2023.06.30 Views:
Anhui XDLK Microsystem Corporation Limited（XDLK）, a leading domestic MEMS inertial sensor company, has been listed on the scientific and technological innovation board (STAR Market) during the last day of the first half of 2023. By the time the market closed, its stock price had risen by 75.21%, resulting in a market capitalization of 18.74 billion yuan.
XDLK's primary products are high-performance MEMS inertial sensors.
Currently, a few international giants dominate the global MEMS inertial sensor market. XDLK stands out as one of the few companies capable of achieving stable mass production of high-performance MEMS inertial sensors. The company's high-performance MEMS inertial sensors possess advantages such as miniaturization, high integration, and low cost. Its core performance indicators have reached international advanced levels, exhibiting strong adaptability in complex environments. As a result, XDLK holds a certain industry position in the market competition of MEMS inertial sensors.
Unlike low- to medium-performance MEMS inertial sensors mainly applied in consumer electronics and other fields, XDLK's high-performance MEMS inertial sensor products have achieved large-scale applications in China's high-end industry, unmanned systems, and high-reliability fields. These products have innovatively addressed the technical and application challenges in the field of MEMS inertial sensors and have become the major supporting product suppliers for key projects of their clients.
Therefore,in comparison to selected A-share companies in the same industry, XDLK ossesses significant advantages in its gross profit margin. From 2020 to 2022, the average gross profit margin range of the former was 38.66%-46.04%, while XDLK reached as high as 85.47%-88.25%.
From 2020 to 2022, XDLK's operating revenue grew from 109 million yuan to 227 million yuan, and net profit increased from 52 million yuan to 117 million yuan, with respective compound annual growth rates of 44.54% and 49.89%.
XDLK attaches great importance to its technological research and development. During the reporting period, the company's cumulative R&D investment reached 122.2758 million yuan, accounting for 24.38% of its operating revenue.
In 2021, the company was included in the third batch of the Ministry of Industry and Information Technology's "Specialized, Refined, Unique, and New" (SRUN) small and medium-sized enterprise list. In 2022, it was selected as a champion cultivation enterprise in the manufacturing industry of Anhui Province and received the title of "Top 50 Specialized, Refined, Unique, and New Enterprises" in Anhui Province. The company's technological strength, research achievements, and industrialization capabilities have been recognized by nation and society.
According to Yole's statistics, the global MEMS inertial sensor market reached 3.509 billion USD in 2021 and is projected to reach 4.339 billion USD in 2025.
In the domestic market, according to the "2022 Overview of China's MEMS Sensor Industry" published by LeadLeo, the market size of China's MEMS inertial sensor industry was approximately 13.6 billion yuan in 2021.
With the development of MEMS inertial sensor technology and the expansion of downstream applications such as 5G communication, Industry 4.0, aerospace, and autonomous driving, high-end MEMS sensor companies like XDLK will have broad market space and favorable development opportunities.
CoStone Capital believes that XDLK is a leading domestic semiconductor microsystem sensor chip manufacturer, with its products widely applied in a great many industries such as intelligent automobiles and high-end industrial equipment. The company's core team has accumulated extensive experience in the semiconductor industry. XDLK is also one of CoStone Capital's important deployments in the entire semiconductor industry chain, and we look forward to its further progress after going public!
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026