Net profit has skyrocketed by 3020%, a Shenzhen-based father and daughter have just completed their IPO.

Founded 31 years later than Kingston, the industry leader, this Shenzhen enterprise has secured a position among the world's top five independent memory manufacturers in less than 8 years.

On November 12, Shenzhen Hongxinyu Electronics Co., Ltd. ("Hongxinyu") was officially listed on the Hong Kong Stock Exchange with the stock code 02681.HK. On the first trading day of its listing, the opening price stood at HK$72.8, corresponding to a market capitalization of about HK$35 billion.

Riding on a wave of price hikes for memory chips, Hongxinyu's profits have grown significantly. According to its prospectus, in the first four months of 2026, the company's net profit reached 3.841 billion yuan, a year-on-year increase of 3020.8%, which is nearly three times the total profit of 2025, with an average daily net profit of about 32 million yuan.

Founder Wu Yisheng is 56 years old this year and has been working in the chip industry for more than 25 years. His 32-year-old daughter Wu Jiamin, who studied jewelry design and appraisal in her early years, once served as the company's purchasing manager and chairman assistant, and is now an executive director.

Along the way, Hongxinyu has also attracted many investors. Phison Electronics, Ting Hsin Group, SMIC PE, Kunqiao Capital, as well as local state-owned capital from Hefei and Shenzhen have successively invested in the company. For this IPO, the company also introduced 7 cornerstone investors with a total subscription of about HK$452 million, including peer memory manufacturer Jiangbolong and mobile phone maker Transsion Holdings.

A Shenzhen Father and Daughter Built a Dark Horse in the Memory Industry

Wu Yisheng is a veteran in the memory industry from Taiwan, China.

As early as 1999, he was engaged in businesses related to electronic components and chips in Shenzhen. In the nearly 20 years that followed, he successively served as general manager at enterprises including Shenzhen Hongkexin, Gloweiss and Barilai, and also served as a director of Biwin Storage from 2016 to 2019.

In December 2018, he founded Hongxinyu in Shenzhen, and brought in an old partner — Phison Electronics, a memory control chip manufacturer from Taiwan, China. Phison was founded by Pan Jiancheng and others. Its team developed the world's first single-chip USB flash drive controller, and Pan Jiancheng is thus known as the "Father of USB Flash Drives".

Phison has been deeply involved in the development of Hongxinyu from the very beginning. According to the prospectus, when the company was established, Ruiyuan Investment under Phison held 40% of the shares. After multiple rounds of financing, the shareholding ratio of Phison and its related parties dropped to 22.5%, but it is still the largest external shareholder of the company. In addition to capital contribution, Phison also provides memory products, control chips and related technology licenses.

Starting with Phison's technical resources, Hongxinyu has gradually built up its own R&D capabilities. Now, the company has self-developed control chips that have entered mass production, and another eight models are at different stages of R&D.

When Wu Yisheng started his business, he had another helper — his daughter Wu Jiamin.

Different from her father, Wu Jiamin did not study chips at first. In 2015, she graduated from Zhujiang Polytechnic with a major in jewelry design and appraisal, and once worked at the Shenzhen branch of JLL after graduation.

In December 2018, she joined the newly established Hongxinyu, successively served as purchasing manager and chairman assistant, and was transferred to executive director in December 2025 to assist her father in managing the company's operations.

The father and daughter's business has developed rapidly.

In 2020, Hongxinyu's revenue exceeded 100 million US dollars. It entered the supply chains of Transsion and OPPO in 2021, entered Xiaomi's supply chain in 2022, and then entered vivo's supply chain in 2024. By 2025, the company's annual revenue reached 11.238 billion yuan.

In less than eight years, Hongxinyu achieved an annual revenue of over 10 billion yuan.

This is largely related to its business model.

Different from enterprises with upstream wafer manufacturing capabilities such as Samsung, SK Hynix, Micron, as well as domestic Changxin Memory and YMTC, Hongxinyu mainly purchases memory wafers, combines control chips, firmware algorithms and testing technologies to develop memory products for devices such as mobile phones and computers, and outsources some links such as manufacturing, packaging and testing to third parties.

This relatively asset-light model allows Hongxinyu to rapidly expand its business without spending huge sums of money to build its own wafer fabs. But this also means that the stable supply of raw materials and changes in procurement costs are critical to the company's operations.

Net Profit Reached 3.8 Billion Yuan in Four Months, Who Made the Money?

What really surprises people about Hongxinyu is its profit performance in 2026.

In 2023, Hongxinyu recorded a revenue of 8.781 billion yuan and a net loss of 117 million yuan; in 2024, its revenue was 8.718 billion yuan, and its net profit turned positive to 483 million yuan; in 2025, its revenue further increased to 11.238 billion yuan, and its net profit reached 1.364 billion yuan.

In 2026, the speed of making money accelerated.

In the first four months alone, Hongxinyu's net profit reached 3.841 billion yuan, a year-on-year increase of more than 30 times. In the same period, the comprehensive gross profit margin also rose from 13.8% in the same period of the previous year to 62%.

Why is a memory enterprise suddenly so profitable?

The answer lies in the price of memory chips.

According to the prospectus, from the first four months of 2025 to the same period in 2026, the average selling price per GB of Hongxinyu's DRAM products rose from 12.24 yuan to 34.98 yuan, and the average selling price per GB of solid-state drives rose from 0.28 yuan to 0.93 yuan.

DRAM is mainly used for temporarily storing data when programs run on mobile phones and computers, while solid-state drives are responsible for long-term storage of information such as files.

The memory industry has always shown obvious cyclical characteristics. When supply is sufficient, prices may continue to fall; once the market is short of supply, prices can rise rapidly.

This time, AI has become an important driving force.

According to TrendForce's analysis, with the rapid growth of demand for AI servers, upstream manufacturers such as Samsung, SK Hynix and Micron have shifted more production capacity to high-bandwidth memory (HBM) and server-related products, and the supply of ordinary DRAM and NAND flash memory has tightened accordingly.

Hongxinyu just caught up with this market boom. For enterprises that purchase wafers from upstream and then develop them into products for sale, especially raw materials bought at lower prices in the past, the price hike can bring higher profits.

However, to seize the opportunity of price increase, you must have sufficient inventory first.

Hongxinyu has spent a lot of money on stocking up. According to the prospectus, at the end of 2025, the book value of the company's inventory was about 7.172 billion yuan, and it increased to 10.887 billion yuan by the end of April 2026, an increase of about 3.715 billion yuan in four months.

As Hongxinyu is listed on the Hong Kong Stock Exchange, investors who bet on it in the early years are expected to receive considerable book returns.

From 2020 to 2025, Hongxinyu successively completed multiple rounds of equity financing from Round A to Round D, and its post-investment valuation rose from 816 million yuan after Round A in 2020 to 10.76 billion yuan after Round D in March 2025. Institutions including SMIC PE, Kunqiao Capital, TCL Ventures, Shenzhen Gaoxin Investment and Hefei Industrial Investment have successively invested in the company.

Founder Wu Yisheng controls a total of about 36.68% of the voting rights through multiple shareholding platforms.

The largest external shareholder is still Phison Electronics. In 2018, Ruiyuan Investment under Phison subscribed 40 million yuan to obtain 40% of the shares. In 2024, Phison transferred part of its shares for about 1.226 billion yuan. According to Phison's announcement at that time, the transaction was expected to bring a pre-tax investment income of about 44 billion New Taiwan dollars.

Even so, Phison still held 22.5% of Hongxinyu's shares before listing. Estimated at the issue price of HK$72.83 per share and the exchange rate on November 11, the theoretical value of this part of the shares is about 6.57 billion yuan.

Among the investors who took over the shares transferred by Phison are the Wei family of Ting Hsin behind Master Kong. Wei Junjie, son of Wei Ying-chou from Ting Hsin Group, participated in the investment through a related investment platform. In 2024, its related company Future Pafi spent about 818 million yuan to buy Hongxinyu's shares. Now estimated at the issue price, the theoretical value of its shareholding is about 2.22 billion yuan, an increase of about 1.4 billion yuan compared with the purchase cost.

Several institutions with Anhui state-owned capital background have also gained returns. Hefei Guoyao, Hefei Industrial Investment and Guoyuan Innovation invested a total of about 102 million yuan. According to the same estimation standard, the theoretical value of their shareholding is now about 302 million yuan, an increase of about 200 million yuan compared with the original investment.

Of course, the shareholding value and appreciation estimated at the issue price do not represent the realized returns, and the actual returns depend on the future exit price.

In addition to early shareholders, Hongxinyu also has mutual investments with enterprises in the industrial chain.

In September this year, Jiangbolong was listed on the Hong Kong Stock Exchange, and a subsidiary of Hongxinyu participated in the cornerstone investment with HK$56 million. A month later, Transsion Holdings was listed on the Hong Kong Stock Exchange, and Hongxinyu Hong Kong subscribed for its shares with HK$40 million.

When it was Hongxinyu's turn to go public, Jiangbolong and Transsion invested in it in turn. Jiangbolong Investment under Jiangbolong and Transsion International under Transsion both became cornerstone investors of Hongxinyu, with 851,600 shares and 1,066,100 shares allocated respectively, worth about HK$62.02 million and HK$77.64 million at the issue price.

Peer Stock Prices Have Dropped by 70%, How Long Will the Memory Boom Last?

The price hike of memory chips is still ongoing, but the capital market has shown different reactions.

As of the close of trading on November 11, 2026, Jiangbolong's A-share price stood at 231.29 yuan, down about 69% from the intraday high of 749.88 yuan on July 1; Biwin Storage closed at 139.03 yuan, down about 73% from the intraday high of 516.58 yuan on June 26.

Although stock prices have fallen sharply from their highs, the enterprises are still very profitable.

According to the third-quarter reports of the two companies, in the first three quarters of this year, the attributable net profit of Jiangbolong reached 14.322 billion yuan, a year-on-year increase of nearly 20 times; that of Biwin Storage reached 8.768 billion yuan. However, looking at the third quarter alone, the net profits of the two companies were 3.745 billion yuan and 1.602 billion yuan respectively, down about 44% and 62% month-on-month.

Why did the stock prices fall from their highs when the companies made so much money in the first three quarters?

An important reason is that the market began to worry about how long the high profits brought by this round of memory price hike will last.

Jiangbolong mentioned in its third-quarter report that the global memory market was still in short supply in the third quarter, but the price increase range of DRAM and NAND flash has narrowed compared with before, and the additional driving effect of wafer price hikes on the company's profitability is also weakening.

On the other hand, downstream consumer markets such as mobile phones and computers are also under pressure.

According to IDC data, in the third quarter of 2026, global smartphone shipments were about 255 million units, down 22% year-on-year; global PC shipments were about 62.7 million units, down 20.1% year-on-year.

This is particularly noteworthy for Hongxinyu — although AI has driven this round of memory price hikes, Hongxinyu's business currently mainly comes from consumer electronics.

According to the prospectus, in the first four months of 2026, about 99% of the company's revenue came from consumer-grade memory products, the proportion of enterprise-level business was only about 1%, and the proportion of automotive-grade business was still very low. In the same period, the revenue from products finally applied to AI-related fields was about 80.8 million yuan, accounting for about 1% of the total revenue.

At present, demand in different markets is showing differentiation.

According to TrendForce's forecast on September 30, 2026, in the fourth quarter of 2026, the contract price of conventional DRAM is expected to rise by 10% to 15% month-on-month, and NAND flash memory will rise by 15% to 20%. Among them, enterprise-level solid-state drives are supported by demand from cloud service providers, with strong price increase momentum; demand in consumer-grade markets such as mobile phones and computers is relatively weak.

For Hongxinyu, how to further expand markets such as servers, data centers and automobiles beyond consumer electronics will be the issue it needs to consider next.

According to data from Frost & Sullivan, calculated based on revenue in 2025, Hongxinyu is the fifth largest independent memory manufacturer in the world and the second largest in Chinese mainland, second only to its domestic peer Jiangbolong. The world's top one is Kingston, and the other two top five enterprises are Phison Electronics and ADATA.

Hongxinyu, founded in 2018, is the youngest of the five enterprises. However, in the entire memory market including upstream giants such as Samsung, SK Hynix and Micron, its global market share is still only about 0.6%.

According to the prospectus, Hongxinyu plans to use part of the funds raised from the listing for memory product development, control chip R&D and testing capacity building, and continue to expand enterprise-level and automotive-level markets.

Conclusion

Eight years ago, Phison brought capital and technology to participate in Hongxinyu's entrepreneurship. Today, Hongxinyu and Jiangbolong have become each other's cornerstone investors when they go public.

Competitors can also become partners. This is probably the epitome of the development of China's memory industry up to now.

This article is from the WeChat official account "Rongzhong Finance" (ID: thecapital), written by Li Bingzhi, edited by Wu Ren, and published with authorization from 36Kr.