New stock analysis | After two rounds of submission, will the listing of SG Micro Corp on the Hong Kong stock market alleviate supply chain concerns?

In the current context of deep adjustment in the global semiconductor industry and the sweeping wave of AI and automotive electrification, the ability of Chinese semiconductor enterprises to innovate independently and globalize is facing an unprecedented test. As a leading company in the field of analog chips in China, SG Micro Corp (300661.SZ) is now looking towards the international capital stage after its listing on the ChiNext of the Shenzhen Stock Exchange in 2017. According to the Hong Kong Stock Exchange on June 4, after submitting applications twice, SG Micro Corp has successfully passed the hearing for listing on the main board of the Hong Kong Stock Exchange, with CICC and Huatai International as joint sponsors. What are the highlights of SG Micro Corp in this capital market adventure? Resilient growth in terms of revenue structure SG Micro Corp's core business focuses on the design, development, and sales of analog integrated circuits, with products mainly covering the signal chain and power management fields, supplemented by sensor products. By the end of 2025, the company had over 6,800 products covering 38 product categories. This extremely broad product portfolio constitutes its core competitive advantage, enabling it to serve multiple end markets such as industrial and energy, automotive electronics, networking and computing, and consumer electronics. Financial performance is a key dimension for assessing a company's competitiveness. Over the past three years, SG Micro Corp has shown a steady growth curve in performance. Data shows that the company's total revenue increased from 26.16 billion yuan in 2023 to 38.98 billion yuan in 2025, with a compound annual growth rate of 22.1%. Particularly noteworthy is that after being impacted by the downward cycle of the global semiconductor industry in 2023, the company's revenue rebounded quickly by 28.0% in 2024 and maintained a growth of 16.5% in 2025, demonstrating its strong recovery resilience. In terms of revenue composition, power management integrated circuits contributed the majority of the company's revenue, but the growth momentum of signal chain integrated circuits is more significant. From 2023 to 2025, the proportion of revenue from power management ICs gradually decreased from 66.8% to 61.1%, while the proportion of revenue from signal chain ICs increased from 33.0% to 37.7% during the same period. This structural change reflects the company's positive progress in the high-technology barrier signal processing field, with the market acceptance of products such as amplifiers, analog-to-digital converters, etc., on the rise, helping to optimize the overall profit structure. The profit performance is also commendable, with adjusted net profit increasing significantly from 3.89 billion yuan to 6.93 billion yuan during the same period. In terms of profitability, the company's gross profit margin fluctuated within the range of 44.9% to 47.2%, recording 46.2% in 2025, maintaining at a relatively high level. This level is competitive in the chip design industry, mainly benefiting from the continuous introduction of high-performance new products and the contribution of signal chain ICs. However, it is important to note that the company has made huge investments in research and development, with R&D expenses reaching 1.045 billion yuan in 2025, accounting for a high proportion of total revenue at 26.8%. While high R&D investment is a necessary condition for semiconductor design companies to maintain technological leadership, it also puts pressure on short-term net profit margins. In addition, the company's inventory turnover days increased from 203 days in 2023 to 228 days in 2025, reflecting a strategy of actively increasing inventory in response to market demand growth. However, if future demand falls short of expectations, the higher inventory levels may pose impairment risks. Looking at the latest operational trends, the company's revenue in the first quarter of 2026 increased by 39.1% year-on-year to 1.098 billion yuan, and net profit increased by 109.3% year-on-year to 123 million yuan, showing a good growth momentum, but quarterly data is not enough to change the assessment of the annual trend. Balancing between opportunities and dependencies From an industry perspective, SG Micro Corp occupies a broad track with a dispersed competitive landscape. According to Frost & Sullivan data, the size of the Chinese analog integrated circuit market is expected to reach 389.4 billion yuan by 2030, with a compound annual growth rate of 12.2%. In this market, SG Micro Corp has established a leading position domestically, especially in the amplifier, comparator in the signal chain field, and LDO and AMOLED power chip markets in the power management field, ranking first among Chinese manufacturers. However, the global market is still dominated by international giants such as Texas Instruments and Analog Devices, with the top eight manufacturers collectively holding a market share of 37.3%, while SG Micro Corp, as the largest domestic manufacturer in China, has a market share of 1.8%. This not only indicates a significant space for domestic substitution but also reveals the gap with international leading enterprises in terms of brand, product breadth, and process accumulation. The company is narrowing this gap by expanding into high-end applications such as automotive and server power management, and currently has nearly 500 mass-produced automotive-grade chips. In addition, the following risks are also worth noting. One is the high dependence on the supply chain. As a fabless (without a wafer fab) chip design company, SG Micro Corp outsources wafer manufacturing, packaging, and testing. In 2025, the company's top five suppliers accounted for 91.0% of total purchases, with the largest supplier accounting for nearly 40%. While such concentration is common in the industry, in the geopolitically complex and capacity-tight semiconductor industry, any production interruptions or deteriorating cooperation with a major supplier could pose a direct threat to the company's product deliveries. In the current global environment of structural semiconductor production capacity tightness, ensuring the autonomy, controllability, and diversification of the supply chain is a top priority for SG Micro Corp. Furthermore, the analog chip industry has significant cyclical characteristics and is closely related to macroeconomic and consumer electronics demand. The industry downturn in 2023 led to a decline in the company's revenue, and although it later recovered, uncertainties in the pace of global economic recovery, inflation, and local trade frictions may suppress end-demand. Looking at this prospectus of SG Micro Corp, we see a typical portrait of a Chinese technology company in its growth stage: it has core technology, occupies a favorable market track, and has delivered excellent performance growth in the past few years. Especially in the first quarter of 2026, the company achieved astonishing increases of 39.1% in revenue and 109.3% in net profit, demonstrating strong operational resilience. Seeking a listing on the Hong Kong stock market, the company intends to accelerate its globalization strategy by introducing international capital, which is undoubtedly a wise and necessary step. However, the development path of SG Micro Corp is not a smooth one, and it is currently at a crucial crossroads. It needs to overcome the technological barriers in the high-end signal chain and automotive electronics fields to narrow the gap with international giants while embracing globalization and resisting the potential risks of a highly concentrated supply chain. Investors, while paying for its technological strength and market position, must also acknowledge that this is not just a capital feast but a long test of technology, management, and strategic resilience.