In this field again, the largest IPO in A-share fundraising this year was on the Science and Technology Innovation Board Chips | Index | Science and Technology Innovation Board
On August 7th, domestic wafer foundry giant Huahong Semiconductor Co., Ltd. went public on the Science and Technology Innovation Board, achieving a dual listing of "A+H". The opening price on the first day was 58.88 yuan per share, and as of the close of the second day of listing, it was at 53.39 yuan per share.
The third largest in the history of the Science and Technology Innovation Board
Huahong Company issued 407.75 million shares at a price of 52 yuan, with a P/E ratio of 34.71 times, and raised 21.203 billion yuan. This has become the largest A-share IPO since 2023, and also the third largest IPO in the history of the Science and Technology Innovation Board after SMIC and BeiGene.
According to public information, Huahong Semiconductor Co., Ltd. is located in Pudong New Area, Shanghai. Its main business is characteristic process wafer foundry, providing wafer foundry and supporting services on diverse characteristic process platforms including embedded/independent non-volatile memory, power devices, analog and power management, logic and RF, etc. According to the ranking of global wafer foundry enterprises in 2021 released by IC Insights, Huahong ranked sixth in the world and second in Chinese Mainland. In 2022, the company achieved a revenue of nearly 16.8 billion yuan and a net profit of over 2.7 billion yuan. Huahong Company is also a member of Huahong Group, which focuses on integrated circuit manufacturing and possesses the "8 inch+12 inch" production line technology.
The prospectus disclosed by Huahong Company shows that the funds raised by the company are mainly used for Huahong Manufacturing Project, 8-inch factory optimization and upgrading project, characteristic process technology innovation research and development project, and supplementary working capital. Previously, the company entered into agreements with Huahong Hongli, National Integrated Circuit Industry Fund II, and Wuxi entities to establish a joint venture through the joint venture company to engage in the manufacturing and sales of integrated circuits and 12 inch wafers using 65/55nm to 40nm processes.
Capital assisted integrated circuits
The integrated circuit industry is the core of the information technology industry, and with the gradual promotion of domestic substitution, the support of the capital market for the industry is also increasing. According to statistics, since 2023, the fundraising amount of A-share semiconductor IPOs has exceeded 60 billion yuan, ranking first in various industries. In the first half of this year, the Shanghai Science and Technology Innovation Board accounted for three of the top ten IPOs globally, with two companies belonging to the integrated circuit field.
The Science and Technology Innovation Board has a significant agglomeration effect on integrated circuit enterprises. At present, more than 100 companies in the field of integrated circuits have been listed on the Science and Technology Innovation Board, accounting for half of the A-share companies in the same category, and it is also the area with the highest proportion on the Science and Technology Innovation Board. The company covers upstream design, midstream contract manufacturing, downstream packaging and testing, as well as supporting links such as equipment, materials, EDA tools and software, IP technology licensing, etc., forming a complete chain and collaborative innovation industrial development pattern. It has gathered multiple backbone enterprises such as contract manufacturing leader SMIC International, silicon wafer leader Shanghai Silicon Industry, and domestic CPU leader Longxin Zhongke.
In the iconic Science and Technology Innovation 50 Index of the Science and Technology Innovation Board, semiconductor companies also account for nearly half of the weight. The Science and Technology Innovation Board has also launched a chip index, selecting securities of listed companies in the fields of semiconductor materials and equipment, chip design, chip manufacturing, chip packaging and testing with larger market values as index samples, including well-known enterprises such as SMIC, Lanqi Technology, Zhongwei, Jingchen Shares, and Shanghai Silicon Industry.
With the support of fundraising from the Science and Technology Innovation Board, integrated circuit companies have also performed well. In 2022, the leading semiconductor foundry company SMIC achieved a historic high in performance, with operating revenue and net profit attributable to shareholders reaching RMB 49.516 billion and RMB 12.133 billion, respectively. Five semiconductor equipment companies, including Tuojing Technology and Shengmei Shanghai, have doubled their performance and steadily increased their orders on hand.
