Hygon Information Technology Co., Ltd., a leading CPU company based in China, on August 12 was listed to Shanghai’s STAR Market at an issue price of 36 yuan ($5.34) per share. As of 2:00 pm on August 12, its share price had risen by 70.25%, and its market value totaled about 142.2 billion yuan.
Hygon was established in 2014, and is a subsidiary of Zhongke Group, the same as Loongson Technology, another leading CPU company. Soon after its establishment, Hygon received angel investment from listed companies under the Chinese Academy of Sciences, such as Sugon and CAS Holdings.
Through this IPO, Hygon plans to raise 9.148 billion yuan, mainly for the R&D of a new generation of general-purpose processors and coprocessors, as well as the construction of advanced processor technology R&D centers, and reserve funds for sci-tech development.
Hygon’s main business comes from CPUs and DCUs, and CPU is its main source of income.
Hygon’s CPUs mainly aim to meet the requirements of general-purpose processor application scenarios such as complex logic computing and multitask scheduling, and is compatible with the international mainstream x86 processor architecture Hygon technical route. At present, Hygon has three series of CPU products, namely Haiguang 7000 for complex application fields such as data centers and cloud computing, Hygon 5000 for low-end servers in information construction for government affairs, enterprises and education fields, and Hygon 3000 for entry-level computing fields such as workstations and edge computing servers.
During the reporting period, Hygon achieved its first profit in 2021. From 2019 to 2021, the firm’s revenues were 379 million yuan, 1.022 billion yuan and 2.31 billion yuan respectively, and its net profits were -137 million yuan, -83 million yuan and 438 million yuan.
At present, major companies engaged in the R&D and sales of CPUs and GPUs include Intel, AMD, Nvidia, HiSilicon, and more. In China, such companies include Montage Technology, Cambrian, Ingenic and Loongson Technology in China. In comparison with peer companies in the same industry, Hygon’s comprehensive gross margin in 2021 is essentially the same as the industrial average, according to available data.