Core Viewpoint - Jiangsu Xinde Semiconductor Technology Co., Ltd. (referred to as "Xinde Semiconductor") has submitted a prospectus for an IPO in Hong Kong, but the company has incurred significant losses since its establishment in 2020, totaling approximately 1.4 billion RMB over five years, with a pressing need to achieve profitability [2][3][8]. Financial Performance - Xinde Semiconductor reported revenues of 269.4 million RMB, 509.1 million RMB, 827.4 million RMB, and 474.9 million RMB for the years 2022, 2023, 2024, and the first half of 2025, respectively, while incurring losses of 360.3 million RMB, 358.9 million RMB, 376.6 million RMB, and 218.6 million RMB during the same periods [3][4]. - Cumulative losses over the past three and a half years amount to approximately 1.314 billion RMB, indicating a persistent trend of financial deficits [2][3]. Debt and Liquidity - The company's current assets have consistently been lower than its current liabilities, with a current ratio declining from 0.8 to 0.5, indicating significant short-term debt pressure [4][5]. - Cash and cash equivalents peaked at 186 million RMB but are insufficient to cover interest-bearing borrowings totaling 566 million RMB, leading to an ongoing funding gap [4][5]. Business Model and Revenue Sources - Xinde Semiconductor's revenue is heavily reliant on packaging products and testing services, which accounted for over 99% of total revenue during the reporting periods [6][8]. - Despite being in a rapidly expanding advanced packaging industry, the company has struggled with a "loss-leading" business model, with gross margins remaining negative throughout the reporting periods, reaching as low as -80% in 2022 and -16.4% in the first half of 2025 [6][8]. Industry Context - The global semiconductor packaging and testing market is projected to grow from 495.6 billion RMB in 2020 to 649.4 billion RMB in 2024, with China's market expected to reach 248.1 billion RMB by 2024 [8]. - Advanced packaging technologies are anticipated to become a significant growth area, with the global advanced packaging market expected to increase from 214.1 billion RMB in 2020 to 312.4 billion RMB by 2024 [8].

Core Viewpoint - The article discusses the recent developments of Jiangsu Xinde Semiconductor Technology Co., Ltd., which focuses on semiconductor packaging and testing, and its application for listing on the Hong Kong Stock Exchange amid supportive policies for the semiconductor industry [1][3]. Company Overview - Jiangsu Xinde Semiconductor was founded in September 2020 by Xinlianxin, Nanjing Yuanjun, and Ningtaixin, primarily engaged in semiconductor packaging design, customized packaging products, and testing services [3]. - The company has attracted significant investors, including MediaTek and Lei Jun's Xiaomi Changjiang, with Ningtaixin being the largest shareholder holding 9.49% of the equity [5][3]. Industry Context - The semiconductor industry is crucial in the era of AI, 5G, IoT, and automotive electronics, with packaging technology becoming a key area for innovation as Moore's Law slows down [6]. - Advanced packaging techniques are essential for maintaining performance and reliability in smaller, high-density semiconductor products, with high entry barriers due to equipment costs and the need for skilled talent [6]. Financial Performance - In the first half of 2025, Xinde Semiconductor's revenue reached 475 million yuan, a 22% increase year-on-year, driven by QFN and BGA packaging products, which accounted for 31% and 31.8% of revenue, respectively [7]. - Despite revenue growth, the company reported a loss of 207 million yuan in the same period due to high sales costs, primarily from material expenses, although adjusted EBITDA showed improvement [8]. Market Outlook - The global semiconductor packaging and testing market is projected to grow from 495.6 billion yuan in 2020 to 649.4 billion yuan in 2024, with a compound annual growth rate of 7%, and expected to reach 933 billion yuan by 2029 [8]. - The company faces seasonal sales fluctuations influenced by the consumer electronics sector, particularly around holidays [8]. Investment Considerations - The semiconductor sector is benefiting from national policies and domestic substitution demand, with companies like SMIC and Hua Hong Semiconductor showing strong performance [9]. - However, Xinde Semiconductor's revenue growth is slowing, with increases of 89%, 62.5%, and 22.1% expected for 2023, 2024, and the first half of 2025, respectively, and the company has yet to achieve profitability [9].

Core Viewpoint - The semiconductor sector in the Hong Kong stock market has experienced significant growth this year, with companies like Huahong Semiconductor and Shanghai Fudan seeing substantial stock price increases [1][2]. Group 1: Market Performance - The semiconductor sector in Hong Kong has seen a surge, with Huahong Semiconductor (01347.HK) rising over 260%, and Shanghai Fudan (01385.HK), InnoCare (02577.HK), and SMIC (00981.HK) also increasing by more than 130% [1]. - More semiconductor companies are entering the Hong Kong market, with Jiangsu Xinde Semiconductor Technology Co., Ltd. recently submitting its prospectus for a mainboard listing [2]. Group 2: Company Overview - Jiangsu Xinde Semiconductor focuses on advanced packaging technology and has accumulated extensive experience since its establishment in September 2020, covering various packaging types such as QFN, BGA, LGA, WLP, and 2.5D/3D [3][4]. - The company has established a comprehensive technology platform for advanced packaging, known as CAPiC, to continuously develop cutting-edge technologies [4]. Group 3: Client Base and Investments - Xinde Semiconductor has built a diverse client base in key chip areas, including major companies like MediaTek, Amlogic, and Broadcom [4]. - The company has received investments from various sources, including local state-owned assets and well-known institutions, with notable shareholders including Xiaomi and OPPO [4]. Group 4: Financial Performance - Xinde Semiconductor has reported continuous losses, with revenues projected to be RMB 269 million in 2022, increasing to RMB 475 million in the first half of 2025, while losses are expected to remain significant [5][6]. - The adjusted net losses for the same period are projected to decrease from RMB 301 million in 2022 to RMB 111 million in the first half of 2025 [5][6]. Group 5: Revenue Structure and Risks - The revenue structure is relatively balanced among different product lines, with QFN, BGA, LGA, and WLP contributing 31.0%, 31.8%, 20.1%, and 16.9% respectively in the first half of 2025 [6]. - The company relies heavily on a few major clients, with the top five clients accounting for approximately 60.5% of total revenue in 2022 [7][8]. Group 6: Financing and Future Plans - Xinde Semiconductor has seen an increase in financing costs, with bank borrowings rising from RMB 384 million in 2022 to RMB 824 million in the first half of 2025 [9]. - The company plans to use the funds raised from its IPO for building production facilities, enhancing R&D capabilities, and expanding its customer collaboration ecosystem [9].

Core Viewpoint - Jiangsu Xinde Semiconductor Technology Co., Ltd. (hereinafter referred to as Xinde Semiconductor) has submitted its IPO application to the Hong Kong Stock Exchange, with Huatai International as the sole sponsor. The company aims to use the funds raised for building production bases, enhancing R&D capabilities, and expanding its customer ecosystem, despite facing continuous losses exceeding 1.3 billion yuan from 2022 to mid-2025 [1][4]. Group 1: Company Overview - Xinde Semiconductor is a semiconductor packaging and testing technology solution provider, focusing on developing packaging designs and providing customized packaging products and testing services [2]. - Since its establishment in September 2020, the company has accumulated significant experience in advanced packaging technology and has production capabilities for various packaging types, including QFN, BGA, LGA, WLP, and 2.5D/3D [2][3]. - The company's revenue primarily comes from packaging and testing services, with domestic sales accounting for over 93% of total revenue during the reporting period [2]. Group 2: Financial Performance - Xinde Semiconductor reported revenues of 269 million yuan, 509 million yuan, 827 million yuan, and 475 million yuan for the years 2022, 2023, 2024, and the first half of 2025, respectively, while incurring losses of approximately 360 million yuan, 359 million yuan, 377 million yuan, and 219 million yuan during the same periods [4]. - The company has been in a state of "net negative assets" throughout the reporting period, with total assets of 2.167 billion yuan, 2.836 billion yuan, 3.222 billion yuan, and 3.579 billion yuan, against total liabilities of 2.51 billion yuan, 3.586 billion yuan, 4.137 billion yuan, and 4.530 billion yuan [5][6]. - The net asset deficit has been increasing, with figures of -343 million yuan, -750 million yuan, -916 million yuan, and -950 million yuan reported [6]. Group 3: Shareholder Activity - Prior to the IPO application, several shareholders of Xinde Semiconductor engaged in share transfers, collectively cashing out over 77 million yuan in the months leading up to the filing [7].