Yueya Semiconductor, a Zhuhai-based company specializing in semiconductor packaging since 2006, has recently filed for an IPO on the ChiNext board, marking its second attempt to enter the capital market after withdrawing its application in 2014. However, the company now faces heightened regulatory scrutiny as it was selected for on-site inspection by the China Securities Association on October 10, alongside China Power Construction New Energy Group.
Unlike previous years where companies often withdrew applications upon inspection, none of the 14 firms selected for inspection in 2025 have done so, though none have yet passed the review. This places Yueya Semiconductor under significant pressure to demonstrate financial integrity, internal control compliance, and the rationality of its fundraising projects.
**Sluggish Revenue Growth and Profitability Concerns** Yueya Semiconductor's revenue growth has lagged behind industry peers, with revenues of RMB 1.667 billion, RMB 1.705 billion, and RMB 1.796 billion in 2022, 2023, and 2024, respectively, reflecting modest year-on-year growth of 2.28% and 5.28%. In contrast, competitors like Shennan Circuits Co.,Ltd. and Shenzhen Fastprint Circuit Tech Co.,Ltd. reported growth rates exceeding 35% in their packaging substrate businesses.
More concerning, the company's revenue declined by 8.06% year-on-year in the first half of 2025, with its core product, RF module packaging substrates, experiencing consecutive drops in sales. This has forced Yueya to lower prices and expand into lower-end products, further eroding profitability.
Net profits have also been volatile, plummeting 54.7% in 2023 and showing only partial recovery in 2024. In the first half of 2025, profits accounted for just 42.3% of the previous year's total. Gross margins have similarly declined, falling from 38.97% in 2022 to 24.42% in H1 2025. Additionally, the company relies heavily on tax incentives, which contributed over 20% of total profits in recent years.
**High-Stakes Bet on AI Packaging** Yueya aims to raise RMB 1.224 billion, with 84.7% allocated to expanding production of AI-related embedded packaging modules. The project targets a sevenfold increase in annual capacity, from 35,200 units in 2024 to 251,100 units. While this segment has shown relatively better capacity utilization (82.16% in H1 2025), its profitability has been erratic, with gross margins swinging from -6.96% in 2023 to 27.09% in H1 2025.
The rebound in margins was driven by a 17.94% price increase for embedded modules, attributed to high-value new products from key customer Infineon Technologies AG, which accounted for 37.9% of the segment's revenue. However, this dependence on Infineon and the cyclical nature of semiconductor demand pose significant risks to the expansion plan.
**Tougher Regulatory Environment** The 2025 IPO inspection regime has intensified, with coverage rising to 20% of applicants and a focus on "penetrative reviews" of financial data and internal controls. Historical data shows a 72.73% termination rate for inspected firms from 2022–2024. While no 2025 candidates have withdrawn yet, none have cleared the review either, underscoring the heightened scrutiny Yueya faces.
For Yueya, passing this "comprehensive audit" could validate its business model and unlock capital for growth. Failure to address regulatory concerns, however, may derail its 11-year quest for a public listing amid fierce competition and uncertain market conditions.
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