The global semiconductor industry is experiencing an unprecedented cyclical upswing in 2026, fueled by surging demand from AI computing power and intelligent edge devices. Storage industry giants are posting remarkable financial results that have captured the market's attention. Riding this wave of exceptional earnings, Montage Technology, GigaDevice Semiconductor, Ingenic Semiconductor, and Longsys Electronics have sequentially filed for listing on the Hong Kong Stock Exchange, embarking on their "A+H" dual-listing journey to access offshore capital.

However, the secondary market has received these companies with starkly contrasting receptions. Montage Technology and GigaDevice saw their shares surge 63.7% and 37.5% respectively on their debut days, opening high and climbing higher. In contrast, Ingenic Semiconductor and Longsys, despite boasting substantial overseas business and deep global footprints, recorded a flat debut (0.00%) in August and a loss of -1.02% in September respectively. Stabilizing agents were forced to utilize an estimated 42% and 94.4% of their greenshoe options respectively to barely maintain the offering prices. Why are these quality leaders, with over 70% overseas revenue and profits exploding hundreds of times in the first half of the year, meeting such a cold reception in the Hong Kong market? Are storage companies wisely capitalizing on the cyclical upturn to raise funds, or are they stepping into a valuation trap shaped by cyclicality and share supply dynamics?

IPO Data Analysis: A Shift in Market Sentiment Across Four New Listings

Analyzing allotment patterns in Hong Kong IPOs, the "subscription ratio" (size of international placement subscription relative to public offering subscription) serves as a critical barometer of true market temperature. A lower figure indicates frenzied retail participation in the public offering phase, signaling strong speculative sentiment. Conversely, a higher ratio suggests minimal retail interest, with demand relying primarily on international institutional subscriptions, indicating subdued speculative enthusiasm. A comparison of the four companies' offering data reveals a clear shift in market sentiment. The green shoe figures below are exclusive estimates by LiveReport's big data team and may differ from actual usage.

Montage Technology and GigaDevice, which listed early in 2026, saw an influx of retail capital. Their public offering subscriptions reached HK$503.1 billion and HK$256.5 billion respectively, with subscription ratios of 47.93% and 30.74%, and public offering oversubscription multiples of 500 to 700 times. Cornerstone investors locked up nearly 50% of the shares at the top level, and substantial off-market funds rushed in on the first day, fueling a strong upward price trend.

Ingenic Semiconductor: Residual retail interest remained, but international institutions were extremely cautious. Public offering subscriptions reached HK$301.2 billion, yet its international placement subscriptions were only HK$24.648 billion, resulting in an international placement oversubscription multiple of just 8.43 times. The lofty offering P/E ratio of 123.84 times directly deterred overseas long-term investors, forcing the stabilizing agent to rely on 42% of the greenshoe option to passively hold the price flat on debut.

Longsys: Retail enthusiasm for new listings had largely subsided. By September, public offering subscriptions plummeted to just HK$25.553 billion, with an oversubscription multiple of merely 40 times, causing its subscription ratio to surge to 86.61%. This signals a significant retreat in retail sentiment for semiconductor sector IPOs. Exacerbating the situation, Longsys's cornerstone investor allocation was only 16.74%, meaning over 83% of newly issued shares were not subject to lock-up periods. Without sufficient retail follow-through demand, the large floating supply transformed into a wave of profit-taking and defensive selling, ultimately forcing the stabilizing agent to deploy 94.4% of the greenshoe option just to underpin the share price.

Why Aren't Offshore Investors Buying the "Global Expansion" Narrative?

Some believe storage companies with significant overseas business deserve a premium from foreign investors. However, the offshore pricing logic of the Hong Kong market often looks beyond simple geographic revenue distribution, directly scrutinizing the underlying business model.

1. Core Standard-Setters vs. Cyclical Assembly Module Manufacturers: Montage Technology and GigaDevice operate on a typical asset-light Fabless (chip design) model. Montage holds a global 36.8% share in DDR5 memory interface chips and participates in setting JEDEC standards, maintaining gross margins around 60%. GigaDevice has established high replacement barriers in the NOR Flash and MCU markets. Offshore institutions classify these two as the "computing power foundation for AI," and amidst prevailing market excitement, are willing to pay high valuations of 80-90 times earnings. On the other hand, module and packaging/testing companies are directly constrained by wafer pricing from upstream manufacturers like Samsung, Micron, and SK Hynix, while facing intense competition downstream in the consumer electronics market. Even if they enhance resilience through brand globalization and overseas manufacturing, within the traditional valuation framework of overseas long-term capital, module processors lacking core wafer fabrication and architecture design capabilities are easily labeled as "hardware foundries." The historical median valuation for such assets in both US and HK markets typically ranges from only 10 to 18 times earnings.

2. The "Reverse Pricing Paradox" of Cyclical Stocks: Semiconductor memory is a classic, strongly cyclical industry. Capital markets adhere to a firm rule: "At the peak of the cycle when profits are most prosperous, assign the lowest P/E ratio; at the cycle's bottom with industry-wide losses, look at the highest P/E ratio." In the first half of 2026, surging spot chip prices drove net profits of module companies up dozens or even hundreds of times year-over-year. However, by August and September, market consensus fractured over whether downstream consumer demand could absorb higher-priced chips and whether capacity expansion by original manufacturers would lead to another oversupply. At this juncture, deriving offering valuations of tens or even hundreds of times earnings based on peak-cycle profits naturally fails to secure institutional consensus.

Divergent Financing Paths: Distinct Underlying Strategies Behind Similar Capital Moves

While superficially all four companies are raising funds during a hot period, their underlying strategies are fundamentally different.

1. Chip Design Camp (Montage Technology, GigaDevice): "Offshore Expansion" with Asset-Light Model - Their primary strategy for listing in Hong Kong is to leverage the global semiconductor upcycle to establish an internationalized A+H capital platform, deepen collaboration with overseas customers, and attract global long-term foreign capital. Supported by robust on-book cash flows, both companies have the confidence in the A-share market to enhance Earnings Per Share (EPS) through substantial dividends and share buybacks for cancellation. For instance, GigaDevice plans to use RMB 1 to 2 billion of its own funds for buybacks and cancellations of A-shares. Montage Technology also routinely executes share buybacks, cancellations, and dividends at the several hundred million RMB level.

2. Module & Packaging/Testing Camp (Biwin Storage, Longsys, Netac Technology): Aggressive Refinancing and High Exposure in the Capital Chain - Module manufacturers urgently need substantial private placements during the price upcycle to "buy equipment and stockpile wafers," facing a significant "sweet burden" as working capital tied up in inventory swells with rising wafer prices. For example, Longsys' inventory book value reached RMB 25.777 billion in mid-2026, accounting for over 60% of its total assets. Biwin Storage has nearly depleted the RMB 1.9 billion raised in its earlier private placement, with its Huizhou advanced packaging/testing facility (86% invested) and wafer-level advanced packaging project (99.88% invested) consuming almost all capital. Netac Technology has proposed a private placement plan to raise up to RMB 3.2 billion for enterprise-grade SSD development and working capital replenishment. For module manufacturers, heavy-asset packaging/testing base construction and massive raw material procurement create a significant capital sink. Hong Kong listings and private placements serve both as ammunition to seize the initiative in AI edge-side packaging and as a "grain reserve" to prevent liquidity crises in the latter half of the cycle.

Implications for the Future of Storage Assets

The lukewarm public debuts of Longsys and Ingenic sound a triple warning for upcoming storage companies planning Hong Kong listings, such as Biwin Storage and Netac Technology.

1. Dispelling the Illusion of "H-Shares as an Unconditional ATM": While refinancing tools on the HKEX (like general mandate placements) are flexible and efficient, they presuppose good liquidity and a valuation premium in the secondary market. If new listings break their issue price on day one, A/H discount ratios are crushed below 50%, and daily trading volumes shrink, listed companies cannot execute cost-effective offshore placements, losing the flexibility of their overseas financing channel.

2. Refusing to Blindly Inflate Offering Prices: At the peak of an industry's expectation realization phase, insisting on maximizing fundraising with high valuations (like Ingenic's 123 times P/E) not only fails to secure long-term capital but can also backfire on secondary market performance due to weak international demand. A reasonable offering discount (e.g., 35%-45%) is an essential safety cushion to attract international cornerstone investors and protect the share price.

3. Maximizing Cornerstone Lock-ups is a Lifeline Against Volatility: In cyclical phases where market subscription sentiment becomes rational (with shrinking retail share and rising subscription ratios), companies must align with Montage Technology and GigaDevice by anchoring cornerstone investor holdings within the maximal 45%-50% range. Locking up the free float with long-term capital reduces selling pressure and prevents excessive share dispersion that could turn the stock into a short-selling target for hedge funds.