Gathers Semiconductor: On the Eve of Performance Realization and Hong Kong Listing, Controlling Shareholder's Affiliate Plans "Liquidation-Style" Reduction

Issuer: Sina Finance Listed Company Research Institute

Author: Guangxin

After reporting a net profit attributable to shareholders of 363 million yuan and submitting an application for Hong Kong listing, the actual controller camp of Juchen Co., Ltd. has once again announced a plan to reduce holdings.

On the evening of March 15, Juchen Co., Ltd. disclosed a share reduction plan. The company’s actual controller, Chen Zuotao’s Beijing Luojia Tianhao Investment Center (Limited Partnership) (referred to as “Beijing Luojia”), plans to reduce no more than 41.2411 million shares within the next three months, accounting for 2.61% of the company’s total share capital. Based on the closing price of 124.62 yuan per share on the date of publication, this corresponds to approximately 514 million yuan in cash.

The announcement shows that this reduction plan is due to Beijing Luojia’s LP capital needs and will not lead to changes in the company’s controlling shareholder or actual controller. Within three months after the announcement, starting from 15 trading days later, it will reduce no more than 1.61% of the company’s shares through block trades, and no more than 1% through centralized bidding.

The total shares reduced by these two methods will not exceed 2.61%, which is exactly Beijing Luojia’s current entire position. This reduction is a “clearance” operation.

Source: Company Announcement

Multiple Reductions by the Actual Controller Camp, Northbound Funds Increase Holdings in 2025

It is worth noting that this is not the first time the actual controller-related entities have reduced holdings. According to statistics, in recent years, the actual controller Chen Zuotao has repeatedly reduced holdings through affiliated entities such as Beijing Luojia, Wuhan Luojia, and Tianhao Technology, with total cashing out nearly 1 billion yuan.

2025 is a period of intensive reductions by the actual controller camp. From March 4 to 6, Beijing Luojia and Wuhan Luojia jointly reduced holdings by 2.99% through block trades and centralized bidding, totaling about 369 million yuan; from October 10 to 22, Wuhan Luojia reduced holdings by 2.61%, with cash proceeds of about 605 million yuan. Just these two reductions, the total cash obtained by the actual controllers reached 974 million yuan.

In addition, the company has also experienced reductions by non-actual controller shareholders.

From April to July 2024, shareholder Juchen Hong Kong, holding more than 5%, reduced 1.220546 million shares through centralized bidding; on July 26, 2024, it further reduced 3.18 million shares via inquiry transfer at 55.49 yuan per share.

Although Juchen Hong Kong bears the “Juchen” name, this entity has no relation to the company’s actual controllers or senior management. After the transfer, Juchen Hong Kong exited the list of shareholders holding more than 5%.

On May 27, 2025, the company’s second-largest shareholder, Yiding Investment, reduced 3.8 million shares via inquiry transfer at 63.19 yuan per share. Yiding Investment’s original shareholding ratio was 7.22%, which decreased to 4.82% after the reduction, exiting the top five shareholders.

It is noteworthy that despite reductions by the actual controller camp and other shareholders, institutional investors remain interested in Juchen Co., Ltd.

In the first three quarters of 2025, Xingquan He Run Hybrid Securities Investment Fund entered the company’s top ten shareholders with 1.5354 million shares, accounting for 0.97%; Southern Information Innovation Hybrid Securities Investment Fund also became a new top ten shareholder with 1.4464 million shares, accounting for 0.91%. Additionally, Hong Kong Central Clearing and Settlement Ltd. (Northbound funds) increased holdings by 1.5189 million shares, with its proportion rising by 0.94 percentage points to 4.22%.

2025 Performance Surge, Timing of Reductions Coincides with Hong Kong Listing Preparation

The timing of this reduction by the actual controller camp is quite interesting, as just a month earlier, Juchen Co., Ltd. reported excellent results. According to the performance quick report released at that time, in 2025, the company achieved revenue of 1.221 billion yuan, up 18.73% year-over-year, and net profit attributable to shareholders of 363 million yuan, up 25.01%, both hitting record highs.

Regarding this growth, the company stated that it was mainly due to product structure adjustments leading to improved gross profit margins. During the period, shipments of DDR5 SPD chips, automotive-grade EEPROM chips, and high-performance industrial EEPROM chips increased rapidly compared to the previous year. Optical Image Stabilization (OIS) camera motor driver chips were used in several mid-to-high-end models of mainstream smartphone brands. These factors drove gross profit margin up by 2.46 percentage points.

Additionally, the company’s R&D investment did not lag behind, reaching 209 million yuan for the year, a 19.01% increase, matching the growth rate of revenue and reaching a historical high. During this period, the company cooperated with leading global memory manufacturers to launch next-generation high-performance storage device VPD chips, becoming the first to enter the design verification stage. Moreover, the company’s automotive-grade storage chips are now widely used in 16 of the top 20 global automotive brands and all major domestic brands’ core components.

From this quick report, it appears that Juchen Co., Ltd. has formed a positive feedback business model of “early R&D investment entering a harvest phase, healthy cash flow supporting ongoing R&D, and future competitiveness.” However, shareholders are choosing to reduce holdings intensively at this stage, which may indicate that, in some investors’ view, the current valuation has reached expectations, and the stock price may already be well aligned with the company’s market potential.

Furthermore, it is important to note that on January 26, 2026, Juchen Co., Ltd. submitted an application to the Hong Kong Stock Exchange for H-share issuance and listing, aiming for an “A+H” listing. According to its prospectus, the funds raised will be used for R&D investment, strengthening overseas industrial chains and promotion, strategic acquisitions, and working capital.

Based on the prospectus and financial data, the company’s fundamentals are solid, with stable performance, product matrix, and R&D strength. A notable concern might be its reliance on major clients.

From 2023 to the first three quarters of 2025, sales to the top five customers accounted for 57.7%, 57.5%, and 59.3% of total sales, respectively, with the largest customer’s revenue share increasing from 22.9% to 41.1%. Additionally, the supply side also shows concentration, with procurement from the top five suppliers accounting for 90.1%, 91.3%, and 85.8% during the same periods.

Overall, if the company successfully lists in Hong Kong, it will help strengthen its long-term capital strength, benefiting future development. However, in the short term, the dual effects of A-share shareholder reductions and H-share issuance may exert supply-side pressure on the stock price. Its subsequent performance will depend on market capital inflow and absorption capacity.