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Fragmented Shareholding Positions Allystar For Turbulence

The satellite positioning chip designer previously planned to float shares on China's domestic A-share market, but has shifted its sights to Hong Kong with its new listing application

Key Takeaways:

Hong Kong IPO applicant Allystar Technology continues to report losses, but could soon become profitable as it achieves economies of scale and other greater efficiencies

The company has signed strategic partnerships with many big tech names such as Meituan, BYD and ZTE

The rise of location-based apps and smart cities, combined with a new dawn of the internet of everything (IoE), has created strong demand for positioning services that are putting Allystar Technology (Shenzhen) Co. Ltd. on the investor map. Now, the leading positioning chip designer is trying to cash in on its rising star with a recent application to list in Hong Kong.

The company has done some directional shifting of its own, moving its sights to the more internationally focused Hong Kong after originally planning to chase a listing on China's domestic A-share market.

Allystar uses navigation chip technology and an R&D team it acquired in 2017 from Huada Technology (0085.HK), a subsidiary of state-run electronics giant China Electronics Corp. (CEC), a year after its founding by seven shareholders, according to its listing document filed earlier this month. It began mass producing its dual-frequency high-precision navigation and positioning system-on-chips (SoC) in 2019 for use in the BeiDou system, China's homegrown alternative to the globally popular U.S.-based GPS. Since then, it has also begun making chips for use in other major global positioning systems, including GPS.

Allystar's current shareholding is quite diverse, with no single company holding more than 10% of its stock. Its largest shareholder is CEC subsidiary China Electronics Optics Valley Union (0798.HK), which holds a 9.2%. Other shareholders include ...