IPO Preview | After the valuation has increased 6.4 times in two and a half years, how much space does Weizhao Semiconductor still leave for the secondary market?

As an important branch of the semiconductor industry, power semiconductor devices have also entered the stage of domestic substitution since 2018. Especially with the support of government industrial policies, the explosion of the new energy vehicle market has generated strong demand for electronic control systems, driving local power semiconductor device manufacturers to accelerate their entry into the new energy industry chain. At the same time, the rapid rise of third-generation semiconductor technologies represented by silicon carbide (SiC) and gallium nitride (GaN) is pushing the Chinese power semiconductor industry towards higher efficiency applications. With several local power semiconductor device companies successfully going public, the industry is accelerating its transformation towards high-end products, transitioning from traditional products such as diodes and thyristors to high value-added areas. Among the companies riding the wave of power device IPO trends is Shenzhen Weizhao Semiconductor Co., Ltd. (hereinafter referred to as "Weizhao Semiconductor"), which aims to become a global leader. After delisting from the New Third Board in 2020, after nearly five years of preparation and accumulation, Weizhao Semiconductor submitted its application for listing on the main board of the Hong Kong Stock Exchange on January 12, with GF SEC as its sponsor, officially embarking on a new journey to the Hong Kong market. Six financings in two and a half years, backing from well-known industry capital and state-owned assets The development history of Weizhao Semiconductor can be traced back to December 4, 2012. After delisting from the New Third Board on April 17, 2020, Weizhao Semiconductor began to accelerate its capitalization process in preparation for relisting, which rapidly increased the company's valuation. According to the prospectus, during the period from May 14, 2020, to December 18, 2022, Weizhao Semiconductor completed a total of six financings, including Pre-A, A, A+, B, and C rounds, as well as cross-rounds, with an average of one financing round every six months. The post-investment valuation of Weizhao Semiconductor increased rapidly from 450 million RMB to 2.888 billion RMB, a 6.4-fold increase in the span of two and a half years. After six rounds of financing in two and a half years, the shareholder structure of Weizhao Semiconductor has formed a composite structure of "industry capital binding + state-owned capital support + professional financial capital support." Industry capital includes OPPO, Intel Asia Pacific, Xiaomi from Hubei, Ning New Energy, Huaqin Technology (through Moqin Intelligent Holdings), with current shareholdings of 5.05%, 3.9%, 1.41%, 1.33%, and 2.12%, respectively. State-owned capital includes Fenhu Qinhe Venture Capital, Yancheng Venture Capital, Anpeng Zhida, Fenglin Venture Capital, and Fengyuan Venture Capital, with current shareholdings of 3.28%, 2.63%, 2.22%, 2.47%. In addition, Weizhao Semiconductor has also introduced leading investment institutions focused on semiconductors such as Element Venture, Kunshan Semiconductor, with shareholdings of 2.77% and 1.33%, respectively. The support of shareholders with different backgrounds is a solid endorsement of Weizhao Semiconductor's future development. So what sets Weizhao Semiconductor apart? Fab-lite operational model enhances competitiveness, with sustained and stable growth in performance According to the prospectus, Weizhao Semiconductor has built a rich product matrix covering both low-voltage and high-voltage products. The low-voltage products include Trench MOSFET and SGT MOSFET, which can be widely used in consumer electronics, automotive electronics, motor drives, industrial power supplies, and other fields. High-voltage products mainly include IGBT, SJ MOSFET, and Planar MOSFET, which are widely used in automotive electronics, motor drives, and new energy applications. In addition to building a rich product matrix, Weizhao Semiconductor strategically laid out WLCSP technology. As an advanced packaging technology, WLCSP features compact size, excellent electrical performance, excellent market heat dissipation capability, and can be widely used in high-performance application fields such as smart cabins and smart wearable devices. According to Zhuo Shi Consulting, Weizhao Semiconductor is one of the first manufacturers in China to launch internationally competitive WLCSP MOSFET products. As of September 30, 2025, Weizhao Semiconductor has built a WLCSP product matrix consisting of more than 30 products, widely used in mobile phones, tablets, smart wearable devices, VR glasses, mobile power supplies, and other end products. The company's continuous iteration of product performance shows that the second-generation WLCSP MOSFET products have reduced chip size by about 27%, reduced Rsp by about 27%, and significantly reduced device static losses compared to the first generation, given the revenue in 2024, Weizhao Semiconductor ranks first among Chinese local suppliers of WLCSP MOSFET products. It is worth noting that Weizhao Semiconductor adopts the Fab-lite operational model, which is significantly different from the traditional Fabless (no wafer factory) model and IDM model. In this model, Weizhao Semiconductor entrusts standardized wafer manufacturing and packaging testing processes to third parties to reduce operating costs, while selectively retaining internal control of specific high-value wafer manufacturing processes (such as plating, wafer probing testing, thinning, and back gold) to meet the demand for precise quality and flexible customization, further enhancing the profit level of core products. In terms of financial performance, Weizhao Semiconductor has achieved stable growth. In 2023 and 2024, Weizhao Semiconductor's revenue was 575 million and 624 million RMB respectively, with net profits of 13.977 million and 19.353 million RMB, showing a double increase in revenue and profits. By the first three quarters of 2025, Weizhao Semiconductor's revenue was approximately 615 million RMB, a year-on-year increase of 46.8%, with a net profit of 40.254 million RMB, a year-on-year increase of 865.4%. Specifically, the continuous and stable growth of revenue is mainly due to the drive of low-voltage power semiconductor device products, especially the rapid scale-up of WLCSP products has become a key support for revenue growth. The proportion of this product in total revenue has increased from 28% in 2023 to 42% in the first three quarters of 2025. The accelerated growth of Weizhao Semiconductor's performance in the first three quarters of 2025 is mainly due to the simultaneous ramp-up of WLCSP products and non-WLCSP products, driving accelerated revenue growth, coupled with a significant increase in gross profit margin of WLCSP products, which has increased the overall gross margin from 15.9% to 23.8% during the period and significantly boosted net profit. Relatively low R&D expenditure, High-voltage products yet to make a breakthrough While the continuous increase in the proportion of WLCSP products, the adoption of the fab-lite operational model, and the sustained and stable growth in performance are all significant highlights of Weizhao Semiconductor, the company also faces numerous potential operational risks and challenges, as explicitly stated in its IPO prospectus. Currently, foreign companies still dominate the power semiconductor device industry in China. In 2024, the domestication rate of China's power semiconductor device market was only around 35.6%, indicating a significant room for improvement in domestication. However, from the overall competitive landscape perspective, this is a market with relatively high concentration, but still fierce competition. Data shows that in 2024, the top ten market participants in China's power semiconductor device industry accounted for around 55.8% of the market share based on sales. The leading companies have been in the market for a long time, have first-mover advantages, and have formed diversified product matrices covering various power semiconductor products such as silicon, silicon carbide, and gallium nitride. In terms of revenue in 2024, Weizhao Semiconductor ranked sixth among non-IDM suppliers of China's top ten domestic power semiconductor devices, with a market share of 0.5%. The total market share of the top ten players was only 6.5%. These figures indicate the fierce competition among non-IDM suppliers. Weizhao Semiconductor must face international giants such as Infineon Technologies, STMicroelectronics, ON Semiconductor, and Toshiba, as well as competition from domestic counterparts like China Resources Microelectronics (688396.SH), Hangzhou Silan Microelectronics (600460.SH), Wuxi Nce Power (605111.SH), Suzhou Oriental Semiconductor (688261.SH), Yangzhou Yangjie Electronic Technology (300373.SZ), and StarPower Semiconductor (603290.SH), especially in the consumer electronics and industrial low-voltage MOSFET markets, price wars and customer acquisition are the norm. It is worth noting that the gross margin of Weizhao Semiconductor's WLCSP products decreased from 20.4% in 2023 to 18.6% in 2024, a decrease of nearly 2 percentage points. This was due to competitive pricing adopted by Weizhao Semiconductor in the fierce market competition to maintain the company's market share. Therefore, the change in the company's gross margin in the future will be a key indicator reflecting the level of market competition. Meanwhile, Weizhao Semiconductor's relatively low level of research and development may hinder the construction of long-term core competitiveness. The rapid evolution of power semiconductor (especially MOSFET and IGBT) technologies, and the accelerating penetration of third-generation semiconductors (SiC and GaN), may weaken the company's product competitiveness if research and development cannot keep pace with technological iterations. In 2023, 2024, and the first three quarters of 2025, Weizhao Semiconductor's research and development expenses accounted for only 6.6%, 7.6%, 6.7% of total revenue, placing the company's research and development spending at a relatively low level compared to its competitors. Moreover, Weizhao Semiconductor has yet to make a significant breakthrough in the field of high-voltage power semiconductor devices. For small and medium-sized enterprises like Weizhao Semiconductor, the development path often starts in the consumer electronics field of low and medium voltage (such as smartphones and computers) to stabilize their foothold through design capabilities and cost control, accumulate technology and funds, then enter the high-voltage/high-power industrial and automotive fields to seek higher added value and more solid competitive barriers. However, as of the first three quarters of 2025, the proportion of high-voltage product revenue in Weizhao Semiconductor's total revenue is still less than 2%, indicating its weakness in the high-voltage product field. Whether the company can establish high-voltage products as a new growth curve will to a certain extent affect Weizhao Semiconductor's future valuation in the capital market.