2020.11.06 CoStone Capital Views:
On November 6th, 2020, CoStone Capital’s portfolio company GalaxyCore, a leading Chinese senor maker of CMOS image and DDI display gets approved for its IPO, joining CoStone’s STAR Market portfolio of Effort (688165.SH), SinoMed (688108.SH), BrightGene (688166.SH), Jinhong Gas (688106.SH), Donglai Coating Technology (688129.SH).
SSE’s approval of GalaxyCore’s IPO
With its technological supports to the R&D of leading wafer foundries in China, GalaxyCore gave birth to China’s first commercial CMOS image sensor and provided manufacturing solutions to domestic color coating plants of BEOL and CSP plants. In this way, GalaxyCore established the first industrial chain of commercial CMOS image sensors and made the Chinese CIS industry out of nothing.
But GalaxyCore never stops there. It then commits to breaking down tech-barriers set by international giants. By March 31th, 2020, GalaxyCore has not only obtained 286 and 12 patents at home and abroad with independent innovations but also translated these patents into a series of competitive products on the market.
In the production of CMOS image sensors, GalaxyCore alters the traditional COB with its innovative COM packaging process while the latter notably reduces particle pollution in module processing and transportation, an improvement greatly increases the yield and efficiency and cut the cost of chip packing and module production.
While in display driver ICs, GalaxyCore’s innovative COF-like design empowers the low-cost COG process to achieve a high screen-to-body ratio comparable to that of the COF process, creating the company a price advantage.
Li
An overview of GalaxyCore’s plant
GalaxyCore trades with the world. It has formed long-term stable cooperation with many leading manufacturers of camera and display modules like Sunny Optical (2382.HK), Ofilm (002456.SZ), Q Technology (01478.HK), Luxvisions, ShineTech, HoliTech (002217.SZ), ICEOptics (002036.SZ), MCNEX (097520.KQ), SunXin (Hubei) Optoelectronic, CRIC (GTSM：5371), TXD (002845.SZ), Zhongxian Intelligent（传音） and TCL CSOT (000100.SZ). These parts providers make GalaxyCore’s technologies present in many mainstream brands’ end products. They are Samsung (005930.KRX), Xiaomi (W01810.HK), OPPO, Vivo, Transsion (688036.SH), Nokia (NYSE: NOK), Lenovo (OTCMKTS: LNVGY), HP (NYSE: HPQ), TCL (000100.SZ), Little Genius（小天才）.
According to Frost & Sullivan, in 2019, GalaxyCore’s shipments of CMOS image sensors reached 1.31 billion, accounting for 20.7% of the global market share, ranking second in the industry. Shipments of CMOS image sensors for mobile phones with 13 megapixels and below reached 1.20 billion, accounting for 31.2% of the global market share. The company's LCD driver chip shipments reached 420 million, accounting for 9.6% of the market share in China, ranking second among the suppliers in the Chinese market with a comparative advantage. From 2017 to 2019, GalaxyCore 's operating revenue increased from 1.967 to 3.69 billion RMB. Meanwhile, it has turned losses of 8.717 million RMB to gains of 359 million RMB, which indeed a remarkable performance.
CoStone Capital MD Yang Shengjun: GalaxyCore is an epitome of China’s semiconductor industry. Chinese entrepreneurs like Mr. Zhao Xinli, the CEO of GalaxyCore, have been fighting through the industrial darkness, accumulating strength, and ultimately turning Chinese semiconductor manufacturers into competitive global players. That is what Chinese entrepreneurship means.
With an overwhelming preference for key & core technologies, CoStone has invested across the semiconductor industry for years. Our portfolio companies including GalaxyCore, OmniVision Technologies, Shoulder Electronics, and Jinhong Gas (688106.SH) are from the whole industrial chain, from materials to equipment and from design to packaging. But China’s way to chip innovation remains hard and long, and CoStone will always be there for Chinese chipmakers, always.
Rewritten by: Chen Cong, Edited by: Du Zhixin, Li Yunzhen
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