Core Viewpoint - Zhejiang Liji Storage Technology Co., Ltd. (Liji Storage) is preparing for an IPO on the Hong Kong Stock Exchange, facing challenges in balancing scale expansion and stable profitability due to ongoing losses and low gross margins compared to industry averages [1][2]. Group 1: Company Background and Ownership Structure - Liji Storage was established in March 2020, with initial investments from Tianjin Haoxin and Longxin Zhongke, and has since integrated Zentel Japan to establish its core business [3][4]. - The company is controlled by Ying Wei through a multi-layered equity structure, with significant involvement from Dinghui Investment, which has raised market interest regarding its ownership adjustments [2][9]. - As of now, Liji Storage has 28 direct shareholders, with Hangzhou Dingyuan as the largest shareholder holding 22.67% [9]. Group 2: Financial Performance and Challenges - Liji Storage has reported continuous losses, with adjusted net losses narrowing from RMB 1.39 billion in 2022 to RMB 498.22 million in 2023, largely due to significant share-based payment expenses [20][21]. - The company’s revenue structure is shifting, with memory module sales increasing significantly, contributing to 40.1% of revenue in the first half of 2025, while core memory chip revenue is declining [20][22]. - The gross margin for memory chips remains higher than that of memory modules, indicating a strategic challenge in balancing growth and profitability [24]. Group 3: Market Position and Product Development - Liji Storage focuses on niche DRAM markets, with a total storage capacity growth from approximately 13.8 million GB in 2022 to about 34.2 million GB in 2024, reflecting a compound annual growth rate of 57.4% [19]. - The company relies heavily on external suppliers for core production processes, which increases material costs and impacts gross margins [15][17]. - Liji Storage has established itself as a key supplier for major domestic computer and server manufacturers, indicating a growing market presence [20].

Group 1 - The semiconductor industry is a hot area for IPOs this year, with several companies like ZheJiang LiJi Storage Technology Co., Ltd. recently attempting to enter the capital market [1][2] - ZheJiang LiJi Storage is a memory chip design company and AI computing solution provider, offering a complete product line from SDR to DDR4 [3][8] - The company operates in a competitive niche DRAM market, which is characterized by significant cyclicality, and has incurred cumulative losses of 490 million RMB over the past three years [4][29] Group 2 - The company's history dates back to 2020 when its controlling shareholder recognized the potential of DRAM and acquired a majority stake in Zentel Japan, inheriting the "Zentel" brand [6] - The company was initially backed by Longxin Zhongke, but after several rounds of capital increases and share transfers, it is now primarily supported by multiple investment entities under Dinghui Investment [7] - As of May 20, 2025, the controlling shareholder is Wei Ying, who has extensive experience in various listed companies [7] Group 3 - ZheJiang LiJi Storage's revenue from memory chips, modules, and KGD wafers for 2024 is projected to be 70.2%, 21.3%, and 8.4% respectively [9] - The company's revenue has fluctuated in recent years, with figures of 610 million RMB, 580 million RMB, and 646 million RMB for 2022, 2023, and 2024 respectively, alongside net losses of 139 million RMB, 244 million RMB, and 109 million RMB [11][12] - The average selling price of memory chips has dropped significantly from 42.7 RMB per GB in early 2022 to 19.8 RMB per GB by the end of 2023, a decrease of 53.63% [13] Group 4 - The company has a high R&D expenditure, which accounted for 12.1%, 13.3%, and 14.8% of its revenue in 2022, 2023, and 2024 respectively, contributing to its losses [15] - As of 2024, the company has 137 employees, with approximately 53.3% in the R&D department, primarily sourced from major semiconductor firms [16] - The company relies on external wafer manufacturing and packaging services, with significant procurement from its top suppliers [16] Group 5 - The global integrated circuit market is projected to reach 3.81 trillion RMB in 2024, with the memory chip market accounting for 1.19 trillion RMB, representing 31.3% of the total [22] - The DRAM segment is expected to dominate the memory chip market, with a projected market size of 697.9 billion RMB in 2024, capturing 58.7% of the market [22] - The niche DRAM market in China is anticipated to reach 37.9 billion RMB in 2024, with the competitive landscape expected to improve as international players gradually exit [27][29]

Core Viewpoint - Zhejiang Lijichuang Storage Technology Co., Ltd. (referred to as "Lijichuang Storage") has submitted its prospectus for listing on the Hong Kong Stock Exchange, aiming to raise funds for enhancing R&D, production capabilities, and global sales and marketing efforts [1][2]. Company Overview - Lijichuang Storage traces its history back to 2020, when its controlling shareholder recognized the potential of DRAM and acquired a 20% stake in Zentel Japan, later increasing its ownership [2][3]. - The company is a memory chip design firm and AI computing solution provider, with total storage capacity sold increasing from approximately 13.8 million GB in 2022 to about 34.2 million GB in 2024, representing a compound annual growth rate (CAGR) of 57.4% [3]. Financial Performance - Revenue for Lijichuang Storage was approximately RMB 610 million in 2022, RMB 580 million in 2023, and is projected to be RMB 646 million in 2024. The net losses were approximately RMB 139 million, RMB 244 million, and RMB 109 million for the respective years [4][6]. - The adjusted net losses, according to non-International Financial Reporting Standards, were approximately RMB 137 million, RMB 93.2 million, and RMB 52.8 million for 2022, 2023, and 2024 [7]. Shareholder Structure - Major shareholders include Hangzhou Weiji Electronic Technology Partnership and others, with the largest shareholder holding approximately 27.5% of the company [2][5]. Compensation and Expenses - In 2023, the total compensation paid to directors was approximately RMB 118.2 million, with significant portions attributed to share-based payment expenses [8][10].