New Stock Outlook | Annual revenue of nearly 6 billion yuan, Pegging the "Golden" track, Can Jingchen Semiconductor's impact on the "A+H" market be expected?

The "A+H" camp is expected to add another "brave general". According to Hong Kong Stock Exchange, on September 25th, Jincheng Semiconductor (Shanghai) Co., Ltd. (hereinafter referred to as "Jincheng Semiconductor") formally submitted its listing application to the Hong Kong Stock Exchange Main Board, with CICC and HAITONG INT'L as joint sponsors. The company was established in 2003, with a business history dating back to 1995. Today, Jincheng Semiconductor has become a globally deployed, world-leading system-level semiconductor system design company. According to a Frost & Sullivan report, based on the relevant revenue calculation for 2024, Jincheng Semiconductor ranks fourth globally among manufacturers focusing on intelligent terminal SoC chips, first in China and second globally in the field of home intelligent terminal SoC chips. On March 22, 2019, Jincheng Semiconductor was accepted as the "001" enterprise for listing on the Sci-Tech Innovation Board, attracting significant market attention. On August 8 of the same year, Jincheng debuted on the board at 38.5 yuan per share, soaring to 149 yuan at the opening, a 287% increase from the issue price. As of the closing on September 29, its share price stood at 105.49 yuan, with a total market value of 44.422 billion yuan. As the first "star examinee" among the enterprises accepted on the Sci-Tech Innovation Board, Jincheng Semiconductor's path to listing on the board has clearly been highly anticipated. So, what investment story will the company write on the Hong Kong stock market this time? Steady revenue growth, with cumulative chip shipments exceeding 1 billion According to GMTEight, Jincheng Semiconductor is a fabless semiconductor company, mainly focusing on intelligent multimedia and display SoCs, AIoT SoCs, communication and connectivity chips, and smart car SoCs. The company engages third-party suppliers for product manufacturing, testing, packaging, distribution, and some research and development. The company's core products are mainly used in various application scenarios, including smart homes, commercial education, smart cars, and personal mobile devices. Its business footprint spans the globe, covering China, Hong Kong, North America, Europe, Latin America, Asia-Pacific, and Africa. During the reporting period, Jincheng Semiconductor mainly provided SoCs to global telecom operators, leading TV brand manufacturers (such as Xiaomi, Skyworth, TCL, Hisense, Haier, and Xiaomi), and a wide range of AIoT brand manufacturers. With a strong business network and leading market position, Jincheng Semiconductor's business scale is gradually expanding, and overall performance is in a growth phase. According to the prospectus data, in 2024, every three smart set-top boxes in the world are equipped with a Jincheng Semiconductor smart set-top box chip, and every five smart TVs are equipped with a Jincheng Semiconductor smart TV chip. At the same time, the company's business covers more than 250 mainstream operators worldwide, 14 of the top 20 global TV brands, as well as numerous AIoT and automotive manufacturers, making it the "brain" for hundreds of millions of screens in over 100 countries and regions. As of June 30, 2025, Jincheng Semiconductor's cumulative chip shipments exceeded 1 billion. Reflected in financial data, this translates into revenue and profit growth. From 2022 to 2024, the company achieved revenues of 5.545 billion yuan, 5.371 billion yuan, and 5.926 billion yuan, demonstrating a fluctuating growth trend; and net profits of 732 million yuan, 500 million yuan, and 819 million yuan, also showing an upward trend. In the first half of 2025, the company achieved revenues of 3.33 billion yuan, a year-on-year increase of 11%, and a net profit of 493 million yuan, a year-on-year increase of 36.2%. Furthermore, Jincheng Semiconductor's gross margin has also significantly improved through product structure optimization and cost control, the company's gross margin has steadily increased from over 20% in the early years to around 35% in recent years, reflecting the enhancement of its product competitiveness and pricing ability. By the first half of 2025, the company's gross margin further increased to 37.5%. Looking at the revenue structure, Jincheng Semiconductor has successfully diversified its business away from reliance on a single product, forming a diverse business portfolio, all of which are in high-growth sectors. The company's main products include intelligent multimedia and display SoC master control chips, AIoT SoC master control chips, communication and connectivity chips, and smart car SoC master control chips. Among these, smart set-top box chips are the company's traditional strength, leading in the global market share, with a solid business foundation providing stable cash flow. Smart TV chips have seen rapid growth and have become an important source of revenue. AI audio and video system terminal chips are expected to be the company's biggest growth engine and future focus, with product lines widely utilized in emerging AIoT fields such as smart homes (smart speakers, smart security cameras), smart offices (video conferencing systems), and in-vehicle entertainment systems. With the widespread adoption of artificial intelligence and the Internet of Things, this segment of the business holds the greatest growth potential and market space. By the first half of 2025, Jincheng Semiconductor's revenue from intelligent multimedia and display SoCs was 2.36 billion yuan, accounting for 70.9% of revenue; revenue from AIoT SoCs was 890 million yuan, accounting for 26.7% of revenue. Communication and connectivity chips accounted for 79 million yuan, or 2.4% of revenue. With a dominant market position and a diversified business structure, Jincheng Semiconductor's overall performance is quite impressive, with its three main product lines forming a solid growth "iron triangle", offering imaginative expansion opportunities in the fields of AIoT and automotive electronics. Seizing the "golden" track, opportunities and challenges coexist With the establishment of 4G, 5G, and the upcoming 6G creating an "internet of everything", AI algorithms providing "thinking capabilities" to everything, edge computing pushing artificial intelligence to the periphery of various scenarios, as well as the deepening of industrial digital transformation and the strong desire for smart living on the consumer end, the wave of intelligent interconnectivity is here. Smart terminal devices, serving as the "neural endpoints" connecting the physical world and the digital space, are constructing the underlying infrastructure of the intelligent era on a billion-scale. SoC chips, as the "brains" of smart terminal devices, support the "digital base" of the intelligent era. In this wave, the consumer electronics sector has already experienced disruptive changes and explosive innovation and growth opportunities. Specifically, the track where Jincheng Semiconductor operates is not a single market but rather a composite high-growth track driven by the three major trends of digitalizing homes, making everything smart, and electrifying automotive electronics. The total market size is estimated to be in the billions of dollars, with rapid technological iterations continuously creating new demands. In terms of smart home applications, according to a Frost & Sullivan report, the global smart home SoC market is expected to grow from $3.8 billion in 2024 to $7.7 billion in 2029, with a compound annual growth rate of 15.2%. In particular, the smart home AI SoC market is forecasted to grow from $500 million in 2024 to $6 billion in 2029, with a high compound annual growth rate of 64.4%. In terms of smart automotive applications, the global smart car SoC market is projected to expand from $11.3 billion in 2024 to $39.2 billion in 2029, with a compound annual growth rate of 28.2%. Specifically, the smart cockpit and infotainment SoC market is expected to grow from $4.2 billion in 2024 to $14.3 billion in 2029, with a compound annual growth rate of 27.6%. Regarding communication and connectivity chip applications, as the Internet of Things extends into consumer, commercial, and industrial applications, Wi-Fi chips, due to their widespread compatibility and mature ecosystem, have become important infrastructure to support IoT applications, significantly driving market demand expansion. According to a Frost & Sullivan report, the global Wi-Fi chip market size is estimated to grow from $18.9 billion in 2024 to $28.1 billion in 2029, with a compound annual growth rate of 8.3%. It can be seen that Jincheng Semiconductor operates in a huge and dynamic golden track, and its own diversified layout, technical strength, and customer ecosystem are strong competitive advantages, enabling it to seize industry development dividends. However, in reality, Jincheng Semiconductor is navigating in a fiercely competitive and rapidly evolving "red ocean". On one hand, the company faces fierce competition from industry giants: internationally, it needs to compete directly with international semiconductor giants such as MediaTek, Qualcomm, Broadcom, who have stronger capital, broader product lines, and stronger brand influence. Domestically, it faces competition from domestic peers such as Rockchip Electronics, Allwinner Technology, Ingenic Semiconductor, particularly in the price-sensitive mid-to-low-end markets. On the other hand, the company is highly dependent on advanced processes and external foundries: as a fabless design company, Jincheng's production relies entirely on third-party wafer foundries such as TSMC. When industry capacity is tight, it could face pressure in guaranteeing production capacity and rising costs. Pursuing advanced processes (such as 6nm, 5nm) also means a sharp increase in R&D and production costs. To maintain a leading position in a rapidly iterating industry, the company must continue high-intensity R&D investments -- from 2022 to the first half of 2025, the company's R&D investments were 1.185 billion, 1.283 billion, 1.353 billion, and 735 million yuan, respectively, at a relatively high level. This undoubtedly brings pressure on short-term profits, and in case of misjudgment on technological roadmap or lagging product development, the company will face the risk of being eliminated by the market. Regarding these challenges, Jincheng Semiconductor is certainly aware. In the prospectus, Jincheng Semiconductor stated that the funds raised this time are intended to be used over the next five years to support continued growth and enhance the company's R&D capabilities; develop a global customer service system over the next five years; advance strategic investments and acquisitions in the "platform + ecosystem" strategy. In addition, the funds raised will also be used for general operating funds and other general corporate purposes. In conclusion, despite the coexistence of industry opportunities and challenges, as a leading player in the domestic IC design field, Jincheng Semiconductor, with its forward-looking diversified layout, strong technical strength, and customer ecosystem, is clearly seen as a quality target for long-term investment in the secondary market. These characteristics will undoubtedly fuel market expectations for its listing on the Hong Kong market.