Breaking down 1.67B shares: Changxin Technology’s battle allocation roster is luxurious

Author: Qi Doudou

On the evening of July 14, Changxin Technology disclosed its IPO issuance announcement for the STAR Market. The company set its offering price at 8.66 yuan per share through the offline inquiry pricing process. Based on the company’s total share capital after listing, Changxin Technology’s listing valuation was 579.18B yuan. The strategic placement roster that has drawn significant market attention was released the same day.

Overall, the lineup for this strategic placement is quite impressive and can be broadly divided into three groups.

First, subsidiaries of the joint sponsors (joint lead underwriters), including CICC Wealth and CCBIC Investment.

Second, special asset management plans established by Changxin Technology’s senior executives and core employees participating in this issuance’s strategic placement.

Third, investors that participate in the strategic placement—large enterprises or their subsidiaries that have strategic cooperation relationships with Changxin Technology’s business or a long-term cooperation vision; and large insurance companies with long-term investment intent or their subsidiaries; national-level large investment funds or their subsidiaries.

From the allocation results, the offering price for this issuance was 8.66 yuan per share, and the total issuance size was 57.92B yuan (before the exercise of the over-allotment option). If the over-allotment option were fully exercised, the total issuance size would be 66.61B yuan.

The final strategic placement results show that the final strategic placement quantity for this issuance was 1.67B shares. The difference between the final strategic placement quantity and the initial strategic placement quantity was 1.68B shares; most was reallocated to the online issuance. The portion of less than 500 shares, i.e., 84 shares, was reallocated to the offline issuance.

From the strategic placement roster, multiple combinations from the National Social Security Fund, multiple combinations of the basic pension insurance fund, China Development Fund Phase II, China Life, PICC (People’s Insurance Company of China), China Post Life Insurance, and Taikang Life Insurance, among other long-term funds, entered the market.

More noteworthy is that a number of companies from the semiconductor industry chain and their partners appeared on the strategic placement roster. They include upstream supply-chain companies such as semiconductor materials and equipment suppliers, as well as downstream customers such as mobile phone, automobile, and cloud computing companies.

Among them, semiconductor industry chain companies include MKS Instruments, Renshi Technology, Anji Technology, Tongfu Microelectronics, Xi’an Yicai, Toppc, Yetang股份, and Hobi Semiconductor, among others.

Downstream application-side companies include Xiaomi Technology (Wuhan 1810 Enterprise Management Co., Ltd.), Meituan (Shenzhen Sanq Kuai Network Technology Co., Ltd.), Alibaba Cloud (Hangzhou Alibaba Cloud Tianfei Information Technology Co., Ltd.), ZTE, Chery Automobile (Chery Intelligent), Tencent (Shanghai Haoyu Information Technology Co., Ltd.), as well as Transsion Holding (Chongqing Transsion), TCL Technology, NIO, and others.

In addition, the sponsors and their related subsidiaries participating in the underwriting along with the company’s executives and core employees’ asset management plans subscribed for some of the allocation.

Worth mentioning is that Changxin Technology also has unique requirements for selecting strategic placement investors.

First, strategic placement investors introduced should be able to enhance the issuer’s industry-chain synergy capability and ensure the supply of critical resources.

Changxin Technology said that by introducing large enterprises or their subsidiaries along the upstream and downstream of the industry chain that have strategic cooperation relationships with the company’s operating business or a long-term cooperation vision, stable synergy can be formed across needs for R&D, manufacturing, volume production, and product iteration of storage chips such as DRAM, covering upstream core materials, semiconductor equipment, key processes, packaging and testing, and other steps.

Second, strategic placement investors introduced can bring downstream application scenarios, customer resources, and opportunities for order growth.

Changxin Technology stated that introducing large enterprises or their subsidiaries in areas such as terminal applications, cloud computing, communication equipment, and intelligent vehicles can leverage their market position and customer needs in scenarios including consumer electronics, servers, data centers, in-vehicle electronics, and AI computing power, to help the company advance storage product verification and onboarding, co-create specifications, conduct joint testing, and enable mass deployment applications.

Third, strategic placement investors introduced can optimize the shareholder structure and support the issuer’s long-term development.

Changxin Technology said that introducing long-term capital investors such as large insurance companies with long-term investment intent and national-level large investment funds can help strengthen capital market recognition of the company’s long-term value, industry position, and growth space, optimize the issuer’s investor structure, and stabilize the long-term capital base.