YMTC, one of China's leading semiconductor firms, has secured a new funding round with a CNY1.6 billion (approx. US$220 million) capital injection from Quanhong Investment, a subsidiary of Hebei Yangyuan ZhiHui Beverage. Once the deal closes, Quanhong will hold a 0.99% stake in YMTC's parent company. Yicai reports the move aligns with Yangyuan's strategic push into equity investments.
Tencent News noted that the transaction unexpectedly disclosed portions of YMTC's financials, showing a net profit of CNY531 million in 2023, followed by a net loss of CNY84.2 million through the first three quarters of 2024, raising red flags across the industry.
The deal pegs YMTC's valuation at roughly CNY161.6 billion. ICsmart reports that Quanhong's 0.99% stake corresponds to a capital increase that pushed YMTC's subscribed capital from CNY105.27 billion to CNY111.81 billion, generating about CNY9.42 billion in new funding.
YMTC's net assets climbed from CNY132.6 billion at the end of 2023 to CNY134.7 billion by the third quarter of 2024, suggesting a stable asset base despite near-term losses.
Fifteen other institutions joined Quanhong Investment in the round, including units of Agricultural Bank of China, China Construction Bank, Bank of Communications, and Bank of China—each securing roughly 0.62% stakes. The addition of 16 new investors, many from the private sector, adds diversity to YMTC's shareholder base and supports its market-oriented structure.
Yangyuan cautioned that the investment involves risks tied to industry cycles, trade tensions, technology shifts, asset depreciation, and margin volatility, making future returns uncertain.
Tsinghua Unigroup collapse leaves questions over YMTC's future
Founded in 2016 as a subsidiary of Tsinghua Unigroup, YMTC specializes in 3D NAND flash memory. After Unigroup's financial collapse and bankruptcy filing in Beijing, YMTC was separated during the 2022 restructuring and is now held by the state-owned Hubei Science and Technology Investment Co., Ltd. through YMTC Holding.
YMTC remains on the US Entity List, limiting its access to advanced equipment and essential materials—an ongoing obstacle to scaling its technology and production capabilities.
YMTC Holding also oversees subsidiaries including XMC, which is preparing for an IPO; Unimos Microelectronics (Shanghai) Co., Ltd., in which it holds nearly 51%; Changcun Capital; and a 39.5% stake in Yangtze Advanced Memory Industrial Innovation Center.
ICsmart estimates XMC's valuation at roughly CNY19.2 billion, with Unimos and other holdings valued in the billions, highlighting the scale and complexity of YMTC Holding's asset portfolio.
Observers often conflate YMTC with its parent, but YMTC is just one part of a broader portfolio. As such, YMTC Holding's CNY161.6 billion valuation shouldn't be interpreted as YMTC's standalone worth.
Mixed operating performance, with YMTC suspected as the main drag
Analysts suggest YMTC's struggles may be weighing down the group's overall performance, even as XMC maintains steady growth. Ongoing US export restrictions and global competition are likely to keep YMTC under pressure in the near term.
Still, with XMC's IPO progressing and YMTC Holding raising CNY9.42 billion in fresh capital, YMTC may benefit from renewed strategic and financial backing.
Article edited by Jack Wu
