GigaDevice(SH:603986) Jin Rong Jie·2025-06-20 13:00Core Viewpoint - The company, Zhaoyi Innovation, is pursuing a listing on the Hong Kong Stock Exchange despite having substantial cash reserves, indicating a strategic move to enhance its global presence and competitiveness in the semiconductor industry [1][8][9]. Company Overview - Zhaoyi Innovation, founded in April 2005, is a leading chip design company with a market capitalization exceeding 81.8 billion RMB as of June 19, 2025 [1]. - The company specializes in various chip designs, including Flash, niche DRAM, MCU, analog chips, and sensor chips, serving multiple markets such as consumer electronics, automotive, industrial, and IoT [1]. Market Position - According to Frost & Sullivan, Zhaoyi Innovation ranks among the top ten global integrated circuit design companies in several categories, including second in NOR Flash and sixth in SLC NAND Flash [2]. - The company has notable shareholders, including Hong Kong Central Clearing Limited and various investment funds, indicating strong market confidence [2]. Financial Performance - Zhaoyi Innovation's revenue from 2022 to 2024 shows significant fluctuations, with revenues of 81.3 billion RMB in 2022, dropping to 57.61 billion RMB in 2023, and recovering to 73.56 billion RMB in 2024 [3]. - The company's reliance on specialized storage chips is evident, with these products accounting for over 70% of total revenue during the same period [3][4]. Inventory and Asset Management - The company has faced challenges with inventory management, recording impairment losses of 1.77 billion RMB in 2022, 2.37 billion RMB in 2023, and 1.72 billion RMB in 2024 due to declining product prices [5][6]. - Despite these challenges, Zhaoyi Innovation anticipates a market rebound in 2024, driven by improved demand and AI-related growth [6]. IPO Strategy - The IPO aims to support Zhaoyi Innovation's global strategy, enhance its international brand image, and facilitate entry into international supply chains [8]. - The company plans to use the raised funds for R&D, strategic investments, global expansion, and working capital [8]. Market Reactions - Following the announcement of the IPO, Zhaoyi Innovation's stock experienced volatility, reflecting market uncertainty regarding its strategic direction [8][9].