After a decade-long journey through the capital markets, Hualan Micro, a veteran domestic storage controller chip maker, is now knocking on the door of a landscaping company's boardroom rather than a stock exchange.

On the evening of September 11, Hangzhou Landscaping Co.,Ltd. (605303.SH) announced it was planning to acquire control of Hangzhou Hualan Microelectronics Co., Ltd. ("Hualan Micro") through a combination of share issuance and cash payment. The deal is expected to constitute a major asset restructuring, with trading in the company's shares suspended from September 14 for an estimated period not exceeding 10 trading days.

Currently, core terms such as the target company's valuation, transaction amount, and the ratio of share issuance to cash payment have not yet been determined. However, Hangzhou Landscaping has clearly stated that the transaction is not expected to constitute a backdoor listing nor result in changes to the company's controlling shareholder or actual controller. This means that if the deal is completed, Hualan Micro will become a controlling subsidiary of Hangzhou Landscaping, with founder Wu Guanghong still at the helm of the listed company.

Hualan Micro's path in the capital markets has finally achieved a breakthrough. Hualan Micro was listed on the New Third Board in 2015 and later delisted; it applied for the STAR Market in 2022, withdrew the application in 2024, restarted IPO tutoring in 2025, and now is preparing to enter a listed A-share company. Before the trading suspension, Hangzhou Landscaping was trading at 23.68 yuan per share, with a total market capitalization of 3.8 billion yuan.

Hualan Micro Shifts Capital Strategy Again

Founded in July 2011 with a registered capital of 150 million yuan and headquartered in Hangzhou, Hualan Micro primarily engages in the research and development of chips, storage modules, and technology solutions in the fields of data storage and information security. The company's first formal contact with the capital markets can be traced back to the New Third Board. In 2015, Hualan Micro listed there and later delisted in 2019.

After briefly appearing on the OTC market, the company shifted its sights toward the STAR Market. In December 2022, the Shanghai Stock Exchange accepted Hualan Micro's STAR Market IPO application. At that time, the company planned to issue no more than 50 million shares, raising approximately 657 million yuan, primarily for new-generation disk array controller chips, high-performance enterprise-grade solid-state drive controller chips, and R&D center construction projects.

However, this IPO did not reach the finish line. In May 2024, Hualan Micro and its sponsor Huatai United Securities voluntarily applied to withdraw the listing materials, and the exchange subsequently terminated the review. After exiting the STAR Market review process, Hualan Micro did not give up on independent listing. In August 2025, the company signed a new tutoring agreement with Huatai United and subsequently filed for listing tutoring.

Compared to the previous application, the company's management also underwent changes: founder Luo Jianjun transitioned from chairman and general manager to chief technology officer, while Wang Wenkui, who has experience at Eastern Communications (600776.SH), took over as chairman and general manager. However, shortly after restarting the listing tutoring process, Hualan Micro encountered Hangzhou Landscaping.

In December 2025, Hangzhou Landscaping and its wholly-owned subsidiary Yunhe Technology collectively invested 112 million yuan to purchase 6.4969% of Hualan Micro's equity from Deng Yuting, Zeng Chao, and Hangzhou Feidu Information Technology Co., Ltd. Hangzhou Landscaping defined this transaction as a "financial investment" at the time, explicitly stating it would not form a controlling relationship or consolidate Hualan Micro into its financial statements.

Since Hangzhou Landscaping was still in a loss-making state, with only 253 million yuan in book monetary funds as of September 2025, the 112 million yuan investment quickly drew regulatory attention. On the evening of the announcement, the exchange issued an inquiry letter requiring the company to explain the commercial rationality, valuation fairness, and funding arrangements for investing in a persistently loss-making chip company. Hangzhou Landscaping subsequently completed the share transfer.

By September 2026, the original "financial investment" had escalated into a major asset restructuring. The company plans to directly obtain control of Hualan Micro. What exactly happened in less than a year—from a mere 6.4969% stake to seeking controlling interest—remains to be revealed in the restructuring plan.

Hualan Micro's shareholding structure is rather unique. The company has undergone multiple rounds of financing, and among its shareholders have appeared institutions such as Shenzhen Capital Group, TCL-affiliated investment funds, Founder Securities' investment arm, and local industry funds. According to its 2022 prospectus, the company once had nearly 100 shareholders, with highly dispersed equity and no controlling shareholder or actual controller.

After Hangzhou Landscaping's previous stake purchase, Luo Jianjun, Zhou Bin, and their controlled entity Hualanchuang collectively controlled approximately 8.41% of Hualan Micro; Hangzhou Landscaping and Yunhe Technology together held 6.4969%, still not the largest shareholding entity. This suspension notice shows that Hangzhou Landscaping has signed a letter of intent with Hualanchuang, but Hualanchuang itself only holds about 5.9%, which alone would not be sufficient to form absolute control. Whether Hangzhou Landscaping will ultimately continue acquiring shares from other institutional shareholders or secure control through proxy voting rights or board seat arrangements will be key to the restructuring plan.

For institutions that have invested in Hualan Micro for years, this acquisition may also provide a new exit window. Shen Meng, director of Chanson Capital, believes that with semiconductor concepts currently hot in the market, being acquired—compared to an IPO with high time costs and uncertainty—means sacrificing some value in exchange for faster, more certain securitization, avoiding market regulatory volatility risks.

Shen Meng noted that with the actual controller unchanged after the restructuring, it technically circumvents the identification of a backdoor listing, but in essence, it still constitutes the securitization of new assets through a listed company. The difference lies in leveraging the rules to avoid stricter review. Although semiconductor concepts are currently popular, no one can predict how long the hype will last, and there is uncertainty as to how well a company can sustain the hot concept. Therefore, being acquired aligns with the interests of all current investors.

Hualan Micro Still in Losses

Hualan Micro's story is inseparable from founder Luo Jianjun. Public records show Luo was born in 1970, earned his undergraduate degree in microelectronics from Shanghai Jiao Tong University, and later obtained a master's degree from Hangzhou Dianzi University and a doctorate from Zhejiang University. After graduation, he joined Eastern Communications, participating in communication systems and chip R&D, and later went to the United States to work in chip design.

In 2011, Luo returned to China to found Hualan Micro, aiming to achieve domestic substitution in the field of storage controller chips. While storage controller chips are not as widely known to ordinary investors as CPUs or GPUs, they are vital components of storage devices. According to Hualan Micro's STAR Market prospectus, the company's products include storage controller chips, storage modules, storage systems, and applications, covering memory cards, USB drives, solid-state drives, disk arrays, and more.

From 2019 to 2021, Hualan Micro accumulated approximately 261 million yuan in R&D investment, accounting for 19.78% of cumulative revenue during the period; as of June 2022, the company had 96 R&D personnel, representing 37.65% of total employees. Despite the sizable technical investment, Hualan Micro has been unable to resolve its profitability issues.

According to the exchange inquiry letter Hangzhou Landscaping received in 2025, Hualan Micro generated 565 million yuan in main business revenue in 2022, with a net loss excluding non-recurring items of 111 million yuan. In the first three quarters of 2023, main business revenue was 221 million yuan, with a net loss excluding non-recurring items of 78 million yuan. By 2024, Hualan Micro achieved 366 million yuan in revenue but posted a net loss excluding non-recurring items of 143 million yuan. In the first three quarters of 2025, the company's revenue further declined to 199 million yuan, with a net loss excluding non-recurring items of 84 million yuan.

Hualan Micro partly attributes the revenue decline to proactive product mix adjustments. When it was pursuing the STAR Market IPO, its main revenue came from consumer-grade storage modules, with clients mainly consumer electronics companies such as Lenovo Group. After withdrawing its IPO application, Hualan Micro reduced resource investment in traditional consumer-grade module businesses and shifted its focus toward self-developed storage controller chips, industrial-grade storage, and array products targeting data centers and high-performance computing.

But chip R&D cycles are longer and more capital-intensive. New products require time to go from tape-out, testing, customer validation, to large-scale sales. During the transition period when original module revenue is declining and new chips haven't yet reached scale, Hualan Micro's revenue and profits are both under pressure.

Despite not yet achieving profitability, Hualan Micro has still commanded a relatively high valuation. When Hangzhou Landscaping took its stake in 2025, appraisers used both the income approach and market approach to value Hualan Micro, arriving at 813 million yuan and 1.725 billion yuan respectively. The market approach result of 1.725 billion yuan was ultimately selected, representing a valuation appreciation rate of 265.23%.

Hangzhou Landscaping acquired the 6.4969% stake at 11.5 yuan per share, for a total consideration of approximately 112 million yuan. The inquiry response at the time showed that Hualan Micro's valuation referenced the price-to-sales ratios of M&A cases in the integrated circuit industry. Based on the appraisal data, the previous full fiscal year revenue was 335 million yuan, corresponding to a total shareholder equity value of 1.725 billion yuan. Now that Hangzhou Landscaping is preparing to upgrade its stake from a minority position to control, whether the transaction will include performance commitments and valuation adjustment mechanisms awaits further disclosure.

Why Hangzhou Landscaping?

Compared to Hualan Micro's chip background, the buyer it has chosen seems rather surprising. The full name of Hangzhou Landscaping is Hangzhou Municipal Landscape Greening Co., Ltd. It primarily engages in municipal garden engineering, landscape design, flower seedlings, and ecological restoration, with actual controller Wu Guanghong. Born in 1967, Wu holds a bachelor's degree and is a professor-level senior engineer who has long worked in the landscaping industry.

The company listed on the Shanghai Stock Exchange in 2021, achieving a net profit attributable to parent of 61.74 million yuan in its first listing year, but business quickly turned downward. According to Hangzhou Landscaping's annual reports, from 2022 to 2025, the company's net profits attributable to parent were losses of approximately 262 million yuan, 157 million yuan, 190 million yuan, and 170 million yuan respectively—a cumulative loss of about 779 million yuan over four years.

In 2025, Hangzhou Landscaping achieved 483 million yuan in revenue, down 33.07% year-on-year, with a net loss attributable to parent of 170 million yuan. The company attributes the revenue decline mainly to fewer newly started projects, while the landscaping engineering business also faces pressures from longer collection cycles and high accounts receivable.

In search of a second growth curve, Hangzhou Landscaping has tried tourism, new materials, and other directions, gradually focusing its resources on semiconductor storage. In February 2026, Hangzhou Landscaping, through its wholly-owned subsidiary Yunhe Technology, invested 11 million yuan to acquire 55% equity of Shenzhen Yunhai Zhisuan Technology Co., Ltd., consolidating it into its financial statements. Yunhai Technology primarily produces consumer-grade and enterprise-grade storage products, including SSDs, memory modules, USB drives, portable solid-state drives, TF cards, server memory modules, and eMMC. The company has capabilities in storage product processing, testing, and assembly, and is closer to the storage module and end-product segment.

After Yunhai Technology was consolidated, Hangzhou Landscaping's business structure has undergone noticeable changes. In the first half of 2026, Hangzhou Landscaping achieved 261 million yuan in revenue with a net loss attributable to parent of 71.07 million yuan. Among this, semiconductor storage business generated 114 million yuan in revenue, accounting for 43.78% of total revenue; Yunhai Technology achieved a net profit of 6.63 million yuan.

Semiconductor storage now contributes nearly half of revenue, but its profit scale remains insufficient to fill the losses from the landscaping main business. In terms of current business composition, Hualan Micro also sells SSDs and other storage modules and storage systems, with some business overlap with Yunhai Technology. However, Hangzhou Landscaping's financial strength also poses a challenge.

As of June 2026, Hangzhou Landscaping had approximately 174 million yuan in monetary funds, of which around 94.35 million yuan was under regulatory supervision, frozen, or otherwise restricted. Based on semi-annual data, unrestricted monetary funds were approximately 79.54 million yuan. The company previously paid approximately 112 million yuan to acquire 6.4969% of Hualan Micro. Now, with a further controlling stake acquisition, if a large proportion of cash payment continues, it may put pressure on Hangzhou Landscaping's liquidity.

After the transaction is completed, Hangzhou Landscaping will also face issues such as Hualan Micro's persistent losses, high R&D investment, core team stability, business integration, and potential goodwill impairment. Hangzhou Landscaping has also previously warned that its reserve of professional personnel in semiconductor storage and chips is insufficient, and whether the business transformation can proceed smoothly remains uncertain.

From Hualan Micro's perspective, although Hangzhou Landscaping is not large and its main business is under pressure, it does provide an A-share platform capable of issuing shares, raising funds, and implementing industrial integration. From Hangzhou Landscaping's perspective, Hualan Micro offers chip technology, industry credentials, and greater valuation imagination space.

From the New Third Board to the STAR Market, and now to Hangzhou Landscaping, Hualan Micro has spent over a decade searching for a capital market exit. Now, it may finally enter the financial statements of a listed company. When a chip company in need of a capital platform meets a landscaping company desperate for a second growth curve, do you think this combination will work? Feel free to leave a comment below to join the discussion.