Shanghai, Jan 25, 2026, 09:16 CST — Market closed.
- Hua Hong Semiconductor’s Class A shares ended the session down 0.6%, closing at 139.76 yuan.
- Investors are preparing for a February 10 vote on a share-based acquisition of Shanghai Huali Microelectronics, alongside a distinct fundraising proposal.
- Traders are keeping an eye on pricing terms, potential dilution, and the progress of regulatory approvals.
Hua Hong Semiconductor’s Class A shares on the Shanghai exchange closed 0.6% lower Friday at 139.76 yuan, having traded in a range from 134.04 to 140.12 yuan earlier in the session. 1
Hua Hong’s next big step hinges on its deal calendar. According to a Hong Kong exchange circular dated Jan. 22, shareholders will vote on Feb. 10 to issue RMB shares to acquire 97.4988% of Shanghai Huali Microelectronics Corp, a 12-inch wafer foundry, for roughly 8.27 billion yuan. The payment involves issuing about 190.8 million shares at 43.34 yuan apiece. The circular also details a “non-public issuance” — akin to a private placement — aiming to raise up to 7.56 billion yuan in support funds. Pricing here is tied to a 20-day average, but won’t fall below 52 yuan, the IPO price. Innovax Capital, the Hong Kong independent financial adviser, noted: “The recent share price movement does not affect the underlying valuation.” 2
The key issue now is straightforward: this is about capital and control, not just a product update. Issuing new shares brings dilution risk, and the price dynamics are crucial since Hua Hong’s A-shares have been swinging widely from day to day, making the discount calculations impossible to overlook.
A Shanghai filing detailed the process for onshore holders, setting Feb. 4 as the A-share record date. It also included a “whitewash waiver” — allowing a controlling shareholder to dodge a mandatory takeover offer if its stake rises post-issuance — plus other related-party voting restrictions. 3
The Shanghai Stock Exchange’s announcements page showed Hua Hong’s notice to hold its first extraordinary general meeting of 2026, alongside a disclosure about a plan to issue A-shares to select investors. This forms the core of the private-placement move, and traders will be digging into the details when the market reopens. 4
The proposed acquisition also heightens the competitive landscape. Adding a 12-inch foundry operation would boost scale and capacity in specialty processes, a battleground where domestic firms are scrambling for market share as clients seek supply chain diversification.
The sector mood remains volatile. Nvidia CEO Jensen Huang was reportedly in Shanghai on Saturday, sources say, while the company awaits Beijing’s decision on whether it can sell its H200 AI chip in China. Chinese customs officials have been told the chip isn’t allowed into the country, though it’s uncertain if that constitutes an official ban. 5
The downside scenario is clear. The deal requires several approvals plus shareholder consent, and the fundraising hinges on market conditions and final pricing. Any delays, altered terms, or investor concerns over dilution might pressure the stock through February.
Trading picks up again Monday, with investors eyeing new filings that could narrow the timeline and clarify pricing. Any changes in chip-policy headlines will also draw attention. The key dates ahead are the Feb. 4 record date and the Feb. 10 shareholder meeting.
