Montage hit by Korea probe, but buybacks and CXMT stake lift outlook
South Korean price-fixing probe South Korean prosecutors raided Montage's office on July 15 over suspected chip price manipulation, sending A-shares down over 17% and H-shares down 22%. The company says operations are normal, but the investigation creates uncertainty about potential fines and reputational damage.
This is the biggest new negative event directly hitting Montage's stock price.
Share buyback plan signals confidence Montage announced a plan to buy back 300-600 million yuan of its own shares at up to 332.90 yuan per share. Buybacks reduce the number of shares outstanding and typically signal that management believes the stock is undervalued, supporting the price.
This is a new capital action that directly supports the stock price and shows management confidence.
CXMT strategic stake yields paper profit Montage participated in the strategic placement of CXMT, China's leading DRAM maker, which listed on July 27. Montage's stake is worth about 894 million yuan, a paper gain of roughly 736 million yuan. This strengthens ties with a key domestic memory customer.
This new event boosts Montage's investment income and strategic position in the domestic memory supply chain.
MRDIMM volume deployment expected in 2-3 years Montage said its second-generation MRDIMM product, with 45% higher speed, is expected to enter volume deployment in 2-3 years. As one of only two global suppliers of key MRDIMM chips, Montage is well-positioned to benefit from AI-driven server memory demand.
This new technology update highlights a long-term growth driver for Montage's core business.