The initial public offering (IPO) for chip design firm Montage Technology (06809), which ran from January 30 to February 4, witnessed escalating interest in the public offering segment. By the evening of February 3, the margin financing subscription amount had surged to HK$197.93 billion, marking a substantial increase of over HK$100 billion from the HK$68.8 billion recorded on Monday. Based on a public offering fundraising target of HK$700 million, the offering was oversubscribed by 280 times. According to the IPO plan, Montage Technology intends to issue 65.89 million H shares, with 10% offered to the public in Hong Kong. The maximum offer price is set at HK$106.89 per share, potentially raising up to HK$7.04 billion. Each board lot of Montage Technology shares consists of 100 shares, requiring a minimum investment of HK$10,796.8. The company is expected to commence trading on February 9. China International Capital Corporation (CICC), Morgan Stanley, and UBS are acting as the joint sponsors for the offering. Montage Technology has secured 18 cornerstone investors, including J.P. Morgan, UBS Asset Management, the Yunfeng Fund established by Jack Ma and Yu Feng, Alibaba (09988), Aspex Management, Janchor Fund, abrdn, Barings, AGIC (associated with Cai Hongping, former Chairman of Deutsche Bank's Asia Pacific Investment Banking), Hel Ved Capital, Huaqin Technology, and Postal Savings Bank of China, with total investment commitments reaching $450 million. At the maximum offer price, and assuming no over-allotment option is exercised, these 18 cornerstone investors will be allocated 32.828 million shares, accounting for 49.82% of the total offering and 2.71% of the issued share capital. Montage Technology's A-shares (688008.SH) closed at RMB 162.18 on January 29, equivalent to approximately HK$182.22, implying a market capitalization of HK$185.93 billion. At the maximum H-share offer price, this represents a 41.3% discount to the A-share price, suggesting a potential 70.5% upside for the A-shares. The prospectus reveals that Montage Technology is a leading global fabless integrated circuit design company, focusing on providing innovative, reliable, and energy-efficient interconnect solutions for cloud computing and AI infrastructure. The company supplies interconnect chips, including memory interface chips and PCIe/CXL interconnect chips, to industry-leading clients, with applications spanning a wide range of end markets, including data centers, servers, and computing. According to Frost & Sullivan data, the company held a 36.8% global market share in memory interface chips in 2024, ranking first in the industry. The company's two primary product lines are interconnect chips and the Jintide CPU product line, with major customers including CEAC, Micron, Samsung, and SK Hynix. Financially, for the years ended December 31, 2022, 2023, and 2024, and the nine months ended September 30, 2025, the company recorded revenues of RMB 3.672 billion, RMB 2.286 billion, RMB 3.639 billion, and RMB 4.058 billion, respectively. For the same periods, it recorded annual/period profits of RMB 1.299 billion, RMB 451 million, RMB 1.341 billion, and RMB 1.576 billion, respectively. Regarding the use of net proceeds, the company plans to allocate 70% to research and development investments in the interconnect chip field; 5% to enhancing commercialization capabilities; 15% for strategic investments and/or acquisitions; and 10% for working capital and general corporate purposes.
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