Produced by Sina Finance Listed Company Research Institute. Author: Yao.
Core viewpoint: Empyrean Technology is filling out its digital EDA tool chain through a combination of independent research and development, equity investments, and industry funds. This model could shorten the technology catch-up cycle, but it also makes technology integration more dependent on external companies and capital cooperation.
Shengshi Zhida both manages an industry fund in which Empyrean Technology participates and sells its stake in Xinhangji to Empyrean Technology, highlighting the difference between capital relationships and technological control.
A 149 million yuan equity transaction reveals another expansion path for China's leading electronic design automation (EDA) company: while investing heavily in research and development, it is also filling technology gaps through equity participation in companies and industry funds. But whether a tool chain assembled by capital can truly be transformed into independent, controllable commercial products remains unknown.
On September 30, 2026, Empyrean Technology signed an equity transfer agreement, planning to invest 149 million yuan to acquire a 6.90% stake in Xinhangji Technology Co., Ltd.
Source: Empyrean Technology's "Announcement on External Investment and Equity Participation in Xinhangji Technology Co., Ltd."
This investment was officially announced on the evening of October 8. Empyrean Technology gave a very clear reason: to fill the gap in placement and routing tools for digital chip design and accelerate the full-process coverage of digital circuit design EDA tools.
But it is worth noting that the 149 million yuan invested by Empyrean Technology this time was not a capital increase in Xinhangji, but the purchase of shares held by its existing shareholder Beijing Shengshi Zhida Investment Fund Management Co., Ltd.
More interestingly, just two months earlier, another listed company, Guowei Holdings, had also signed an equity transfer agreement with Shengshi Zhida for Xinhangji shares. The two transactions involved the same target company, but the per-share pricing was not the same.
Tracing further along the counterparty, Shengshi Zhida is not the first investment institution Empyrean Technology has encountered. As early as 2024, Empyrean Technology subscribed 100 million yuan to participate in the establishment of an EDA industry fund managed by Shengshi Zhida.
An industrial software company, a fund manager, and an unlisted EDA tool enterprise are linked together by this transaction. The questions they reveal may be more important than the 149 million yuan itself. When the leading domestic EDA company cannot complete all technology research and development on its own, how to use external capital and startup companies to build a tool system that can truly operate commercially is the key issue.
Two Prices in Two Months
Xinhangji was founded in 2020 and mainly develops EDA tools needed for the physical implementation of digital chips. Placement and routing is one of its core steps. After chip designers complete logic design, they still need to determine the physical locations and connection methods of massive logic units and repeatedly optimize indicators such as timing, power consumption, and area. In advanced digital chips, this process is highly complex. Even with other EDA tools for logic design and simulation verification, it is difficult to build a complete digital design flow usable by customers without reliable placement and routing capabilities.
This is also the direct reason for Empyrean Technology's investment in Xinhangji this time. According to the October 8 announcement, Empyrean Technology plans to acquire 9,269,142 shares of Xinhangji, with a transaction consideration of 149.04 million yuan, equivalent to about 16.08 yuan per share.
But another announcement from the Hong Kong Stock Exchange provides a different price reference. On July 20, 2026, Hong Kong-listed company Guowei Holdings announced that its subsidiary planned to sell 5 million shares of Xinhangji for a total price of about 63.2 million yuan, accounting for about 3.95% of its total equity. Of these, 4.51 million shares were originally planned to be taken up by Shengshi Zhida or its designated fund, and another 490,000 shares by Shaoxing Jiutian Shengshi Venture Capital Fund, with an average transfer price of about 12.65 yuan per share.
On September 29, Guowei Holdings further announced that the transferees of the 4.51 million shares were changed to three institutions: Shengshi Zhida, Fuzhou Jiutian Shengxin, and Sunshine Life Insurance. Among them, Shengshi Zhida planned to acquire 1,982,600 shares and pay about 25.0786 million yuan.
This means that in two agreements separated by more than two months, Xinhangji shares appeared at per-share transaction prices of about 12.65 yuan and 16.08 yuan, respectively. The latter was about 27% higher than the former. However, this price difference cannot be directly regarded as Shengshi Zhida's short-term resale profit.
First, Shengshi Zhida planned to buy only 1,982,600 shares from Guowei Holdings, while the shares it planned to sell to Empyrean Technology were 9,269,100 shares, a large difference in quantity. Second, as of the supplementary announcement on September 29, the previous transaction for 4.51 million shares still involved delivery conditions. The share sources, completion status, and attached rights of the two transactions may also not be the same.
The truly unresolved question is: when and at what cost did Shengshi Zhida acquire the 9,269,100 shares it sold to Empyrean Technology? Public information is not yet sufficient to fully reconstruct the historical cost and actual return of this batch of shares. But the two transactions have already provided a valuation question worth studying in depth: for the same unlisted EDA enterprise that is still loss-making, why are different investors willing to accept different transaction prices?
Source: Empyrean Technology's "Announcement on External Investment and Equity Participation in Xinhangji Technology Co., Ltd."
Is Empyrean Technology buying only corporate equity, or does it also include strategic value that can shorten its own technology research and development cycle? This requires distinguishing the financial value of equity investment from the commercial value of technology cooperation. Based solely on the shareholding ratio disclosed in the announcement, it is still impossible to confirm what exclusive technology rights it obtained.
Contributors and Decision-Makers
Compared with the price difference between the two equity transactions, the previous cooperative relationship between Empyrean Technology and Shengshi Zhida may better explain the characteristics of domestic EDA industry integration.
In July 2024, Empyrean Technology announced that it would jointly establish the Shaoxing Jiutian Shengshi Venture Capital Fund with Shengshi Zhida and local industrial funds. The fund was planned to have a scale of 500 million yuan and mainly invest in the EDA field. Empyrean Technology subscribed 100 million yuan.
But Empyrean Technology does not lead the fund's daily investment decisions. According to the disclosed partnership agreement, the fund's investment decision committee has five members, with Shengshi Zhida appointing four and Empyrean Technology appointing one. Investment projects require at least four votes in favor to be approved.
Source: Empyrean Technology's "Announcement on Joint Investment with Professional Investment Institutions (1)"
This means that at the investment committee level, if the members appointed by Shengshi Zhida agree unanimously, they can approve investment resolutions without the approval of the member appointed by Empyrean Technology. This is not a rare arrangement in private equity funds. Limited partners provide capital, while general partners are responsible for professional investment decisions, which is an important feature of the fund organization form.
But in Empyrean Technology's industrial strategy, this arrangement has another meaning. Empyrean Technology invests in industry funds not only to obtain financial returns. It needs to find companies with key EDA technologies to complete the tool chain it has not yet fully covered. If investment decisions are mainly made by the fund manager, then the listed company's industrial strategy and the fund's investment decisions are not completely aligned.
This difference became more obvious in 2026. In July, the Shaoxing Jiutian Shengshi Fund completed the acquisition of 490,000 Xinhangji shares held by Guowei Holdings. Two months later, Empyrean Technology directly signed an agreement with Shengshi Zhida, the manager of this fund, to buy more Xinhangji shares.
As a result, Empyrean Technology formed two different investment paths for the same EDA enterprise: one indirectly obtaining economic benefits through participation in an industry fund, and the other directly holding shares through the listed company. The two paths correspond to different funding entities, governance mechanisms, and investment return distribution methods.
It is worth noting that in August 2026, Empyrean Technology also planned to contribute 91 million yuan to participate in the Hefei Zhongwan Juxin Fund to deploy hardware-assisted verification tools in digital chip design. According to the announcement, this fund is managed by another institution, Zhongwan Capital, and Empyrean Technology has no veto power over the proposed investment targets.
In September, the company announced again that it would participate in the Qingdao Jianguang Shunchuang Huixin Fund with 90 million yuan. From placement and routing to hardware-assisted verification, Empyrean Technology is increasingly using industry funds to seek key technology assets.
For an industrial software company that needs to shorten the technology gap in a short period, external investment clearly offers more options than relying entirely on internal research and development. But from a governance perspective, the control rights corresponding to minority equity investments and limited partnership shares are not the same as the control rights formed by full acquisitions or internal research and development.
This is also a risk in Empyrean Technology's capital map that needs continuous testing: how many technology teams can it connect through capital, and to what extent can it coordinate these teams' product research and development, intellectual property, and commercial interests?
Why Does One Company Need Two Placement and Routing Enterprises?
Empyrean Technology's investment in Xinhangji this time is not its first foray into the digital placement and routing field. As early as 2023, the company had invested in Yifang Lianchuang (Jiangsu) Technology Co., Ltd., and as of the October 2026 announcement, it held a 7.13% stake in the latter. Yifang Lianchuang is also engaged in the research and development of EDA placement and routing and related digital tools.
From public introductions, both companies are involved in the physical implementation of digital chips, but there are differences in tool platforms, product capabilities, and commercialization priorities. Empyrean Technology stated in its latest announcement that Xinhangji and Yifang Lianchuang can form technological synergy and help it accelerate breakthroughs in the shortcomings of digital placement and routing tools.
However, holding minority stakes in two technology companies does not automatically mean owning a commercially operable software system that can run together. The competitiveness of an EDA tool chain comes not only from the technical level of individual point tools, but also from whether the tools can complete data connection, process adaptation, algorithm collaboration, and continuous verification.
For chip design customers, the value of purchasing a complete EDA system lies in reducing the costs of cross-tool conversion, troubleshooting, and design verification, rather than owning multiple independent software products from different vendors. If different tools are still independently maintained by their respective research and development teams, even if the investor holds shares, it does not necessarily mean it can unify product planning, source code management, update pace, and customer service.
Therefore, after Empyrean Technology fills out its tool chain through equity participation, the more complex problem is how to integrate the software products of invested companies into a complete solution deliverable to customers. This may require commercial licensing, joint research and development, interface openness, intellectual property licensing, and customer service arrangements, not just financial investment.
For the invested companies, cooperation also involves choices. On the one hand, they may use Empyrean Technology's customer base, channels, and process ecosystem to accelerate commercialization. On the other hand, maintaining the independence of their technology路线 and customer relationships may also serve their own business interests. This contradiction is not necessarily irreconcilable, but it determines how far industry-fund-style technology integration can go.
Research and Development Investment Is Already Large, but Software Revenue Is Growing Slowly
There is also a realistic background for Empyrean Technology's external investment strategy: independent research and development requires long-term, high-intensity funding and talent investment.
According to the 2025 annual report, Empyrean Technology's full-year operating revenue was 1.325 billion yuan, up 8.40% year on year; net profit attributable to shareholders was 60.98 million yuan, down 44.30% year on year; and net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of 9.8 million yuan. In the same period, research and development investment reached 859 million yuan, accounting for 64.84% of operating revenue.
In the first half of 2026, the company continued to invest 411 million yuan in research and development, accounting for 72.61% of operating revenue in the same period. Research and development technical personnel reached 1,128, accounting for about 74% of the total number of employees.
For an EDA enterprise that relies on high-level research and development personnel and complex software algorithms, high research and development intensity is not surprising. What is noteworthy is the change between research and development investment and core software sales revenue.
In 2025, Empyrean Technology's EDA software sales revenue was 1.075 billion yuan, down 1.63% year on year; technical service revenue was about 201 million yuan, up 74.93% year on year. In the first half of 2026, this divergence still existed: EDA software sales revenue was 434 million yuan, up 4.89% year on year; technical service revenue was 103 million yuan, up 53.88% year on year.
In other words, while Empyrean Technology continues to expand its digital EDA technology layout, the growth of its EDA software sales is significantly weaker than its technical service business. This change cannot simply be understood as a problem with the software business model. On the one hand, EDA products usually require long-term verification, especially when new products enter the core processes of wafer fabs and chip design companies, and the commercialization cycle may be long. On the other hand, technical services themselves may also become part of tool deployment, process adaptation, and customer relationship expansion.
But different revenue models correspond to different economies of scale. Once standardized software completes research and development, it has the opportunity to achieve repeat sales through new licenses, maintenance, and upgrades. Technical services often require more project personnel and customized development investment, and revenue growth may not bring the same proportional profit growth.
Empyrean Technology's technical service gross margin in the first half of 2026 was 46.37%. The company explained that to complete related projects, both self-developed and commissioned development workloads increased. In the same period, the company's net profit attributable to shareholders was a loss of 45.06 million yuan, and net cash flow from operating activities was an outflow of 28.28 million yuan, compared with a net inflow of about 243 million yuan in the same period of the previous year.
These data alone cannot prove that the effect of technology integration is insufficient. EDA enterprises have obvious sales seasonality, and Empyrean Technology's fourth quarter of 2025 contributed about 39% of full-year operating revenue; factors such as equity incentive expenses also affect current profit. But they at least show that the future technology layout represented by capital investment and the current performance of core software revenue and cash flow cannot yet be directly equated.
While continuing independent research and development, Empyrean Technology also needs to allocate funds for external technology teams, equity transactions, and industry funds. Whether this dual-track expansion model is economically efficient ultimately cannot be measured only by the number of invested companies or the names of newly added tools.
From Capital Puzzle to Technology Integration
Empyrean Technology's choice has a certain degree of industrial representativeness. In the past, domestic EDA companies mostly relied on forming local advantages in segmented fields such as analog, radio frequency, and storage, and gradually entered the workflows of chip design and manufacturing customers. But digital circuit EDA involves more tools, and the technological dependencies among tools are also more complex.
For any Chinese company hoping to build a full-process digital EDA system, relying solely on its own research and development team to develop item by item is not only time-consuming, but also means repeatedly building some technical capabilities. Obtaining technological synergy through external investment is a realistic choice to shorten this process.
The problem is that financial capital can buy shares, but it cannot automatically buy the long-term willingness of technology teams to cooperate; it can establish shareholder relationships, but it cannot replace customer verification; it can connect several tool companies at the equity level, but it does not mean their products have formed a unified system that can be delivered stably.
This is precisely the contradiction most worth observing in Empyrean Technology's future operations. For an industrial software company, the real competitive barrier is often not how many software assets it holds, but whether it can organize tools, algorithms, process data, research and development personnel, and customer needs to form a product system capable of continuous iteration.
As of now, Empyrean Technology's announcement confirms that Xinhangji is still in a loss-making state. The 149 million yuan transaction is planned to be paid in three installments, and the final equity structure is also subject to confirmation after the transaction is completed. As for the previously held 7.13% stake in Yifang Lianchuang and the industrial investments carried out through multiple funds, there is still a lack of quantifiable public information on how much additional software licensing revenue they can contribute in the future.
This makes the transformation Empyrean Technology is undergoing not only an expansion from analog EDA to digital EDA, but possibly also a shift from a software company centered on internal research and development to an industrial integration platform that needs to coordinate multiple external technology entities. The two organizational models are not mutually exclusive, but their standards of success are completely different. The results of research and development investment can be verified through product releases, customer orders, and software revenue; the results of industrial investment must further test governance rights, technological synergy, investment returns, and the distribution of commercialization benefits.
From this perspective, Empyrean Technology's 149 million yuan equity transaction is only the beginning.
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