Not only China’s largest memory manufacturers, represented by Changxin Memory and Yangtze Memory, are preparing or have already gone public this year. Longsys Electronics, founded in 1999, is ready to follow their lead and is expected to raise $801 million in an IPO as early as next week, according to Bloomberg.
Image source: Longsys Electronics
Longsys shares are already traded on the Shenzhen stock market, but the company will list in Hong Kong this month, offering investors about 26 million shares of its own stock, sources said. In Hong Kong dollars, the issue price (HK$240.6 per share) will be 45% lower than the closing price of Shenzhen trading last Friday. The issuer’s filing states that, taking into account options, the amount raised could exceed $1 billion at current exchange rates. The memory maker has a capitalization of $24.9 billion.
Longsys expects to use the proceeds for research and development related to creating new types of memory. In the first half of this year, the company’s revenue more than doubled, and its net profit soared more than 700 times. The memory shortage has fueled this dynamic and created favorable conditions for manufacturers to issue shares. Longsys’ main investors plan to purchase a total of 18.89% of the company’s shares and promise not to sell them for at least the next six months. Among them, interestingly, there is a mention of Transsion International, a company related to the smartphone manufacturer of the same name.
Last year, Longsys occupied about 1.2% of the global memory market, and 70% of its revenue already came from outside China. Its clients include Dell and Lenovo, among others, with the latter also being a major investor. Samsung Electronics and Xiaomi are also cooperating with Longsys.
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