Analysis of the Strong Performance of Blue Arrow Electronics (301348): Risks and Opportunities Driven by M&A and Sector Catalysts

This analysis is based on reports from multiple sources including Sina Finance [1], OFweek Electronic Engineering Network [2], and Oriental Fortune Wealth Account [3], focusing on the strong performance of Blue Arrow Electronics on January 15, 2026. The stock surged by the 20% daily limit in the late trading session, closing at RMB 30.28, and entered the strong stock pool [1]. This rally is driven by two core factors: the major asset acquisition announcement released on the evening of January 12 — the company plans to acquire no less than a 51% stake in Chengdu Xinyi Technology Co., Ltd. for no more than RMB 675 million, where the latter is a national-level specialized, sophisticated, unique, and new “little giant” enterprise [2][3]. Meanwhile, the policy expectation of the US imposing a 25% tariff on semiconductors has stimulated the overall sentiment of the domestic substitution sector, providing additional sectoral catalytic effects for the stock [1].

Blue Arrow Electronics released an announcement on the evening of January 12, 2026, proposing to acquire no less than a 51% stake in Chengdu Xinyi Technology Co., Ltd. (hereinafter referred to as “Chengdu Xinyi”) in cash, with the tentative overall valuation of the target not exceeding RMB 675 million [2][3]. This acquisition plan marks Blue Arrow Electronics’ strategic expansion from traditional packaging and testing business to the chip design field. If the transaction is completed smoothly, the company will achieve a full industrial chain layout of “chip design + packaging and testing” [3]. In terms of the transaction structure, this acquisition adopts a cash payment method, with an acquisition ratio of no less than 51%, which means Chengdu Xinyi will be included in Blue Arrow Electronics’ consolidated financial statements. The valuation of RMB 675 million is within a reasonable M&A pricing range corresponding to Chengdu Xinyi’s revenue scale and industry status, but the final transaction price is subject to the official agreement.

Founded in August 2016, Chengdu Xinyi is a national-level specialized, sophisticated, unique, and new “little giant” enterprise focusing on the R&D, production, and sales of high-reliability analog integrated circuits [3]. In terms of core competitiveness, the company has obtained 30 authorized invention patents, 6 of which fill domestic gaps, demonstrating its technical accumulation and innovation capabilities in the field of analog integrated circuits [2]. From the perspective of customer structure, Chengdu Xinyi’s major customers include large central enterprises such as China Electronics Technology Group, China Aviation Industry Group, and China North Industries Group [2][3], and its products are widely used in key national equipment fields such as airborne, missile-borne, ship-borne, and vehicle-borne applications. This customer structure means that Chengdu Xinyi has high technical barriers and stable order sources, but it also means that its business growth is greatly affected by the procurement cycle of military equipment.

This acquisition has far-reaching strategic significance for Blue Arrow Electronics. From a technical perspective, Chengdu Xinyi’s chip design capabilities and Blue Arrow Electronics’ packaging and testing technology are deeply integrated, which helps enhance the company’s technical moat in the integrated circuit industry chain. From a product perspective, the complementarity between packaging and testing services and chip products will enable the company to provide customers with integrated “design + packaging and testing” solutions, increasing customer stickiness and product added value [3]. More importantly, leveraging Chengdu Xinyi’s customer resources in national defense technology and high-end manufacturing, Blue Arrow Electronics is expected to open up growth space in the high-end market. Currently, the demand for domestic substitution in the national defense and military industry is increasingly urgent, and Chengdu Xinyi’s technical accumulation in the field of analog integrated circuits exactly aligns with this market trend.

On January 14, 2026, local time, the White House announced that it would impose an additional 25% import tariff on some imported semiconductors and semiconductor manufacturing equipment starting from the 15th [1]. This policy trend has had a significant sentiment-driven catalytic effect on the A-share semiconductor sector. The core market logic is that the increase in tariff barriers will accelerate the domestic substitution process of the semiconductor industry chain, and the market space of domestic semiconductor enterprises is expected to be substantially expanded. Against this background, the semiconductor sector collectively strengthened in the afternoon of January 15, and several semiconductor concept stocks including Blue Arrow Electronics and Xidian Co., Ltd. (301629) hit the daily limit in late trading [1]. This indicates that market funds have relatively consistent optimistic expectations for the domestic semiconductor industry chain.

From the perspective of the internal sector, sub-sectors such as lithography machines and advanced packaging have performed particularly prominently [7]. Several semiconductor concept stocks have hit record highs, and the strong performance of stocks such as Shanghai Xinyang reflects the market’s recognition of the long-term development direction of the semiconductor industry [1]. As a representative enterprise in the integrated circuit packaging and testing field, Blue Arrow Electronics has benefited from the overall valuation increase of the sector.

From the perspective of the stock price trend, Blue Arrow Electronics has shown obvious strong characteristics after the release of the M&A announcement:

Date	Closing Price (RMB)	Price Change	Trading Volume (10,000 shares)
2026-01-15	30.28	+20.02%	26,244
2026-01-14	25.23	+2.25%	21,033
2026-01-13	24.06	+10.64%	18,163
2026-01-12	22.30	-	17,888

Data Source: Jinling Analysis Database [0]

Notably, on January 13 (the first trading day after the M&A announcement), the stock price once surged by 16.5% [2], continued to rise in the following trading days, and hit the 20% daily limit on January 15. From the perspective of trading volume, the trading volume on January 15 significantly increased to 262.44 million shares, indicating that incremental funds are actively entering the market [1].

However, block trade data reveals some risk signals worthy of attention. On January 15, 3 block trades occurred for Blue Arrow Electronics, with a total transaction volume of 557,100 shares, a transaction amount of RMB 13.493 million, and an average transaction price of RMB 24.22, representing a 20.01% discount to the closing price on that day [4]. A block trade also occurred on January 14, with a transaction volume of 152,000 shares, an average transaction price of RMB 21.65, representing a 14.19% discount to the closing price [5]. The continuous occurrence of block trades with large discounts may indicate that some institutional shareholders have cash-out needs. A transaction with a discount of 20% usually means that the seller is cautious about the short-term stock price trend or has liquidity needs. Investors should pay attention to this.

According to the third quarterly report data of 2025, the fundamentals of Blue Arrow Electronics show the following characteristics:

Indicator	Value	Year-on-Year Change
Operating Revenue	RMB 518 million	+2.55%
Net Profit	-RMB 26.5 million	Turned from profit to loss
Earnings Per Share	-RMB 0.11	-
Net Assets Per Share	RMB 6.20	-17.96%
Return on Net Assets	-1.78%	-

Data Source: Jinling Analysis Database [0]

It can be seen from the financial data that the company is currently in a loss state, and its profitability is under pressure. The trend of turning from profit to loss in the first three quarters of 2025 is worthy of attention, which may be related to factors such as intensified industry competition and reduced capacity utilization. The gross profit margin is relatively low, performance fluctuates greatly, and the fundamentals provide limited support for the current stock price.

Despite short-term performance pressure, Blue Arrow Electronics still has certain competitive advantages in the industry. The company is an important semiconductor packaging and testing base in South China, with an annual production capacity of over 15 billion units [2], serving well-known customers such as Midea, Gree, and China Resources Microelectronics. In 2024, it achieved an annual operating revenue of RMB 713 million and a net profit attributable to parent company shareholders of RMB 15.11 million [2], having a certain revenue scale foundation. In addition, the company’s cumulative dividend rate since its listing is as high as 92.5% [6], reflecting a strong awareness of shareholder returns, which to a certain extent reflects the management’s confidence in the company’s future development.

After comprehensive analysis, the following risk factors deserve investors’ key attention:

: This acquisition is still in the planning stage, and no official agreement has been signed yet, so there is a possibility of termination or adjustment [3]. After the completion of the M&A, Chengdu Xinyi will face challenges in business integration, team stability, and cultural integration, and the integration effect is uncertain.

: The company is currently in a loss state, and it will take time to improve its fundamentals. If the operating status cannot be effectively improved after the M&A is completed, the company may face the risk of continuous losses.

: The current market value of RMB 7.267 billion is relatively high compared to the company’s revenue scale. If market sentiment cools down, the valuation may face adjustment pressure.

: From a technical perspective, the stock price has increased significantly in the short term, and there may be a need for a technical correction. Coupled with the signal of discounted block trades, investors should be alert to the risk of a pullback after the positive news is realized.

From a technical analysis perspective, Blue Arrow Electronics shows the following characteristics: the stock price has stood above the 20-day and 30-day moving averages, and the moving average system shows a long arrangement, indicating a positive short-term trend [0]. The 20% daily limit on January 15 was accompanied by a significant increase in trading volume, with good volume-price coordination, showing active capital inflow. However, the RSI indicator is expected to have entered the overbought area, and there is a technical need for adjustment. Investors should pay attention to subsequent changes in trading volume; if a phenomenon of increased volume without price increase occurs, it may indicate a weakening of short-term momentum.

From a technical analysis perspective, the following key price levels can be focused on:

Price Type	Price Range
Strong Resistance Level	RMB 32-35 (historical high area)
Support Level	RMB 25 (near the 5-day moving average)
Strong Support Level	RMB 22-23 (upper edge of the previous consolidation platform)

Data Source: Jinling Analysis Database [0]

This round of rally of Blue Arrow Electronics shows the characteristics of dual drivers: “M&A-driven + sector catalytic”. The acquisition of Chengdu Xinyi provides the company with imagination space for long-term strategic growth, while the US tariff hike on semiconductors has ignited the market’s enthusiasm for domestic substitution. The two factors resonate, driving the stock price to rise rapidly. The advantage of this dual-driver model is that even if there is uncertainty in the M&A transaction, the overall sector sentiment may still support the stock price; conversely, even if the sector sentiment cools down, the expected fundamental improvement brought by the M&A can still provide certain support for the stock price.

From the perspective of shareholding structure, Qianhai Siyuan Co., Ltd. holds 93.6148 million shares, accounting for 5.85% of the total shares; CITIC Securities holds 61.1422 million shares, accounting for 3.82%; and Huatai Securities holds 42.0380 million shares, accounting for 2.63% [6]. The high proportion of institutional holdings indicates that institutional investors have a certain degree of attention to this stock. However, the discount phenomenon in block trades indicates that some institutions may be taking advantage of positive news to sell their shares. The complexity of this institutional game means that investors should pay more attention to risk control when participating.

: By acquiring Chengdu Xinyi, Blue Arrow Electronics has extended its industrial chain from packaging and testing to chip design. If the integration is smooth, it is expected to open up new growth space.

: Against the background of external technological blockade and tariff barriers, domestic semiconductor enterprises face a rare opportunity for domestic substitution. Chengdu Xinyi’s technical accumulation in the field of high-reliability analog integrated circuits is expected to fully benefit from this.

: The semiconductor sector has performed strongly overall, with high capital attention, providing a favorable market environment for Blue Arrow Electronics.

: The transaction has not been finally concluded, and there is a risk of termination or adjustment.

: The company is currently in a loss state, and it will take time to improve its fundamentals.

: The short-term price increase is large, and if market sentiment cools down, the stock price may face adjustment.

: The discount in block trades indicates that some institutions have the intention to sell their shares.

Risk Type	Risk Level	Attention Level
Transaction Uncertainty	Medium-High	Continuous Tracking
Performance Risk	Medium	Regular Review
Valuation Risk	Medium-High	High Attention
Market Volatility Risk	Medium	Stay Alert

Blue Arrow Electronics (301348) hit the 20% daily limit on January 15, 2026, entering the strong stock pool. Its strong performance mainly stems from two catalysts: first, the strategic transformation announced on January 12, which plans to acquire a 51% stake in Chengdu Xinyi, a national-level specialized, sophisticated, unique, and new “little giant” enterprise, for no more than RMB 675 million, to achieve a full industrial chain layout of “chip design + packaging and testing” [2][3]; second, the policy expectation of the US imposing a 25% tariff on semiconductors has stimulated the overall bullish sentiment of the domestic substitution sector [1]. From a fundamental perspective, the company’s operating revenue in the first three quarters of 2025 was RMB 518 million, a year-on-year increase of 2.55%, but its net profit was a loss of RMB 26.5 million, with profitability under pressure [0]. The current market value of RMB 7.267 billion is relatively high compared to its performance scale, providing limited fundamental support. Technically, the stock price shows a long arrangement with good volume-price coordination, but the RSI indicator has entered the overbought area, and continuous discounted block trades indicate that some institutions have the intention to cash out [4][5]. Comprehensive judgment shows that this round of rally is mainly driven by M&A expectations and sector sentiment, and it will take time for substantial improvement in fundamentals. Investors are advised to participate rationally, closely track the progress of the M&A and changes in fundamentals, and strictly control risk exposure.

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[0] Jinling Analysis Database - Quantitative Market Data and Technical Indicator Analysis

[1] Sina Finance - “Late Trading Surge! 301348, 301629 Hit 20% Daily Limit”, January 15, 2026

[2] OFweek Electronic Engineering Network - “RMB 675 Million: Chengdu Chip ‘Little Giant’ to Be Acquired”, January 2026

[3] Oriental Fortune Wealth Account - “Blue Arrow Electronics Locks in National-Level ‘Little Giant’ with RMB 675 Million Valuation”, January 13, 2026

[4] Oriental Fortune Network - “Block Trade: Blue Arrow Electronics Transacts RMB 13.493 Million”, January 15, 2026

[5] Hexun.com - “Blue Arrow Electronics Sees 152,000 Shares Traded at Discount in Block Trade”, January 14, 2026

[6] Sohu Securities - Blue Arrow Electronics Shareholding Structure Data

[7] The Paper - “A-Share Three Major Indices Mixed: Semiconductor Industry Chain Strengthens in the Afternoon”, January 15, 2026