IPO News | Backed by cornerstone investments from top-tier institutions like Alibaba! Montage Technology launches its IPO, with a planned listing on February 9. The subscription amount for one lot is HKD 10,796.8.

Futu News reported on January 30th, $MONTAGE TECH (06809.HK)$ an announcement was made regarding the offering from January 30 to February 4. The company plans to globally offer approximately 65.89 million shares, with an expected listing date of February 9, 2026.

Company Overview

Montage Technology is a world-leading fabless integrated circuit design company, committed to providing innovative, reliable, and energy-efficient interconnect solutions for cloud computing and AI infrastructure. The company focuses on addressing challenges in data exchange and transmission, making data interconnection more efficient and reliable. By combining this strategic goal with continuous substantial R&D investment, the company has established and maintained its market leadership in the field of DDR4, DDR5, and future generations of memory interface chips. The company is expanding its expertise into PCIe/CXL interconnects and new types of interconnect chips to further consolidate its leading position.

With over two decades of accumulated expertise and a focus on solving data transmission and interconnection challenges, according to Frost & Sullivan, Montage Technology has become the world's largest memory interconnect chip supplier by revenue, capturing a 36.8% market share in 2024. The company’s DDR memory interface chips and companion chips are designed to achieve optimal performance, bandwidth, and reliability, accelerating data transfer speeds and ensuring consistent performance across enterprise and cloud servers. In the field of memory interconnects, the company has gained a critical first-mover advantage by setting and leading industry standards.

Leveraging its technical expertise and know-how in interconnect solutions, the company has also independently developed innovative technologies such as high-speed SerDes serial interfaces and expanded into PCIe and CXL high-speed interconnect fields. These technologies comply with the standards and specifications set by PCI-SIG and the CXL Consortium. According to Frost & Sullivan, Montage Technology is one of the world’s two major PCIe Retimer providers and was the first company to launch the CXL MXC chip.

Financial Overview

In 2022, 2023, and 2024, Montage Technology recorded revenues of RMB 3,672.3 million, RMB 2,285.7 million, and RMB 3,638.9 million, respectively. During the same periods, the company’s gross profits were RMB 1,705.5 million, RMB 1,346.5 million, and RMB 2,115.3 million. Meanwhile, the company's annual/period profits were RMB 1,299.4 million, RMB 451.1 million, and RMB 1,340.7 million, respectively.

Source: Prospectus

Industry Overview

High-speed interconnect chips are essential for enabling high-speed data exchange in data centers, servers, and computers, primarily addressing bottlenecks in various types of data transmission amid the continuous upgrade of intelligent computing power systems. These chips are compatible with multiple standardized communication protocols and ensure efficient and reliable data transmission across systems through signal processing and architectural optimization.

Memory interconnect chips are core components that enable high-speed data transfer and reliable memory access. Traditional product portfolios include memory interface chips (RCD/DB) and memory module companion chips (SPD, TS, PMIC). With the development of AI and big data applications and the evolution of related technologies, memory interconnect chips have given rise to new categories that meet advanced computing demands, including high-bandwidth memory interface chips (MRCD/MDB) for server memory modules and clock driver chips (CKD) for PC memory modules.

From 2020 to 2024, global memory module shipments grew from 158.2 million units to 170.4 million units. By 2030, this figure is expected to climb to 306.6 million units, with a compound annual growth rate of approximately 10.8% between 2025 and 2030, indicating robust growth. In terms of market structure, server memory modules are rapidly transitioning to the DDR5 generation: DDR5 began downstream adoption in 2021 and by 2024 its penetration rate had exceeded 50%, with expectations to surpass 85% by 2025. Additionally, DDR6 memory modules are anticipated to achieve commercial application around 2029, injecting new growth momentum into the market.

Cornerstone Investor

Cornerstone investors have agreed to subscribe for, or cause their designated entities to subscribe for, shares worth approximately $450 million (or approximately HK$3.509 billion) at the offering price, subject to certain conditions. Assuming an offering price of HK$106.89 per H-share (the indicative maximum offering price stated in this prospectus), the total number of shares subscribed by cornerstone investors will be 32,828,000. The cornerstone investors include: JPMIMI, UBS AM, Yunfeng Capital, Alisoft China, Aspex, Janchor Fund, abrdn Asia, among others.

JPMIMI is a wholly-owned subsidiary of the investment management firm JPMorgan Asset Management Holdings Inc., which is ultimately wholly owned by $JPMorgan (JPM.US)$Wholly owned.

UBS AM is a wholly-owned subsidiary of UBS Asset Management AG, an investment management company that is wholly owned by $UBS Group (UBS.US)$ UBS Group, a company incorporated under Swiss law, has issued common shares to investors.

Alisoft China is a limited company registered in Hong Kong and an indirect wholly-owned subsidiary of $BABA-W (09988.HK)$ Alibaba. Alisoft China serves as the holding company for several of Alibaba Group’s Chinese subsidiaries, primarily engaged in cloud computing operations.

Source: Prospectus

Use of Proceeds

Regarding the use of proceeds, Montage Technology expects the net proceeds from the global offering to be approximately HKD 6.905 billion (assuming the over-allotment option is not exercised and based on the maximum offer price of HKD 106.89). According to the prospectus, Montage Technology plans to allocate the proceeds from the global offering for the following purposes:

Approximately 70% will be used over the next five years to invest in R&D for interconnect chips, enhancing the company’s global leadership position and seizing opportunities in cloud computing and AI infrastructure; about 5% will be allocated to improving the company’s commercialization capabilities; roughly 15% will be used for strategic investments and/or acquisitions to achieve the company's long-term growth strategy; and about 10% will be utilized for working capital and general corporate purposes.

More reading:Lianqi Technology Prospectus

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