On August 18th, SHANGHAI FUDAN (01385.HK) experienced a high-open-then-low trend, closing down 2.60% with an intraday swing of 4.92%. Meanwhile, its A-share counterpart, Fudan Microelectronics (688385.SH), also pulled back after an initial surge, though it still managed to close up 1.87%. Notably, the unusual movements in both its A and H shares were also driven by fresh news flow.

Before the market opened on August 18th, SHANGHAI FUDAN released its interim report for 2026. During the period, the company achieved operating revenue of 2.225 billion yuan (RMB, same below), a year-on-year increase of 21.03%. Net profit attributable to shareholders of the company reached 849 million yuan, surging 338.58% year-on-year, with a comprehensive gross margin of 56.99%.

In the interim report, SHANGHAI FUDAN stated that in the first half of the year, benefiting from the recovery of industry prosperity and growing demand from downstream customers, all product lines of its integrated circuit design business saw increases in both revenue and gross profit. Gross profit rose by approximately 224 million yuan compared to the same period last year. The fair value change gains recognized from shares acquired via strategic placement boosted net profit by about 420 million yuan. Additionally, as the base for inventory write-down losses was high in the same period last year, and no significant new impairment items were recorded this period, inventory write-down losses decreased by approximately 128 million yuan year-on-year.

Furthermore, the company has persisted in technological innovation and product iteration upgrades. New products such as FPGA series, security and identification series, and automotive-grade MCUs, along with supporting solutions, have been gradually launched and contributed to revenue. This, combined with strong demand for non-volatile memory leading to both volume and price increases, collectively drove revenue growth. At the same time, optimization of the product mix has further improved overall operational efficiency.

From a market perspective, semiconductor design companies listed in Hong Kong are relatively scarce, and SHANGHAI FUDAN is a core player in the FPGA track. Its technical barriers and the logic of domestic substitution provide valuation support. Compared to domestic FPGA peers, the company holds a first-mover advantage in product matrix, customer coverage, and technical accumulation, but still faces challenges in high-end product breakthroughs and advanced process node progression. At the industry level, the recovery of the global semiconductor cycle and the acceleration of domestic substitution are the two core themes. As a domestic FPGA leader, SHANGHAI FUDAN stands to benefit from these industry trends in the medium to long term, though it faces risks from earnings fluctuations and changes in industry prosperity in the short term.

In terms of expectations, this interim performance showed revenue up 21% and net profit up 339%, which is impressive from an absolute growth perspective. However, the stock price fell despite the good news, likely reflecting that market expectations were already fully priced in, leading to a "sell the news" interpretation. The high net profit growth included non-recurring or one-off factors, and the market is more focused on the sustainable growth rate of revenue and the actual pace of FPGA business ramp-up. If revenue growth in subsequent quarters fails to maintain current levels, the market may further revise expectations downward.

It is understood that the application and promotion work for the candidate list of the 13th "Top 100 Hong Kong Stocks" selection event has been launched simultaneously. SHANGHAI FUDAN possesses distinctive advantages in the semiconductor domestic substitution track, being one of the leading domestic FPGA chip design companies. Its products are widely used in security identification, smart meters, industrial control, and other fields, aligning well with the evaluation criteria of the "Top 100 Hong Kong Stocks" award for growth potential and industry representativeness of hard-tech enterprises. The company is expected to enter the relevant candidate list, though its shortcomings may affect its final ranking. Going forward, continued tracking of FPGA business revenue growth and gross margin levels, high-end product breakthrough progress, and the pace of industry cycle recovery will be essential to assess the company's medium-to-long-term growth quality.