Lifting of restricted share lock-up may create a valuation trough, and GPIXEL (03277) with accelerating earnings growth may present a good layout opportunity.

After hitting a low of HK$60.6 on October 9, GPIXEL (03277) is approaching its lowest point of HK$57.05, a stark contrast to the company's stellar performance at the time of its listing. On April 17, 2026, GPIXEL (03277) successfully listed on the Hong Kong stock market at HK$39.88 per share. It posted an impressive gain of 75.53% on its first trading day, and its share price then fluctuated upward, reaching an all-time high of HK$116.642 on May 26, one month later, up 192.48% from the offer pricenearly triplingwith its total market capitalization once approaching HK$52 billion. But since then, GPIXEL's share price has continued to fluctuate downward over two months, hitting an all-time low of HK$57.05 on July 29, a drawdown of more than 51% from the high and a sharp retreat in its gain from the offer price to 43.05%. After falling to its all-time low, GPIXEL rebounded for more than a month, with the share price slowly rising to HK$96. But since September 7, GPIXEL has once again entered a downward drift, hitting a low of HK$60.60 on October 9, less than 6% away from its all-time low of HK$57.05, with its total market capitalization having fallen back to around HK$28 billion. GPIXEL's recent sustained share price weakness may be related to the upcoming lifting of the lock-up on restricted shares. It has been found that on October 17, 32.6452 million restricted shares of GPIXEL will officially have their lock-up lifted, accounting for about 50% of the global offering and 7.3% of the current total share capital of about 445 million shares. The lifting of the lock-up on more than 30 million restricted shares is undoubtedly an important test of GPIXEL's liquidity, but the more critical question is: as the share price continues to weaken with the approaching lifting of the lock-up, could this become a "golden pit" investment opportunity? Six-month market decoded: four attributions for the overshoot and three pressures for the pullback Looking back at GPIXEL's stellar performance of nearly doubling its share price within just over a month after listing, this was the result of multiple factors working together, including "solid results + domestic substitution narrative + market sentiment + obvious thin-float characteristics." From a performance perspective, as "the first Hong Kong-listed high-performance CMOS image sensor company," GPIXEL has achieved sustained rapid growth. According to the prospectus, from 2023 to 2025, the company's revenue was approximately RMB 605 million, RMB 673 million, and RMB 857 million, respectively, with a compound annual revenue growth rate of 19.02%; adjusted net profit over the same period was RMB 222 million, RMB 249 million, and RMB 369 million, respectively, with a compound annual growth rate of 28.84%. This is a solid performance of sustained revenue growth and accelerating profit release. On this basis, GPIXEL's domestic substitution narrative highlights its scarcity. The core of its products lies in differentiated import substitution in the high-end CMOS image sensor field. The company avoids red-ocean consumer markets such as mobile phones and focuses on high-end application scenarios including industrial machine vision, semiconductor inspection, astronomical research, and medical endoscopy. This niche track had long been monopolized by international giants such as Sony, onsemi, and Teledyne, with high technical barriers and supply chain access restrictions. Relying on breakthroughs in core technologies such as global shutter, backside illumination (BSI), and low-noise readout, GPIXEL's product performance is already capable of direct competition with first-tier international manufacturers. At the same time, as a local supplier, it has significant advantages in customized response speed, delivery stability, and localized services. At present, the company has established itself as a leader among domestic industrial and scientific imaging CIS manufacturers, with a global market share firmly in the top three. As downstream equipment manufacturers accelerate domestic verification, the company is gradually achieving stock substitution for overseas competitors and entering the supply chains of overseas professional camera manufacturers. Solid results combined with the certain trend of domestic substitution translated into capital's enthusiasm for GPIXEL, which was clearly reflected during the IPO subscription stage. According to the prospectus, GPIXEL offered a total of 65.2942 million H shares in the IPO (before exercise of the over-allotment option), of which 6.5295 million H shares were offered in the public offering, accounting for about 10%, with 1,138.21 times oversubscription; 58.7647 million H shares were offered in the international placing, accounting for about 90%, with 22.69 times oversubscription. Clearly, GPIXEL won the joint scramble of retail and institutional investors. The obvious thin-float characteristic was the key support for GPIXEL's nearly 2-fold cumulative gain at the beginning of listing. It has been found that GPIXEL's offering of 65.2942 million H shares accounted for about 15% of the company's total share capital of 435 million shares (before exercise of the over-allotment option). However, it is worth noting that 55.56% of the shares in the international placing had been locked up by cornerstone investors, so the number of shares actually tradable after listing was about 32.649 million H shares, accounting for about 7.5% of total share capital (before exercise of the over-allotment option). Based on the offer price of HK$39.88, the market value corresponding to this actually tradable portion was about HK$1.3 billion, which can be regarded as a "typical small-cap recent listing." Driven jointly by the above four factors, GPIXEL closed up more than 70% on its first trading day, and then fluctuated upward over more than a month, with a maximum cumulative gain of nearly 2 times. But after rising to the historical high of HK$116.642, the share price entered a deep correction channel, with a maximum drawdown of more than 50% from the high. Behind this sharp correction was also the resonance of multiple factors. First, after the share price doubled in a short period, the valuation rose to a relatively high level, and value regression became the internal DRIVE of the share price change. Calculated at the highest price of HK$116.642 per share, after the over-allotment option was exercised, the company's total shares rose to about 445 million shares, and its total market capitalization soared to about HK$52 billion, corresponding to a static PE of as high as 128 times for 2025. Second, the listing and circulation of over-allotment shares further amplified market selling pressure. On May 8, the overall coordinator, on behalf of the international underwriters, fully exercised the over-allotment option at HK$39.88 per share, involving 9.7941 million H shares, accounting for 15% of the initial global offering shares. This portion of shares was officially listed for trading on May 13. Compared with the highest secondary market price of more than HK$116, the issue cost price of only HK$39.88 meant that this portion of chips had huge unrealized gains, constituting significant profit-taking pressure. In addition, the approaching lifting of the lock-up on cornerstone restricted shares further suppressed the company's share price performance. Thin-float recent listings naturally have the high-volatility attribute of being "easy to rise and easy to fall": in an upward cycle, marginal funds can easily push the share price to overshoot; once facing a supply shock, the limited absorbing capacity amplifies the destructiveness of selling pressure. The 30 cornerstone investors introduced by GPIXEL this time subscribed for a total of 32.6452 million H shares, accounting for 7.33% of total share capital after the over-allotment, a size not to be underestimated. More critically, these cornerstone investors are mainly financial investment institutions, and their shareholding structure is relatively dispersed. With the share price still showing considerable unrealized gains relative to the offer price, institutions have a strong desire to cash out. This "low-cost, dispersed, financially oriented" chip structure makes the expectation of reduction before the lock-up lifting a "Sword of Damocles" hanging above the share price, continuously suppressing market bullish sentiment. Accelerated outbreak in 2026 H1 results, future growth highly certain From the above detailed review of GPIXEL's share price changes, it is not difficult to find that the sentiment pressure brought by the lifting of the restricted share lock-up has actually been reflected in the share price to some extent, and the negative news has been realized to a certain degree. But if subsequent cornerstone investors cash out their unrealized gains and exit, causing the share price to continue falling, then this may become a good opportunity for long-term investors to build positions in GPIXEL. The logic supporting this conclusion lies in the company's interim financial report showing an accelerated outbreak in the first half of 2026. Data shows that GPIXEL's revenue in the first half of 2026 was RMB 641 million, a year-on-year increase of 78.4%; adjusted net profit was approximately RMB 285 million, a year-on-year increase of 127.2%; and net profit attributable to shareholders was approximately RMB 250 million, a year-on-year increase of 197.2%. Compared with past performance growth rates, whether in revenue or profit, GPIXEL's explosive momentum is already very obvious. Specifically on the revenue side, GPIXEL's total revenue growth was mainly driven by the strong performance of CMOS image sensors. During the reporting period, revenue from this business surged 83.2% year-on-year to RMB 635 million, and its proportion of total revenue rose to 99.1%. Among this, revenue from area scan sensors, line scan sensors, and other components all achieved substantial growth, driven by strong demand from downstream industrial imaging applications such as high-end industrial inspection, lithium battery inspection, and printed circuit board inspection, with sales volume increasing from 26,400 units in the same period of 2025 to 54,800 units. Along with revenue growth, GPIXEL's gross margin rose by more than 6 percentage points from 62.2% in the same period of 2025 to 68.7%, mainly due to the continuous improvement in product structure, with an increased proportion of high-gross-margin products used in high-end inspection fields (including high-end industrial inspection, lithium battery inspection, etc.), which drove gross profit during the period to surge 97.2% to RMB 441 million. On this basis, effective control of the three expenses further amplified profit elasticity. In the first half of 2025, GPIXEL's three expenses accounted for 37.17% of revenue, which fell to 23.82% during the reporting period. The absolute value of the three expenses rose only modestly by 14.3% with business expansion, far below revenue growth, indicating that scale effects significantly diluted the expense ratio. This is the key reason why GPIXEL's profit side significantly outperformed revenue growth. Cash flow and the balance sheet made the interim report quality even more solid. During the reporting period, GPIXEL's net operating cash flow was RMB 325 million, accounting for about 50.7% of revenue; free cash flow was about RMB 261 million; and cash and cash equivalents, restricted funds, and time deposits at period-end totaled about RMB 3.802 billion, with no interest-bearing borrowings. It also had a high proportion of current assets, a current ratio of about 8.46, and an asset-liability ratio of only 13.27%, meaning that the company's subsequent expansion of R&D, construction of centers, and rollout of overseas sales networks basically do not rely on external leverage. Another forward-looking indicator is contract liabilities for customized sensors of RMB 205.9 million. Although customized revenue in the interim report was only RMB 5.8 million, contract liabilities represent customized payments already received/receivable from customers and to be converted into revenue over the next 1-2 years, forming order visibility for professional imaging, scientific instruments, and special industrial projects. Standing at the current point and looking to the future, GPIXEL's sustained rapid growth is expected to continue. First, industrial imaging, as the ballast business with the highest certainty over the next 2-3 years, will benefit from the "machine eye replacement" wave brought by the upgrading of domestic manufacturing precisionextending from the currently most directly scaling high-end industrial inspection, lithium battery inspection, and PCB inspection to factory automation, 3D imaging, and Siasun Robot&Automation vision. At present, the global industrial imaging CIS market is expected to expand at a compound annual growth rate of more than 20%, and GPIXEL ranks third globally with a 15.2% share. It will benefit from the industry's continued development, and as the proportion of products such as high-end large-format area scan, TDI line scan, and global shutter increases, volume growth and structural optimization will simultaneously push up unit prices and gross margins. While the ballast business steadily scales, semiconductor inspection constitutes the "second curve" with the highest gold content and greatest elasticity. GPIXEL has already introduced its GL and GIR series into the semiconductor inspection segment. This field has far higher requirements for CIS pixels, noise, frame rate, and reliability than ordinary industrial scenarios. Although the verification cycle is long, once it enters the equipment supply chain, it forms extremely strong stickiness, and both per-chip value and gross margin rise significantly, making it the most scarce positioning in domestic substitution. From a longer-term perspective, professional imaging, medical imaging, and overseas expansion together form the long-cycle space foundation for GPIXEL. In professional imaging, GPIXEL's announced strategic cooperation with Leica in April 2026under which the two parties will jointly customize high-performance CMOS for the next generation of Leica cameras, covering the entire chain from chip verification and image tuning to mass production preparationmeans that GPIXEL has obtained high-end optical brand endorsement and systematic upgrading of process tuning capabilities, laying the foundation for subsequent replication with other professional imaging customers. In the medical imaging field, the CIS market is expected to grow considerably in the coming years. GPIXEL's GXS series targets scenarios such as disposable medical endoscopes, with high per-unit value and strong customer stickiness. Once it passes verification, it is expected to usher in rapid scaled volume growth. Overseas, revenue in the first half of the year had already reached RMB 130 million, accounting for more than 20%, with products covering more than 30 countries and regions and a direct sales ratio as high as 94.7%. After the IPO, about 10% of proceeds will be used to deepen operating networks in Japan, Belgium, and other places, promoting the transition from "product export" to "localized customer binding," which will accelerate the company's overseas expansion. Given the highly certain growth logic, the share price adjustment brought by the lifting of the restricted share lock-up is essentially a short-term disturbance at the sentiment and trading levels and does not shake the company's long-term value anchor. If GPIXEL's market capitalization subsequently falls significantly below its intrinsic value due to the exit of cornerstone investors, such an oversold condition would instead open a window of substantial excess returns for long-term investors.