HK Stock New Issue: Junzheng Shares (03223.HK) IPO Analysis

$INGENIC(03223.HK)$XL2CSOPHYNIX(07709.HK)

Basic Information:

Subscription Period: August 17 - August 20; Results announced on the 21st; Grey market trading on the 24th; Listing on the 25th;

Issue Price: ≤102.80

Minimum Subscription Fee: 10383.68

1 Lot: 100 shares

Global Offer: 31.2873 million shares

Public Offer: 3.1288 million shares

Number of Lots Issued: 31,288 lots

Cornerstone Investors: Yes, 11 cornerstone investors subscribed for a total of 46.75%

Greenshoe: Yes, provided by Guotai Junan

Sponsor: Sole sponsor by Guotai Junan

Allocation Mechanism: Mechanism B, Re-allocation 10%

Junzheng Shares was established in 2005 and listed on the ChiNext Board of the Shenzhen Stock Exchange in 2011. It is one of the few domestic Fabless design companies simultaneously layouting in three major chip categories: memory, computing, and analog. The company's core products cover three sectors: First, memory chips, including niche DRAM, SRAM, and NOR Flash, focusing on automotive-grade and industrial-grade high-reliability scenarios; Second, computing chips, including intelligent vision SoC, embedded MPU, and AI-MCU, equipped with self-developed CPU/VPU/NPU cores; Third, analog chips, including LED drivers and highly integrated Combo chips, covering automotive lighting, industrial control, and other fields. According to Frost & Sullivan's 2025 revenue ranking data, the company ranks at the forefront globally in multiple niche tracks: No. 2 globally and No. 1 in mainland China in the SRAM field, and No. 1 globally in automotive-grade SRAM; No. 7 globally and No. 2 in mainland China in niche DRAM, and No. 5 globally in automotive-grade; No. 7 globally in NOR Flash. After completing the acquisition of US-based ISSI in 2020, automotive and industrial storage businesses have become the core growth engine, with products sold to approximately 50 countries and regions worldwide.

Financial Performance: The company's revenue for 2023-2025 was 4.531 billion, 4.213 billion, and 4.741 billion RMB respectively, with net profits of 516 million, 364 million, and 375 million RMB during the period. In 2024, performance was temporarily under pressure due to the downward cycle of the memory industry, but gradually recovered in 2025. Entering 2026, driven by AI computing power demand, the memory super-cycle has arrived, leading to explosive growth in the company's performance: Q1 2026 revenue reached 1.56 billion RMB, a year-on-year increase of 47.12%; net profit was 320 million RMB, a significant year-on-year increase of 334.81%. Memory chips and computing chips grew year-on-year by 53.63% and 49.09% respectively, with gross margins recovering significantly. In terms of R&D investment, the company's R&D expenditure in 2025 was 712 million RMB, accounting for 15.0% of revenue, maintaining high-intensity technological investment to support subsequent product iterations.

Use of Proceeds: Approximately 50% for R&D of three core businesses; approximately 25% for strategic investments and M&A; approximately 15% for sales network expansion; approximately 10% for working capital;

Junzheng Shares introduced 11 cornerstone investors this time, accounting for 46.75% of the subscription share; including Shanghai state-owned background EmeraldPrime (Maker Space), GF Fund, Gaoyi Asset, Huaqin Technology, ICBC Wealth Management, China Universal Hong Kong, Singularity Asset, etc.

Junzheng Shares adopts Mechanism B,with a 10% re-allocation;Global offer of 31.2873 million shares,Hong Kong offer of 3.1288 million shares,1 lot is 100 shares,totaling 31,288 lots; Jiawei subscription requires 415,400 principal, Yiwei subscription requires 519,200 principal; the current oversubscription multiplier is 36 times, expected to reach around 800 times finally, with an estimated winning rate of 0.15% per lot;sponsored solely by Guotai Junan, with cornerstone investors and greenshoe option, historical sponsored projects are quite good.

Driven by AI computing power, DRAM average prices rose by about 90% and NAND by over 30% throughout the year, with a niche DRAM supply-demand gap of 19%-20% continuing into 2027-28; Micron and Samsung's discontinuation of 2D NAND production has pushed up SLC NOR prices.Junzheng's niche DRAM is mainly manufactured by United Microelectronics Corporation (UMC) (costs can be passed downstream + inventory appreciation), directly benefiting from the "price hike - performance realization" main theme.

As of the A-share close on August 17, Junzheng Shares (300223.SZ) stock price was 155.39 RMB. The highest issue price for H-shares is 102.80 HKD,corresponding to a discount rate of about 43.2%, providing a safety cushion;referencing the performance of semiconductor AH new stocks since 2026: GigaDevice grey market rose over 36%, Montage Technology grey market rose 39.77% and first day rose 57.17%, Xinqi Microassembly first day surged 103.77%;there is profit potential in the grey market,if A-shares continue to strengthen during the subscription period and sentiment in the semiconductor sector heats up, there will be even more profit; if the broader market weakens, refer to Zhongji Innolight.

Junzheng Shares (03223)has solid fundamentals—global leader in niche memory chips, entering a period of explosive profit growth, with Q1 2026 profit increasing 330% year-on-year; meanwhilethe industry track is high-quality, with memory chips in an upward cycle driven by AI, the company's leadership position in automotive-grade storage is solid, and it possesses self-developed RISC-V CPU cores, with a technical route aligned with industry trends and outstanding technical strength; currently, the 43.2% discount provides a safety cushion; however, the semiconductor industry is cyclical, and risks such as changes in downstream demand, inventory levels, and intensified market competition need to be monitored.

Discuss in the comments section how many times you expect it to be oversubscribed?

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