The chip designer Montage Technology starts its IPO today, raising a maximum of over 7 billion, with an entry fee of HKD 10,796.8 per lot. Alibaba and others are the cornerstone investors

The wafer-free integrated circuit design company Montage Technology (06809.HK), which is already listed on the A-share market, will begin its public offering today (30th) until next Wednesday (February 4th), offering 65.89 million H shares, with 10% allocated for public offering in Hong Kong. The offering price per share will not exceed HKD 106.89, raising a maximum of nearly HKD 7.043 billion. The entry fee for one lot of 100 shares is HKD 10,796.8. The listing is expected on February 9th. China International Capital Corporation, Morgan Stanley, and UBS are the joint sponsors.

Montage Technology (688008.SH) expects to raise a net amount of nearly HKD 6.905 billion from this H share offering. The company plans to use approximately 70% of the net proceeds for research and development in the interconnect chip sector over the next five years to enhance the group's global leadership and seize opportunities in cloud computing and AI infrastructure; about 5% will be used to improve the group's commercialization capabilities; approximately 15% will be allocated for strategic investments and/or acquisitions to achieve long-term growth strategies; and about 10% will be used for working capital and general corporate purposes.

Montage Technology currently has two main product lines: interconnect chips and Jinda products. Its interconnect chips mainly include memory interface chips, memory module supporting chips, PCIe/CXL interconnect chips, and clock chips. Jinda products are primarily composed of Jinda CPUs. Major customers include memory module manufacturers, server OEM/ODM, and cloud service providers, with key clients including CEAC, Micron (MU.US), Samsung, and SK Hynix. In the first nine months of last year, revenue was HKD 4.06 billion, an increase of 57.8% year-on-year, with a profit attributable to the parent company of HKD 1.63 billion, up 66.9%.

The cornerstone investors of the company's H shares subscribed for shares worth USD 450 million, including JPMIMI under JPMorgan, UBS Asset Management, New Alternative and New Golden Future under Yunfeng Capital, Alisoft China under Alibaba-W (09988.HK), Aspex, Janchor Fund, Baillie Gifford, Mirae Asset, AGIC, Hel Ved, Huqin Communications (603296.SH), Huadeng Technology, China Post Fund, Taikang Life, MY Asian, Qube, and abrdn Asia