EqualOcean learned that on August 7, Huahong Semiconductor Co., Ltd. (hereinafter referred to as "Huahong") officially landed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. The published price was CNY 52 per share, an increase of more than 13% at the opening. The company's market value once exceeded CNY 100 billion. The IPO raised up to CNY 21.203 billion, making it the largest IPO project in the Class A Share market this year.
Founded in Shanghai, China in 1996, Huahong is currently the second largest wafer foundry in the Chinese mainland and the sixth largest in the world. It was listed on the Hong Kong Stock Exchange in 2014. In the course of more than 20 years of development, Huahong has become an important player in China's integrated circuit industry, and is known as one of the "China Semiconductor Double Heroes" in the industry, as well as SMIC. The company's multi-process platform covers a wide range of fields such as embedded /stand-alone non-volatile memory, power devices, analog and power management, logic and RF.
EqualOcean reviewed public information and found that at present, Huahong operates three 8 -inch wafer fabrication plants and a 12-inch wafer fabrication plant. As of the end of 2022, the monthly production capacity of these plants totaled 324,000 pieces, ranking second in mainland Chinese. According to the prospectus, the company's Main Business revenue from 2020 to 2022 was CNY 6.737 billion, CNY 10.63 billion and CNY 16.786 billion, respectively, with a three-year compound growth rate of 58.44%. The parent Net Profit was 505 million yuan, 1.66 billion yuan and 3.01 billion yuan, respectively.
At present, China has achieved certain advantages in some key areas of semiconductors, but high-end areas are still dominated by foreign company. Under the background of increasing uncertainty in the international trade environment, the urgency of localization of semiconductor products has become increasingly prominent. Driven by multiple favorable factors such as policy support, acceleration of local substitution in the integrated circuit field, and technological progress, domestic semiconductor companies will gain huge growth space.
EqualOcean learned that from 2019 to 2022, the sales of China's semiconductor industry will continue to grow. In 2022, the sales reached CNY 1.206 trillion, a year-on-year increase of 14.8%. In Quarter 1 of 2023, the sales of China's semiconductor industry increased by 18.1% year-on-year to CNY 173.93 billion. Major semiconductor companies in Chinese mainland include SMIC, Huahong Semiconductor, Changjiang Storage（长江储存）, Will Semiconductor（韦尔股份）, Sanan Optoelectronics（三安光电） and Gigadevice Semiconductor（兆易创新）, etc., with broad prospects for future development.
Huahong plans to raise CNY18 billion through the IPO proceeds, which will be used for Huahong Manufacturing (Wuxi) project, optimization and upgrading of the 8-inch manufacturing plant, characteristic process technology innovation research and development projects, and supplementary working capital.