Soaring 30 times, a Shenzhen father-daughter team made 11.2 billion yuan in annual revenue by selling storage products, and is launching an IPO on the Hong Kong Stock Exchange

In the first four months of 2025, HYX's net profit was only 123 million yuan, with a gross margin of less than 14%. 

No one expected that a year later, the same financial report would show completely different figures: net profit hit 3.841 billion yuan, surging 30 times; gross margin jumped to 62%, a figure rarely seen across both the A-share and Hong Kong stock markets. 

A storage intermediary with no fabs and no chip design capabilities managed to generate profits comparable to those of a hardcore technology company in the spring of 2026. 

Shenzhen-based HYX recently updated its prospectus in preparation for a Hong Kong stock listing. 

What profit opportunities lie behind HYX's explosive profit growth? Find out in the Pencil News Opportunity Intelligence System: Spend 5 minutes discovering the profit signals hidden behind breaking news.

Behind the Windfall

Wu Yisheng, founder of HYX, was born in 1969. With over 20 years of experience in the storage industry, he previously served as general manager at companies including Shenzhen Hongkexin, Gloway, and Barolay. 

In 2018, he partnered with Phison Electronics, a Taiwan-based controller chip manufacturer, to establish HYX in Shenzhen, focusing on DRAM and NAND storage chip distribution and simple module packaging. Later, his daughter Wu Jiamin joined the company, forming a father-daughter team in the storage sector. 

For the first seven years, the business operated on thin margins—without owning fabs or doing chip design, it essentially functioned as an intermediary in the storage industry. 

In 2023, it recorded revenue of 8.781 billion yuan and net profit of approximately 465 million yuan; in 2024, revenue reached 8.718 billion yuan with net profit around 467 million yuan, translating to a profit margin of only about 5%. In 2025, revenue hit 11.238 billion yuan, with net profit reaching 1.364 billion yuan. 

Leveraging the founder's long-accumulated channel resources and industry cycle judgment, the company gradually built a nationwide supply system, ensuring stable deliveries to domestic hardware manufacturers and cloud service provider clients. 

The real turning point came in the second half of 2025. 

The company anticipated a sharp rise in storage chip prices, so it proactively adjusted its strategy—scaling up inventory holdings, locking in supply quotas from upstream original manufacturers, and stockpiling large volumes of products. This bet paid off completely. 

In the first four months of 2026, spot prices for server DDR5 and AI-specific storage doubled and surged, with persistent market shortages. Holding massive low-cost inventory, HYX shipped large volumes at peak market prices. 

Prospectus data shows: while the net profit in the same period the previous year was only 123 million yuan, it skyrocketed to 3.841 billion yuan in the first four months of 2026, representing a surge of over 30 times; gross margin jumped directly from 13.8% to 62%, hitting an all-time high. 

This sudden performance leap was purely the result of low-cost inventory purchases coinciding with the price rally. 

HYX was able to seize this market momentum thanks to three key areas of accumulated strengths: 

First, its asset-light model eliminates the need for heavy capital expenditure on fab construction, giving it far greater profit flexibility during an upward cycle than companies that develop chips in-house; 

Second, its years of industry channel resources allow it to reliably connect with ChangXin Memory Technologies, Yangtze Memory Technologies, and overseas original manufacturers, securing supply quotas for scarce chips; 

Third, the 2026 Hong Kong stock listing window for hard-core technology companies was booming, with the capital market offering significant valuation premiums to the chip sector. 

Storage Sector Dividends in Full Swing

Behind HYX's strong performance lies the combined release of three layers of dividends in the storage industry. 

The First Dividend: Explosive AI computing power turns storage from an accessory into a necessity.

An AI server uses 8 times more memory than a regular server and 3 times more flash storage than a traditional server. In 2026, global AI server shipments continue to double year-over-year, with dozens of domestic 10,000-GPU intelligent computing clusters being successively deployed and put into operation, driving a continuous surge in storage procurement demand. 

The Second Dividend: Original manufacturers shift production capacity, leading to persistent spot shortages.

Samsung, Micron, and SK Hynix are all prioritizing their production capacity for higher-margin HBM high-end memory, drastically reducing supply of regular server DDR and enterprise SSD products. With demand skyrocketing on one hand and supply contracting on the other, distributors holding inventory are directly reaping the benefits of the industry cycle. 

The Third Dividend: Domestic substitution.

IDC data shows that in 2025, domestic chips and domestic storage already accounted for 41% of China's AI server market. ChangXin Memory Technologies secured a 20 billion yuan long-term DRAM supply contract with Tencent, while Yangtze Memory Technologies is steadily ramping up production capacity, breaking the long-standing overseas monopoly. 

Domestic A-share peers also confirm the sector's booming momentum. Jiangbolong recorded full-year 2025 revenue of 22.766 billion yuan, with attributable net profit of 1.423 billion yuan, representing a 185% year-over-year increase; Baiwei Storage posted 11.302 billion yuan in revenue over the same period, with attributable net profit of 853 million yuan, a 429% year-over-year surge. 

With three layers of dividends overlapping, HYX generated record-high profits in just the first four months of the year. 

The key question remains: how long can this cyclical dividend in the storage industry last? 

HYX Hong Kong Stock IPO Prospectus Source: Publicly Available Information 

Risks Behind the Dividends

The storage industry follows a widely recognized iron law: a complete cycle of price rises and falls occurs every 3 to 4 years, and no company can escape this pattern. 

HYX's current ultra-high gross margin of 62% simply means it is standing at the peak of the cycle. Multiple institutions predict that new production capacity from overseas storage giants will be fully launched in 2028, at which point prices will reverse and head downward. 

Apart from the approaching peak of the industry cycle, HYX faces four additional inherent risks. 

Risk 1: Weak core technological capabilities.

The company's chip design capabilities are not its strength, as it lacks wafer manufacturing production lines and core intellectual property. The capital market follows a straightforward valuation logic—companies with in-house developed technologies like Cambricon and ChangXin Memory Technologies can command higher premiums as tech stocks. 

Risk 2: Inventory risks.

This round of windfall profits came from inventory price appreciation, but inventory also represents the biggest future risk. Once prices trend downward, the accumulated spot inventory will immediately trigger massive asset impairment. During industry downturns, a single inventory write-down can wipe out an entire year's profits for a company. 

Risk 3: Unbalanced business structure.

Nearly all of the company's revenue comes from storage distribution, with no self-owned brand, no in-house developed modules, and no technical service offerings. It can see explosive profit growth during favorable market conditions, but has no business lines to hedge risks when the market turns sour. 

Risk 4: Limited bargaining power.

If original manufacturers reduce supply quotas or raise prices, HYX's procurement costs will rise directly, rapidly squeezing its gross profit margins. Admittedly, this is not a problem unique to HYX. 

The content in this article is for reference only and does not constitute investment advice. 

This article originates from the WeChat Official Account "Pencil News" (ID: pencilnews), authored by Song Ge, and published by 36Kr with authorization.