New stocks outlook | Three major advantages "assisting", can Ingenic Semiconductor, with annual revenue of 40-50 billion yuan, have a chance to write the "A + H" story?

"A+H" camp will once again welcome a "general". On September 15, the leading chip company Ingenic Semiconductor (300223.SZ) officially submitted its prospectus to the Hong Kong Stock Exchange, planning to list on the main board in Hong Kong, with GUOTAI JUNAN I as the sole sponsor. The company is a global leading provider of "compute + store + analog" chips, offering high-performance low-power compute chips, high-quality high-reliability storage chips, and a variety of high-spec analog chips for markets such as automotive electronics, industrial medical, AIoT, and intelligent security. According to Frost & Sullivan data, as of 2024 revenue calculations: in the niche DRAM sector, the company ranks sixth globally, first among companies in mainland China, and fourth among global automotive-grade DRAM suppliers; in the SRAM sector, the company ranks second globally, first among companies in mainland China, and first among global automotive-grade SRAM suppliers; in the NOR Flash sector, the company ranks seventh globally, third among companies in mainland China; and in the IP-Cam SoC sector, the company ranks third globally and first among global battery-powered IP-Cam SoC suppliers. In 2011, Ingenic Semiconductor successfully listed on the GEM board, becoming the "first share of embedded CPU", with a total market value of 39.424 billion yuan as of the close on September 19. What kind of value story will the company write again in the Hong Kong stock market this time? Revenue of 4-5 billion yuan per year, performance susceptible to cyclical fluctuations According to GMTEight, Ingenic Semiconductor's operating model mainly adopts a fabless model, focusing on chip R&D and design, while cooperating with leading wafer foundries and assembly and testing companies to ensure excellent manufacturing levels and business scalability. The company can provide integrated full-system solutions combining chips, hardware, software, tool chains, and algorithms to serve various application scenarios. Looking at the product structure, Ingenic Semiconductor's product portfolio covers three main product lines: compute chips, storage chips, and analog chips. Among them, high-performance low-power compute chips are used in AIoT and intelligent security; high-quality high-reliability storage chips (including DRAM, SRAM, NOR Flash, and NAND Flash) are primarily used in automotive electronics and industrial medical sectors; and a variety of high-spec analog chips, including LED driver chips and Combo chips, are used in automotive electronics, industrial, and smart home appliances. As of the first half of 2025, the company's storage chip revenue accounted for 61.6% of its main revenue source, while compute chip and analog chip revenue accounted for 26.9% and 10.8%, respectively. It should be noted that due to the cyclical nature of the industry in which Ingenic Semiconductor operates, and experiencing a downturn, it can be seen that the company's overall performance has been declining over the past three years. According to the prospectus data, from 2022 to 2024, the company achieved revenues of approximately 5.412 billion yuan, 4.531 billion yuan, and 4.213 billion yuan, respectively, showing a year-on-year decrease; as of the first half of 2025, the company achieved revenue of 2.249 billion yuan, a 6.7% decrease compared to the same period in 2024. Net profit has followed a similar trend. From 2022 to 2024, Ingenic Semiconductor achieved net profits of approximately 779 million yuan, 516 million yuan, and 364 million yuan, respectively, decreasing year by year. However, fortunately, by the first half of 2025, the company's net profit increased again, recording 202 million yuan, compared to 197 million yuan in the same period in 2024. In terms of profitability, although showing fluctuations, the company has maintained a relatively high level. From 2022 to the first half of 2025, the company's gross profit margin was approximately 33.42%, 35.49%, 34.97%, and 34.22% respectively; while its net profit margin was approximately 14.39%, 11.38%, 8.65%, and 8.97% respectively. According to Frost & Sullivan data, the semiconductor industry entered a downturn in 2022 and continued until the first quarter of 2024. Despite the continued existence of potential demand for semiconductor products, this period was characterized by inventory backlog, ongoing pricing pressure, and weakened consumer confidence. Throughout the downturn, competition significantly intensified, with many industry participants lowering prices to maintain or expand their market share. This resulted in a significant decrease in the average selling prices of multiple types of chip products, leading to a decline in company performance. From the second quarter of 2024, as customers resumed inventory replenishment and end-market demand began to recover, particularly in the consumer electronics sector, the industry began to show more obvious signs of recovery. Therefore, for Ingenic Semiconductor, this could present a significant opportunity for performance recovery. In a sunrise track, three major advantages deeply "assist" It is reported that chip applications cover a wide range of fields such as automotive, industrial, medical, and consumer electronics, serving as the core infrastructure of the entire digital economy. In recent years, with the deep penetration of artificial intelligence technology, the continuous emergence of cloud computing construction demands, and the acceleration of upgrades for terminal intelligent devices, automotive electronics have been driven to expand. These emerging areas are expected to become important growth engines for the chip industry, complementing the demand in existing areas. According to Frost & Sullivan data, from 2020 to 2024, driven by rapid developments in core application areas such as artificial intelligence, automotive electronics, and industrial electronics, the global chip market has significantly expanded. The overall market size increased from approximately $356.2 billion in 2020 to $515.3 billion in 2024, with a compound annual growth rate of 9.7%. Looking ahead, the market is expected to continue expanding, reaching around $900.3 billion by 2029, with a compound annual growth rate of 11.0% from 2025 to 2029. In the global chip industry, logic chips, including compute chips (such as CPUs), control logic chips (such as MCUs), interface logic chips, and programmable logic chips, account for approximately 39.0% of the total market size. As the core foundation for various computing tasks, logic chips are indispensable for applications ranging from AI large model training to efficient operation in data centers. Storage chips account for approximately 32.0% of the total market size, used for data storage and retrieval. With the explosive growth of data, the demand for storage chips remains strong, whether in cloud storage infrastructure or terminal device storage, driving robust demand for storage chips. Logic chips and storage chips jointly drive the progress of the global chip industry. In this development trend, Ingenic Semiconductor's three major advantages are expected to help the company further capture industry development dividends. Firstly, the dual-drive business pattern of "processor + storage chip" provides sufficient growth momentum. It is understood that in terms of processor chips (CPUs), Ingenic Semiconductor originated from the independent innovation of the MIPS architecture embedded CPU, holding a leading position in technology domestically. Its chips are widely used in IoT devices, smart homes, smart wearables, biometric recognition, industrial control, and other fields, with a strong customer base and reputation in the market. On storage chips, through the successful acquisition of the US-based ISSI (Chengdu Halves Semiconductor), the company has become a global leading supplier of automotive storage chips. ISSI has core technologies and market share in vehicle-grade storage chips such as SRAM, DRAM, Nor Flash etc. This acquisition significantly increased the company's revenue volume, profitability, and global competitiveness. Secondly, the deep layout in automotive electronics positions the company to benefit from long-term trends. Specifically, the "new four transformations" in the automotive industry (electrification, intelligence, networking, and sharing) have led to an explosive growth in the demand for storage chips. Intelligent cockpits, advanced driver assistance systems (ADAS), in-car infotainment systems, and many other applications require a large number of high-performance, high-reliability storage chips. Through ISSI, Ingenic Semiconductor has established a presence in the global mainstream automotive supply chain, serving numerous well-known Tier-1 suppliers and OEMs. The automotive business has become the company's most stable and potentially revenue-generating source, providing strong anti-cyclical capabilities. Furthermore, the independent innovation in CPU technology strengthens Ingenic Semiconductor's technological barriers. The company has long been committed to independent development of CPU cores and AI engines (NPU), possessing a fully proprietary instruction set architecture. Its products in the AIoT field have unique advantages in video coding/decoding, power control, and other aspects, aligning with the national strategy of independent controllability. Overall, it is not difficult to see that with its current positioning on the sunrise track and multiple advantages, Ingenic Semiconductor's Hong Kong listing seems to have strong long-term investment value. However, as it operates in the high-tech, cyclical semiconductor industry, investors must be aware that investment risks and opportunities coexist.