term profits, but should comprehensively assess the target's technological scarcity in its niche, commercialization progress, and transaction payment structure.

From the perspective of Galaxy's fundamentals, net profit fell year-on-year in 2022 and 2023. In 2024, revenue reached 909 million yuan, up 30.75%; net profit was 71.87 million yuan, up only 12.21%. In 2025, full-year revenue was 1.05 billion yuan, up 15.46%; net profit was 79.90 million yuan, slowing to 11.17% growth, indicating slowing momentum.

On funding, pressure has emerged. As of end-2025, Galaxy's cash was only 137 million yuan, down 44.65% year-on-year. Operating cash flow net inflow was 43.75 million yuan, down 34.73%, affected by longer customer payment cycles and increased inventory.

A source from a private equity firm believes whether the acquisition realizes cyclical dividends depends on consolidation timing and synergy delivery. Hangtaike has stable revenue and profit; post-closing consolidation can boost Galaxy's earnings. But with both companies small, whether '1+1>2' synergy can be achieved remains uncertain. The biggest risk is high premium leading to large goodwill; if subsequent performance falls short, goodwill impairment will erode earnings.

The source emphasized that the market's hype over the acquisition's shift to the high-end track is not about short-term cycle, but about long-term performance delivery and integration effectiveness.

Additionally, unusual share price movement before the suspension raised insider trading concerns. On June 10-11, Galaxy's shares surged, gaining nearly 19% in two days with heavy volume; the semiconductor index rose only 2.70%. The company stated that no insider information leak or insider trading occurred.

On June 29, Blue Whale News tried to contact Galaxy Microelectronics' board office but received no reply.