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Key Takeaways:
Longsys has applied to list in Hong Kong, reporting its profit surged nearly sevenfold last year to nearly 1.5 billion yuan
The memory product maker's short-term bank liabilities reached 6.1 billion yuan last year, nearly double the level from 2023
What does it take to become a dragon? If your name is Longsys Electronics Co. Ltd. (301308.SZ), the answer is simply being in the right place at the right time. In this case, Longsys just happens to be right in the middle of a red-hot market for memory chips and related products, which have lately become investor darlings on spiking prices as the latest group of AI concept stocks.
Memory chips are playing a pivotal role as AI looks poised to dominate the future, making stocks of related companies into hot commodities. Shares of GigaDevice (3986.HK; 603986.SH) have more than quadrupled since their IPO in January, while Montage Technology (6809.HK; 688008.SH) has nearly tripled since its debut a month later. Longsys' Shenzhen-listed A-shares have done equally well, skyrocketing more than sixfold over the past year.
The company's Hong Kong listing attempt follows a recent pattern that has seen many Chinese firms already listed on domestically-focused markets in Shenzhen and Shanghai making second listings in Hong Kong to target the city's more international investor pool.
The late Hong Kong stock commentator Cho Yan Chiu once famously remarked that "Riding the momentum beats relying on wisdom." Longsys perhaps understands this best. Its initial Hong Kong listing application stumbled last year. But that may have worked to its advantage, as memory stocks have soared this year in tandem with soaring memory chip prices. Sensing an opportunity, the company refiled its listing application with the Hong Kong Stock Exchange at the end of last month.
Longsys is an independent maker of memory storage products. It was the world's second largest independent semiconductor memory product maker by storage product revenue last year, and ranked first in China, according to third-party market research in its listing document.
That document shows the company's business has been on a strong upward trajectory over the past three years, in tandem with the AI boom. Its revenue more than doubled from 10.13 billion ...
