On January 28, 2026, Hefei Kuxin Microelectronics Co., Ltd. (referred to as "Kuxin Micro" or "the Company") submitted a listing application to the Main Board of the Hong Kong Stock Exchange, with Huatai International acting as the sole sponsor.

During its Series C funding round, a co-founder of Kuxin Micro transferred 657,700 shares to five shareholders, including GigaDevice and Hefei Shixi, for a consideration of zero yuan. Based on the subscription price per share for the new registered capital during the same period, the value of these shares exceeded 70 million yuan.

Financial data shows that in the first three quarters of 2025, Kuxin Micro's revenue growth stalled, showing a slight year-on-year decline. Although adjusted net profit turned positive, operating cash flow deteriorated significantly, plummeting by 1,196.10% year-on-year and turning negative. During the reporting period, the total equity-settled share-based compensation expenses recognized by Kuxin Micro amounted to 117 million yuan, with over half allocated to CFO Xu Wei.

**Founder Transferred Shares for Zero Consideration**

Kuxin Micro was established in July 2011 and is dedicated to providing high-performance self-developed core chips for innovative technology sectors. The company leverages three core technologies—intelligent perception (self-developed high-performance ISP), intelligent computing (self-developed high-performance, low-power NPU), and intelligent transmission (dedicated wireless communication baseband and RF)—to empower industrial intelligent upgrades through communication and edge-side chips and their solutions.

To date, Kuxin Micro has completed five rounds of financing (referring solely to subscriptions for new registered capital, excluding share transfers), raising a total of 1.11 billion yuan. Investors include Huaxu Guangzhou, Hunan Junxi, Suzhou Fangguang, among others. As of the Series C round, the company's post-money valuation reached 3.34 billion yuan.

During the Series C financing, several shareholders reduced their holdings. In December 2025, seven shareholders, including Shanghai Yingmou, HK Panorama, Yangzhou Xinhao, and Sichuan Chuanhu, collectively sold 1,942,200 shares, cashing out a total of 96.363 million yuan.

Among these transactions, Shanghai Yingmou transferred 657,700 shares in total to six shareholders, including GigaDevice, Hefei Shixi, Hefei Guozheng, Hefei Jianhui, Hunan Junxi, and Shanghai Zhide, for a total consideration of zero yuan. Concurrently, the subscription price per share for the company's Series C financing was 107.98 yuan. Based on this, the value of the shares transferred by Shanghai Yingmou was 71.0157 million yuan.

Kuxin Micro explained that "the consideration was determined based on fair negotiations between the relevant transferors and transferees, taking into comprehensive consideration multiple factors, including the strategic benefits our relevant investors would bring, such as the market recognition and credibility of GigaDevice as a listed company on the Hong Kong Stock Exchange, the industry insights of these relevant investors based on their extensive investment track record and strategic supervision capabilities in the chip industry and other technology sectors to accelerate the Company's growth, and the support of the management team for the Company's long-term development."

According to the prospectus, Shanghai Yingmou is the investment platform for Kuxin Micro's co-founders Yao Haiping, Shen Bo, and Zhong Qi, holding 37.6%, 38.3%, and 24.1% of the platform's shares, respectively. All three serve as executive directors of the company: Yao Haiping is also the Board Chairman and CEO, Shen Bo is the CTO, and Zhong Qi is the COO.

Prior to the IPO, Yao Haiping, Shen Bo, and Zhong Qi are acting in concert. Together with the entities they control, they are entitled to exercise 32.84% of the voting rights of Kuxin Micro. Additionally, GigaDevice holds a 10.36% stake in the company, making it the second-largest shareholder and the largest external investor.

It is important to note that Kuxin Micro had granted certain special rights to pre-IPO investors, including but not limited to redemption rights, priority sale rights, liquidation preferences, preemptive rights, tag-along rights, priority subscription rights, anti-dilution rights, co-sale rights, and information rights. Although the redemption rights were terminated before the company submitted its listing application to the Hong Kong Stock Exchange, they will automatically revive if any of the following events occur: the listing application is rejected, the company withdraws the listing application, or the company fails to complete the public offering by December 31, 2027.

Financial data shows that as of the end of September 2025, Kuxin Micro's redemption liability reached 1.566 billion yuan, approximately 3.8 times its total assets. Consequently, the company faces "technical insolvency," with an asset-liability ratio of 418.75%.

More concerningly, Aixin Yuanzhi, another AI SoC supplier, has already taken the lead by listing on the Hong Kong Stock Exchange on February 10. However, its first-day closing price was HK$28.2, flat with the offer price, and the intraday peak gain was only 3.48%, indicating a tepid market response. On February 11, Aixin Yuanzhi's share price fell further, dropping over 8.3% at the time of writing.

**Revenue Growth Stalls, Operating Cash Flow Deteriorates**

During the reporting periods, Kuxin Micro's revenues were 105 million yuan, 449 million yuan, and 341 million yuan, respectively, with net losses of 308 million yuan, 216 million yuan, and 2 million yuan, respectively.

The primary reasons for Kuxin Micro's substantial losses over the past two years were the changes in the carrying value of the redemption liability and share-based compensation expenses. After adding back these items, the adjusted net profits were -185 million yuan, -9 million yuan, and 47 million yuan, respectively. While the company turned a profit in the first three quarters of 2025, its revenue growth stalled, with a slight year-on-year decrease of 0.60%.

Categorized by product, Kuxin Micro's revenue primarily comes from SoC products and technical services. The latter mainly includes non-recurring engineering, such as product design services and intellectual property income. SoC products are further divided by application scenario into drones, AIoT (Artificial Intelligence of Things), and smart wearables, with revenue contributions roughly at a 6:3:1 ratio.

In the first three quarters of 2025, sales revenue from Kuxin Micro's SoC products was 313 million yuan, a year-on-year decrease of 6.17%. Revenue from the drone segment fell from 234 million yuan to 194 million yuan, a decline of 17.11% year-on-year.

However, although Kuxin Micro's adjusted net profit turned positive in the first three quarters of 2025, its operating cash flow turned negative, indicating a divergence between cash flow and profit. The net cash generated from operating activities during the reporting periods was -142 million yuan, 45 million yuan, and -40 million yuan, respectively. The most recent period saw a dramatic year-on-year decrease of 1,196.10%, primarily due to increased inventory, trade, and other receivables, leading to higher cash used in operations.

As of the end of September 2025, Kuxin Micro's inventory, trade, and other receivables stood at 109 million yuan and 114 million yuan, increasing by 56.81% and 83.77% compared to the beginning of the year, respectively. To alleviate funding pressure, the company began borrowing significantly, with short-term borrowings increasing to 70 million yuan. Although existing cash reserves could cover the debt gap, cash and cash equivalents after deducting short-term borrowings were only 32 million yuan, indicating considerable liquidity pressure.

Further analysis reveals that Kuxin Micro's trade and other receivables consist mainly of prepayments. The balances at the end of each reporting period were 42 million yuan, 48 million yuan, and 95 million yuan, accounting for 76.33%, 76.93%, and 83.38% of the total, respectively. By the end of September 2025, the company's prepayments balance had doubled compared to the start of the year.

Notably, Kuxin Micro has situations where a supplier is also a customer. During the reporting periods, the company purchased sensors from Supplier I, with procurement amounts of 21 million yuan, 55 million yuan, and 5 million yuan, accounting for 12.1%, 15.4%, and 2.1% of total procurement, respectively. It also sold chips, modules, and technical services to Supplier I, generating revenues of 5 million yuan, 7 million yuan, and 18 million yuan, accounting for 4.5%, 1.6%, and 5.1% of total revenue, respectively.

Based on disclosed information, Supplier I is identified as the Shenzhen Main Board-listed company GaoDe Infrared. It was Kuxin Micro's largest supplier in 2023, the second-largest supplier in 2024, and the fifth-largest customer in 2023. Furthermore, GaoDe Electric, the controlling shareholder of GaoDe Infrared, is a shareholder of Kuxin Micro. In December 2021, GaoDe Electric invested 15 million yuan in the company and held a 0.55% stake prior to the IPO.

**Over Half of Share-Based Compensation Allocated to CFO**

In 2023 and 2024, while Kuxin Micro reported substantial losses, CFO Xu Wei received an annual remuneration of approximately 30 million yuan.

Xu Wei joined Kuxin Micro in December 2020 and currently serves as the CFO, Board Secretary, and Co-Company Secretary, primarily responsible for overseeing the company's financial management, accounting, investor relations, and corporate governance.

In 2023 and 2024, Xu Wei's total remuneration was 32.019 million yuan and 31.41 million yuan, respectively. This included equity-settled share-based compensation of 30.073 million yuan each year, accounting for approximately 79.24% and 37.83% of the company's total share-based compensation expenses for the respective periods.

In total, Kuxin Micro's share-based compensation expenses for 2023 and 2024 amounted to 117 million yuan, with half allocated to Xu Wei. Breaking down the expenses, the share-based compensation costs included in administrative expenses totaled 69.606 million yuan, of which over 85% was allocated to Xu Wei.

It is common practice for mainland Chinese companies to implement equity incentive plans before listing in Hong Kong. The fundamental purpose is to maximize innovation vitality, retain key talent, and enhance long-term enterprise value through a mechanism of "shared interests and shared risks." Typically, for R&D-driven high-tech companies, the targets of equity incentives should focus on core technical personnel, R&D backbone staff, and team members critical to technological breakthroughs.

However, Kuxin Micro's approach appears to differ.