Shenzhen Vanguard Semiconductor Co., Ltd. (hereinafter referred to as "Vanguard Semiconductor"), a power semiconductor device supplier crowned as a National-Level Specialized, Refined, Distinctive, and Innovative "Little Giant," recently submitted another listing application to the main board of the Hong Kong Stock Exchange, with GF Securities as the sole sponsor.
This marks the company's second attempt to list in Hong Kong this year. Its first prospectus, submitted on January 12, 2026, automatically lapsed after six months.
Since its establishment, Vanguard Semiconductor has completed multiple rounds of financing, with a star-studded shareholder list—industrial capital from Intel Asia-Pacific, OPPO Guangdong, Hubei Xiaomi, and CATL New Energy is prominently featured. Its post-investment valuation surged over 500% in just two and a half years to approximately RMB 2.9 billion.
One month before the listing application, the China Securities Regulatory Commission (CSRC), in its supplementary materials request for overseas issuance listing filing, required Vanguard Semiconductor to provide a clear, conclusive opinion on whether the share price for new shareholders added within the last 12 months was fair and reasonable and whether there was any benefit transfer, pushing this "Little Giant" into the spotlight of public opinion.
A chairman of a marketing consulting firm who has long followed the semiconductor industry chain told Phoenix WEEKLY Finance that the prospectus did not disclose any direct relationship between the top five customers and the company's shareholders. However, it is noteworthy that Moqin Intelligent (under Huaqin Technology) holds a 2.12% stake. As a global leading ODM (Original Design Manufacturer) provider, whether Huaqin Technology's affiliation extends to the customer level may require further clarification from the company.
Industry Pains, High-Margin 'Ace' Slows Down
In the first half of 2026, the global semiconductor industry was still in the throes of inventory adjustment. Operating in the mid- to low-voltage MOSFET (Metal-Oxide-Semiconductor Field-Effect Transistor) segment of the power semiconductor track, Vanguard Semiconductor was not immune.
The prospectus shows that in the first five months of 2026, the company's net profit turned from profit to loss, recording a loss of RMB 510,000, compared to a profit of RMB 26.529 million in the same period last year. Simultaneously, Vanguard Semiconductor's overall gross profit margin decreased from 22.4% in the first five months of 2025 to 17.9% in the same period of 2026. The prospectus attributed the decline to "market-driven pricing adjustments."
However, a deeper reason might lie in the passive shift in product mix. In the first five months of 2026, the revenue contribution of the company's high-margin WLCSP (Wafer-Level Chip Scale Packaging) products dropped from 46.3% to 27.4%. The prospectus attributed the decline in WLCSP revenue to smartphone manufacturers adopting more conservative production and procurement plans—rising memory chip prices increased overall unit costs, terminal consumption recovery was slower than expected, and customer inventory adjustments combined with industry price competition.
Data shows that during the same period, revenue from Vanguard Semiconductor's non-WLCSP products grew by 52.6% to RMB 246 million, but the product gross margin was only 16.6%. As the company's revenue structure shifts from high-margin WLCSP products towards lower-margin traditional packaging products, the scenario of "increased revenue without increased profit" has emerged.
Regulatory "Six Questions," Pointing Directly to Suspicion of Benefit Transfer
In June 2026, the CSRC raised six inquiries in its supplementary materials request for the overseas issuance listing filing submitted by Vanguard Semiconductor.
Among them, the two most critical inquiries directly pointed to suspicions of benefit transfer: First, requiring an explanation of the reasonableness of the share price for new shareholders added within the last 12 months, the reasons for price differences among different shareholders, and providing a clear, conclusive opinion on whether there was any benefit transfer. Second, requiring an explanation of the reasons and rationality for the significant differences in the grant prices of the two equity incentive plans, "Wei Zhu Ye Xin" and "Zhoushan Jicheng," and verifying whether the incentive recipients have any relationship with the company's shareholders, directors, supervisors, and senior management.
Phoenix WEEKLY Finance notes that before the IPO, Li Weicong is the founder, executive director, chairman, and general manager of Vanguard Semiconductor. He directly holds 39.19% of Vanguard Semiconductor's shares and indirectly controls 13.06% and 9.53% of the company's shares through the entities Zhoushan Tuowei and Zhoushan Jicheng, which he controls. Combined, Li Weicong holds approximately 61.78% of Vanguard Semiconductor's shares, possessing absolute control.
It is noteworthy that Zhoushan Jicheng is a platform controlled by Li Weicong as the general partner, primarily serving the core management and early backbones, while Wei Zhu Ye Xin is an employee shareholding platform with broader coverage.
"This implies a risk that the granting and implementation of certain equity incentives could be influenced through these platforms, which might also be one of the reasons why the CSRC questioned the huge price difference between the two equity incentive grants," said a chairman of a marketing consulting firm who has long followed the semiconductor industry chain to Phoenix WEEKLY Finance. From the available information, Zhoushan Jicheng has a control relationship with Li Weicong, while Wei Zhu Ye Xin, as an employee platform, needs verification regarding whether it includes related parties. The CSRC's requirement for a legal opinion on this matter is precisely to ensure the objectivity of the selection criteria and procedural compliance for incentive recipients.
Regarding issues such as the reasonableness of the pricing for new shareholders, Phoenix WEEKLY Finance sent a written interview request to Vanguard Semiconductor's board of directors. As of the time of publication, no response has been received from the company.
Simultaneously, the CSRC requested a description of the complete and specific content and termination clauses of the company's special shareholder rights arrangements; an explanation of whether the business involves areas restricted by the Negative List for Foreign Investment; verification of whether the shares held by shareholders intending to participate in the "Full Circulation" have any defects such as pledges or freezes; and a detailed itemized breakdown of the specific amounts and proportions of the raised funds to be used for domestic and foreign investment projects.
As of the time of publication, Vanguard Semiconductor has not publicly responded to the CSRC's inquiries.
Major "Cleansing" of Distributors, Reduction of 80% in Three Years
The prospectus shows that from 2023 to the first five months of 2026, Vanguard Semiconductor appointed 33, 33, 30, and 7 new distributors respectively; during the same periods, it terminated partnerships with 17, 539, 47, and 39 distributors respectively. Looking at the number of distributors at the period-end, by the end of May 2026, Vanguard Semiconductor's distributors had decreased from 658 to 103 over three years.
Regarding the specific reasons for terminating cooperation with over 500 distributors that disappeared within two years, the company stated in the prospectus that "most were due to their failure to meet performance assessment standards, and a small portion was due to breaches of contract terms and regional sales restrictions, engaging in sales beyond the designated geographic area without authorization." The company also stated that the inventory levels of terminated distributors were generally low.
In fact, Vanguard Semiconductor's sales are highly dependent on the distributor channel. The prospectus shows that from 2023 to the first five months of 2026, sales achieved through distributors were RMB 524 million, RMB 507 million, approximately RMB 697 million, and RMB 297 million, accounting for 91.0%, 81.3%, 85.7%, and 84.1% of the respective period's revenue.
The company admitted in the prospectus, "Any decline in sales from distributors or the loss of distributors could adversely affect the Company's business, financial condition, and operating results."
While the sales channels underwent drastic adjustments, Vanguard Semiconductor's customer concentration continued to climb. From 2023 to the first five months of 2026, the revenue contribution from the top five customers accounted for 48.7%, 53.8%, 57.6%, and 67.9% respectively. Among them, the largest customer's revenue share rose from 13.8% in 2023 to 29.7% in the first five months of 2026.
Supplier concentration also remains high. From 2023 to 2025, Vanguard Semiconductor's purchases from the top five suppliers accounted for 80.5%, 81.1%, and 72.6% of total purchases, respectively, and still reached 70.1% in the first five months of 2026. This "dual concentration" structure in both upstream and downstream may subject the company to higher transmission risks during industry cyclical fluctuations.
"In reality, increasing customer concentration is common in the semiconductor industry. Gaining key customers often means products enter the mainstream supply chain," the aforementioned chairman of the marketing consulting firm told Phoenix WEEKLY Finance. From the characteristics of the semiconductor industry, customers for power semiconductors are mostly brand manufacturers or OEMs in the consumer electronics and automotive electronics fields, belonging to different segments of the industry chain than shareholders, making direct affiliation less likely.
However, he also emphasized that attention is needed regarding Moqin Intelligent (under Huaqin Technology) holding a 2.12% stake in Vanguard Semiconductor. As a global leading ODM provider, whether Huaqin Technology's affiliation extends to the customer level requires further clarification from the company.
This article is from the WeChat public account "Phoenix WEEKLY Finance," author: Xu Mengyi
