Analysis of Qizhong Technology (688352)'s Strong Performance: Short-Term Rise Driven by Strategic Transformation Expectations

January 21, 2026
This stock entered the strong stock pool today with a 15% increase

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Qizhong Technology (Hefei Qizhong Technology Co., Ltd.) is a STAR Market listed company focusing on advanced integrated circuit packaging and testing services, with stock code 688352. It went public on April 20, 2023, with an issue price of RMB 12.10. The company’s actual controller is the Hefei Municipal People’s Government State-owned Assets Supervision and Administration Commission, holding a 43.60% stake, which features obvious government credit endorsement [1]. The company’s main business covers packaging and testing services for display driver chips, power management chips, and RF front-end chips. It is an industry leader in the display driver chip packaging and testing field, a typical leading enterprise in a niche track.

From the perspective of share capital structure, the company’s total share capital is 1.189 billion shares, but the circulating share capital is only 366 million shares, with a relatively small floating market cap. This means that the stock price may experience large fluctuations driven by market sentiment [1]. The characteristics of small-cap stocks are both a source of short-term elasticity advantages and a potential hidden danger of volatility risks.

Between January 18 and 19, 2026, the company released two important announcements, which are the core catalysts for this strong performance [2]:

First, the company plans to use RMB 50 million to increase capital in Zhejiang Hexin Integration Co., Ltd., obtaining a 2.27% stake. Hexin Integration’s main business involves the advanced packaging and testing field. This investment marks the start of Qizhong Technology’s strategic transformation from traditional packaging and testing business to the high-end advanced packaging and testing track. Although the investment amount and shareholding ratio are relatively limited (only 2.27% stake), the market has given a positive interpretation of the strategic significance of this move, reflecting investors’ expectations for the company’s business upgrade.

Second, the company used RMB 428 million in convertible bond proceeds to provide loans to its wholly-owned subsidiary to implement the fundraising project, including replacing self-raised funds pre-invested in the fundraising project. This capital operation indicates that the company is actively promoting the construction of the fundraising project, laying the foundation for subsequent capacity expansion [2].

It is worth noting that Qizhong Technology’s strong performance stands in stark contrast to the overall market environment. On January 20, 2026, the U.S. stock market showed an adjustment trend. The S&P 500 index closed at 6,810.40 points, down 0.80%, and the Nasdaq index closed at 23,020.61 points, down 0.53% [3]. Against the background of a weak overall market, Qizhong Technology’s ability to surge 15% against the trend highlights the independent driving effect of its own catalysts on the stock price, and also reflects structural opportunities within the semiconductor sector.

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The strategic intention of Qizhong Technology’s investment in Hexin Integration deserves in-depth analysis. Currently, the domestic semiconductor packaging and testing industry is facing structural changes. Traditional packaging business is facing intensified competition and continued pressure on gross profit margins, while advanced packaging (such as Chiplet, 2.5D/3D packaging, etc.), as a high-value link in the industrial chain, has become a battleground for all players. By entering the advanced packaging and testing field through equity participation, the company not only reduces the risk of independent investment but also retains the possibility of further integration in the future. This layout reflects the management’s accurate judgment of industry trends and a pragmatic transformation strategy.

However, investors need to clearly recognize that a 2.27% shareholding means the company has limited speaking rights in Hexin Integration. This investment is more of a strategic test rather than in-depth integration. The real business synergy effect takes time to verify, and its substantive contribution to performance in the short term may be relatively limited.

The general trend of domestic substitution in semiconductors provides broad growth space for packaging and testing enterprises, but industry competition is also becoming increasingly fierce. Qizhong Technology has established a strong competitive barrier in the display driver chip packaging and testing field, which is its core advantage. However, the company admits that its main business is under gross profit pressure, reflecting the cost pressure and price competition faced by the traditional packaging and testing business. The key to future success lies in whether the company can successfully extend to the high-end advanced packaging and testing field, achieving dual upgrades in product structure and profitability.

Hefei, where the company is registered, has vigorously developed the semiconductor industry in recent years and initially formed an industrial cluster. The holding background of the Hefei Municipal State-owned Assets Supervision and Administration Commission enables the company to fully utilize regional policy support and industrial chain synergy advantages. This location factor cannot be ignored when analyzing the company’s long-term competitiveness.

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The RMB 50 million investment in Hexin Integration only obtains a 2.27% stake, which has a limited direct impact on the company’s overall performance. The short-term rise driven by market sentiment may be an overreaction, and the risk of chasing the rally cannot be ignored.

The gross profit margin of the company’s traditional main business continues to be under pressure, and transformation and upgrading require technical accumulation and time verification. Without significant improvement in fundamentals, the stock price rise relies more on market expectations.

The circulating share capital is only 366 million shares, and the stock price may experience sharp fluctuations when market sentiment changes, amplifying the uncertainty of investment returns.

The company went public in April 2023, and the unlock of original shares and shares held by specific investors may bring selling pressure, which requires close attention.

The 15% increase and entry into the strong stock pool indicate active short-term capital participation. If trading volume continues to expand, the upward momentum may continue.

The market is optimistic about the company’s strategic transformation to expand into the advanced packaging and testing field. This expectation may continue to support the stock price before fundamentals are verified.

Domestic substitution of semiconductors is a continuously focused theme in the capital market. Policy support and industrial trends provide a favorable external environment for the company.

From the perspective of risk-return characteristics, risks and opportunities coexist in the current stage, but risks slightly outweigh opportunities. The short-term 15% increase has partially reflected the positive news of the investment announcement, and the safety margin for further chasing the rally has decreased. Investors are advised to maintain a cautious and optimistic attitude and wait for a better entry opportunity.

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Qizhong Technology entered the strong stock pool today and recorded a 15% increase, mainly driven by the company’s announcement of a planned RMB 50 million investment to obtain a 2.27% stake in Hexin Integration [2]. This investment marks the company’s strategic transformation from traditional packaging and testing business to the high-end advanced packaging and testing field, which has been positively interpreted by the market. As a niche leader in the display driver chip packaging and testing field, the company has a certain industry status and technical accumulation, and has the support of the Hefei Municipal State-owned Assets Supervision and Administration Commission [1].

However, investors should note the following points: First, the scale of this investment is small, the shareholding ratio is limited, and the substantive impact on the company’s performance remains to be observed; Second, the fundamental issue of pressured gross profit from the company’s main business has not been fundamentally resolved; Third, the large short-term increase may have overdrawn some future expectations. In terms of operation, it is recommended to pay attention to changes in trading volume and follow-up announcements. Investors may appropriately lay out on dips but must strictly set stop-loss levels to guard against the risk of short-term pullback.

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[1] Flush Stock Page - Qizhong Technology

[2] Sina Finance - Qizhong Technology Announcements and News

[3] Jinling Analysis Database - Market Index Data