Amlogic restarts Hong Kong IPO bid amid chip stock frenzy

The Shanghai-listed company hopes to tap strong recent demand for semiconductor stocks fueled by the rapid rise of artificial intelligence

Key Takeaways:

• Amlogic has refiled to list in Hong Kong, reporting a profit of 870 million yuan last year, up from 499 million yuan in 2023
• The chipmaker reported an operating cash outflow of 225 million yuan last year, reversing inflows the previous two years

Lau Chi Hang

The recent AI boom has created strong demand for related chips, turning them into a strategic battleground for major manufacturers. That’s set off a feeding frenzy in the capital markets, as investors seek out the latest chip stocks in hopes of finding the next one that will ride the craze to big business. Seizing on that momentum, chip designer Amlogic (Shanghai) Co. Ltd. (688099.SH) has become the latest chipmaker to throw its name into the hat with its filing of a new application to list in Hong Kong earlier this month.

Amlogic primarily designs system-on-chip (SoC) products, integrating functions like central processing units (CPU), graphics processing units (GPU), memory control, communications, audio/video processing, and AI acceleration onto a single chip. Such products are typically used in smartphones, TVs, set-top boxes, artificial intelligence of things (AIoT) devices, communications and smart vehicles.

Simply put, the SoC’s value lies in its consolidation of multiple functions into one chip, serving as the core enabler for smart devices.

Amlogic’s origins trace back to 1995 when it was registered as Amtek in California. John Zhong became its chairman in 2000, and the company established Amlogic in China in 2003 and listed on Shanghai’s Nasdaq-style STAR Market in 2019. It previously filed for a second listing in Hong Kong last September, but that application ultimately lapsed after six months. Now, it’s seeking to capitalize on the chip fervor with a renewed attempt.

Major investors

Amlogic had an important previous patron in Lei Jun, the charismatic founder of smartphone giant Xiaomi, who invested in the company in 2018, holding a 3.41% stake, before divesting the holding in 2024. Another big-hitter, TV giant TCL, is also an investor, holding 10.16% of the company’s Shanghai-listed shares.

With nearly three decades in SoC design, Amlogic ranked fourth globally among smart device SoC makers by revenue in 2024, with 1.2% of the market, according to third-party market data in its listing document. It led the market in China and ranked second globally in the smart home device SoC segment, commanding roughly 17.7% of the global market.

By the end of 2025, Amlogic’s cumulative integrated circuit (IC) shipments exceeded 1 billion units. Data in the prospectus indicates that in 2024, one in every three smart set-top boxes globally used an Amlogic IC, and one in every five smart TVs featured one of the company’s ICs. Amlogic serves over 270 major global operators, including TV brands like Hisense, TCL and Skyworth, alongside AIoT manufacturers and automakers.

Its revenue has grown steadily over the past three years, rising from 5.37 billion yuan ($787 million) in 2023 to 6.79 billion yuan last year, up 15% from 5.93 billion yuan in 2024. Its profit has also risen steadily from 499 million yuan in 2023 to 870 million yuan last year, with its gross margin rising from 33.2% to 37.8% over that period.

Geopolitical threats

Amlogic’s performance appears solid across most of its major metrics at first glance. But the headline numbers mask a recent stark reversal in the company’s operating cash flow. The company generated 887 million yuan and 950 million yuan in positive operating cash flow in 2023 and 2024, respectively. But then the figure abruptly reversed to an outflow of 225 million yuan last year. This unexpected shift in the face of strong previous inflows may have left some investors scratching their heads.

Amlogic explained it owed to revisions for payment arrangements to certain key wafer suppliers that necessitated a significant 365 million yuan increase in merchandise prepayments. The company stated it took that step to ensure its supply chain stability.

As a semiconductor designer reliant on foundries to make its chips and third parties to supply its design software and other R&D tools, Amlogic also noted that it faces risks as some of those suppliers are subject to U.S. export controls aimed at Chinese companies. Such issues are ultimately a product of geopolitics, casting a long-term cloud over the company’s business, finances and operating results.

Fierce market competition

Equally pressing as its geopolitical challenges is good old fashion competition. Taiwan’s MediaTek (2454.TW) and U.S.-based Qualcomm (QCOM.US) dominate the global SoC market with advanced technology and massive scale. In China, Rockchip Electronics (603893.SH) is considered the industry bellwether, highly regarded for its big growth potential. Then there’s Huawei’s HiSilicon chip unit, which is seen as a primary beneficiary of strong policy support from Beijing. Among such giants, Amlogic looks mostly like a niche leader within certain segments of the SoC market.

MediaTek currently trades at a price-to-earnings (P/E) ratio of around 26 times, while Qualcomm is slightly higher at about 27 times. Rockchip sits above both of those with a premium of 69 times, buoyed by its high-growth narrative. While Amlogic’s Shanghai-listed shares trade at 39 times, its scale is smaller than MediaTek or Qualcomm, and its growth profile less compelling than Rockchip. Nevertheless, Hong Kong shares of dual listed companies have been getting strong multiples lately, similar to their Mainland counterparts. That means Amlogic’s Hong Kong shares could trade at a similar level to their Shanghai counterparts, perhaps fetching a P/E ratio between 35 and 40 times.

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