Domestic magnetic sensor leader makes second attempt at Hong Kong listing, HiMag Technology's path to profitability faces lingering risks

As new energy vehicles, green energy, semiconductors, and embodied intelligence gradually become the core engines of global industrial upgrading, magnetic sensors, as key components in these fields, are increasingly recognized for their strategic value.

In the competitive landscape dominated by international giants, a company from Anhui, China, is attempting to break through. This is Anhui Xicmi Technology Co., Ltd. (hereinafter referred to as “Xicmi Technology”), which re-submitted its listing application to the Hong Kong Stock Exchange on February 27 of this year.

The prospectus reveals that Xicmi Technology, which has already achieved the number one position in magnetic sensors domestically, faces several awkward realities behind its apparent profitability turnaround in 2024—only 0.6% global market share, shrinking overseas revenue proportion, and multiple risks hidden behind performance growth, adding uncertainty to its IPO journey.

1

Domestic Leader’s Dilemma

Global Market Share Only 0.6%

Magnetic sensors, known as the “nerves” of modern industry, detect the strength, direction, and changes of magnetic fields, converting invisible magnetic signals into electrical signals such as voltage, current, and resistance that devices can recognize and measure. They are core sensing components for accurately measuring key physical quantities like current, position, angle, and speed, serving as the foundation for intelligent devices and high-end manufacturing to achieve precise control and safe operation.

Based on actual applications, magnetic sensors mainly include current sensors, motion sensors, and others (such as magnetic switches and magnetic heads). Technologically, they are divided into Hall sensors and xMR sensors (including AMR, GMR, and TMR sensors).

Among over 200 global magnetic sensor suppliers, fewer than 10 companies possess both of these technological paths, and Xicmi Technology is one of them. They adopt an IDM (Integrated Device Manufacturer) model, controlling and optimizing the entire value chain from chip design and wafer manufacturing to module design and production.

However, currently, Xicmi Technology remains in an awkward position of being a “domestic leader, marginal on the global stage.”

According to a report by Frost & Sullivan, in 2024, the top ten global magnetic sensor suppliers will hold a combined market share of 31%, with Xicmi Technology being the highest among Chinese companies, but its global share is only 0.6%, ranking tenth, with a gap of over ten times compared to the industry leader “Company A,” which holds 6.5%.

If only considering IDM companies, Xicmi Technology ranks sixth.

Image / Prospectus

On one hand, Xicmi Technology is the youngest among the top ten global companies, founded in 2014, and may be weaker in brand recognition and channel development compared to its international peers.

International giants, with decades of technological accumulation and automotive-grade certifications, have established strong customer loyalty in high-end markets such as Europe, America, Japan, and South Korea.

Although Xicmi Technology acquired the older German magnetic sensor company Sensitec (founded in 1999) in 2021—whose sensors had been used in NASA and ESA space exploration missions before acquisition—their overseas revenue share as of September 30, 2025, remains low and is declining overall.

On the other hand, technological gaps and product portfolio limitations also temporarily affect Xicmi Technology’s market penetration.

Frost & Sullivan reports that the global magnetic sensor market is currently dominated by Hall sensors, which in 2024 will have a market size of 83.7 billion yuan, accounting for 70.22%, while xMR sensors will reach 35.5 billion yuan, accounting for 29.78%.

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By 2029, the market share of Hall sensors is forecasted to remain high at 66.21%, with xMR sensors increasing to 33.79%.

As of September 30, 2025, in Xicmi Technology’s revenue breakdown by technology, Hall sensors account for only 13.4% of total revenue, while xMR sensors (including TMR, AMR, and GMR) account for 77.4%.

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Clearly, most of Xicmi Technology’s revenue comes from xMR sensors, but this technology currently does not dominate the global market.

However, xMR sensors have promising prospects. The magnetic sensing technology is transitioning from traditional Hall sensors to higher-performance xMR sensors, which are projected to grow at a compound annual growth rate (CAGR) of 22.8% from 2024 to 2029, higher than the 18.3% CAGR of Hall sensors.

In specific technical fields, Xicmi Technology holds certain advantages. The company ranks second globally in the TMR sensor segment with a 3.9% market share, and third in current sensors with a 3.4% share.

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This “partial advantage, overall weakness” pattern truly reflects Xicmi Technology’s awkward position—finding market breakthroughs amid giants, but still facing a long road to gain larger global market share and visibility.

2

Turning Losses into Profits, Risks Remain

Despite its awkward position in the global landscape, Xicmi Technology has shown some bright spots in its financial fundamentals during the reporting period.

In terms of revenue, the company achieved 666 million yuan in 2022, which declined by about 10.8% year-on-year to 594 million yuan in 2023, mainly due to industry environment factors; in 2024, revenue rebounded to 703 million yuan, up 18.4%.

In the first nine months of 2025, revenue further increased to 627 million yuan, a 15.2% growth compared to the same period in 2024.

Net profit also experienced a critical shift from significant loss to profit.

In 2022, net loss reached 1.206 billion yuan, mainly due to large fair value loss; in 2023, losses narrowed sharply to 67 million yuan; in 2024, the company turned profitable, with a net profit of 9.85 million yuan.

However, in 2024, the company received government subsidies of 20.36 million yuan, and excluding this, it still remained in loss.

In the first nine months of 2025, profit continued to improve, with net profit reaching 39.77 million yuan, a 531% increase over the same period in 2024.

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From 2022 to September 2025, Xicmi Technology’s gross profit margins were 15.3%, 18%, 17.2%, and 24.4%, respectively, showing an overall upward trend, especially in the first three quarters of 2025, driven by the launch of higher-margin new products.

At the same time, the company cannot afford to be complacent, as it still faces many risks.

First, there is pressure on gross profit margins to decline. The prospectus reveals that the high-margin new products launched in the first three quarters of 2025 initially enjoyed high gross margins, but as demand grew and scale expanded, customers typically requested discounts, which could lead to a decline in gross margins over the product lifecycle.

Whether the company can sustain high gross margins in the future will determine its profitability.

Second, to continuously develop high-margin new products, R&D investment must keep pace. According to the prospectus, R&D expense ratio peaked at 8.57% in 2023 but has shown a clear downward trend: falling to 7.63% in 2024 and further to 6.35% in the first nine months of 2025.

This trend indicates a weakening of R&D intensity, which may hinder the development of new products and the building of technological barriers.

Third, customer concentration risk remains prominent. During the reporting period, the top five customers accounted for 65.2%, 62.4%, 62.5%, and 58.5% of revenue, respectively. Although the overall trend is downward, as of September 2025, more than half of the revenue still depends on these top five clients.

High customer concentration reduces bargaining power; losing key customers or facing cooperation issues could significantly impact performance, which warrants caution.

3

Declining Overseas Revenue Share, Questionable Fundraising Rationality

Xicmi Technology explicitly states in its prospectus that “expanding global presence and increasing overseas sales are important future growth directions,” but actual data shows some disconnect with this strategic goal.

During the reporting period, overseas revenue was 112 million yuan, 111 million yuan, 108 million yuan, and 85 million yuan, respectively. The proportion of overseas revenue to total revenue also declined, at 16.8%, 18.6%, 15.3%, and 13.6%.

Image / Prospectus

Although the company has two overseas manufacturing bases in Germany, its revenue from Germany has been decreasing year by year, dropping from 8.1% of total revenue in 2022 to 4.5% in the first nine months of 2025, mainly due to weak macroeconomic conditions in Europe.

More puzzling is the company’s fundraising and expansion plans. Xicmi Technology intends to use part of the proceeds from this IPO to build a new base in Wuxi and upgrade wafer production lines in Germany, among other projects.

However, the prospectus shows that capacity utilization rates at various production bases are generally low—60.7% at Bengbu module plant, 45.2% at Ningbo module plant, 33.8% at Weizlar module plant, and 64% at Mainz wafer fab in the first nine months of 2025.

In the context of underutilized existing capacity, the necessity of further expansion through fundraising is questionable.

During the reporting period, inventory write-downs increased from 22.87 million yuan in 2022 to 50.62 million yuan in the first nine months of 2025, indicating inventory risks. Continuing to expand capacity under these conditions could lead to double inventory backlog of both old and new stock.

Additionally, the prospectus shows that as of September 30, 2025, the company held about 256 million yuan in financial assets measured at fair value (wealth management products), and cash flow from operating activities in the first nine months was 54.06 million yuan, indicating healthy cash flow.

This situation—holding large financial assets and positive cash flow—contrasts with the company’s intention to raise funds via IPO, raising questions about the necessity of such fundraising.

Such doubts are not unfounded. In today’s increasingly rational capital markets, investors are no longer satisfied with grand narratives of “domestic substitution” but focus more on actual funding needs and capital efficiency.

Xicmi Technology’s long-term value does not lie solely in its “domestic leader” status or short-term profit rebound from losses, but in whether it can seize the growth opportunities of xMR sensors and gain larger market share and influence globally.

Currently, the company has established partial advantages in segments like TMR and current sensors. Its gross margin in the first nine months of 2025 reached 24.4%, demonstrating initial success in product upgrades.

In the future, if Xicmi Technology can face risks squarely, address shortcomings, stabilize profit quality, increase R&D investment, optimize customer structure, and expand overseas markets, it may have the chance to break free from the awkward 0.6% global market share and develop toward becoming a true global player.

Image source: Setu.com, based on VRF protocol.