On September 22 to September 29, Zhu Yu, Deputy General Manager of Shenzhen Longsys Electronics Co., Ltd. (ASX: 301308), completed a "top-level" share reduction through centralized bidding transactions, selling 598,400 shares, or 0.1393% of the company's total A-share capital on the announcement date, at an average price of 339.63 yuan per share, successfully cashing out 203 million yuan as the reduction plan period expired and was fully implemented.

Recently, Longsys (ASX: 301308), a leading domestic memory module manufacturer, announced that Deputy General Manager Zhu Yu rushed to complete his previously disclosed reduction plan at its tail end, selling a total of 598,400 shares and cashing out approximately 200 million yuan.

Combined with the reduction completed in September last year, Zhu Yu has sold over 1.17 million shares in two rounds, cashing out a total of approximately 266 million yuan. Shortly before Zhu Yu's reduction plan was completed, Longsys had just finished an 800 million yuan share buyback, with the repurchased shares intended for equity incentives or employee stock ownership plans.

As of the October 8 close, Longsys (ASX: 301308) shares stood at 288.6 yuan per share, down more than 60% from the stock price high set in early July this year, with the latest market capitalization at approximately 132.7 billion yuan.

In sharp contrast to the stock price decline is Longsys's strong performance trajectory: in the first half of this year, the company achieved revenue of 24.088 billion yuan, a year-on-year increase of 136.26%; it recorded a net profit attributable to shareholders of 10.577 billion yuan, a year-on-year increase of 71,528.66%.

However, the company also faces hidden concerns such as a relatively large inventory scale, high concentration of raw material suppliers, and a relatively high proportion of overseas procurement.

Deputy General Manager Rushes to Sell Before Deadline, Cashing Out 266 Million Yuan in Two Rounds

According to Longsys, Zhu Yu's reduction plan was pre-disclosed as early as June 5: due to personal financial needs, he planned to sell no more than 598,400 shares of the company through centralized bidding transactions and/or block trades during the period from June 30 to September 29, representing 0.1414% of the company's total A-share capital at that time.

After this reduction was completed, Zhu Yu still held 1,795,100 shares of Longsys, representing 0.4178% of the company's total share capital.

It is worth noting that within the planned reduction period (June 30 to September 29), Longsys's stock price rapidly fell from its historical high of 749.88 yuan per share on July 1. As of the September 29 close, the company's stock price was 311.66 yuan per share, shrinking by nearly 60%. Zhu Yu rushed to complete the reduction near the end of the reduction plan, just avoiding the company's stock price high, with his final reduction price range falling between 310.5 yuan per share and 357.5 yuan per share.

Longsys stated that Deputy General Manager Zhu Yu is not the company's controlling shareholder or actual controller, and the implementation of this reduction plan will not cause a change in the company's control rights, nor will it have a material impact on the company's equity structure, governance structure, or going concern.

According to Longsys's previously disclosed prospectus, Zhu Yu was born in 1974 and graduated from the former Xi'an Engineering College (now Chang'an University) with a bachelor's degree in applied geophysics. From 1997 to 2003, Zhu Yu served as head of the finance section at the Yongqing Oscilloscope Factory of Guiyang Instrument and Meter Industry Company; from 2003 to 2005, he served as finance director of Guizhou Hongtai Property Development Co., Ltd.; from 2005 to 2014, he served as general manager of the group finance department at Huabao International Holdings Limited; from 2014 to 2015, he served as finance director of Shenzhen Fangdd Network Technology Co., Ltd.; and from 2015 to 2016, he served as director of the finance department at Shenzhen Tongchuang Weiye Asset Management Co., Ltd.

In 2016, Zhu Yu joined Longsys and once held positions including company director, deputy general manager, and head of finance. In December 2025, due to adjustments in his assigned responsibilities, Zhu Yu applied to resign from the position of head of finance but continued to serve as the company's deputy general manager.

A review found that before the implementation of this reduction plan, Zhu Yu had carried out two operations—one increase and one decrease. In the second half of 2023, when the storage industry was in a downward cycle, the company's actual controller, controlling shareholder, chairman and general manager Cai Huabo, together with two deputy general managers—Wang Jingyang and Zhu Yu—jointly announced increase plans.

Among them, from October 31, 2023 to November 21, 2023, Zhu Yu used his own funds to increase his holdings by a total of 30,800 shares through centralized bidding transactions, representing 0.01% of the company's total share capital at that time, at an average transaction price of 97.86 yuan per share, with the increase amount totaling approximately 3.01 million yuan (excluding fees).

According to Longsys's announcement disclosed last December on the expiration of the senior management share reduction plan, from September 2 to September 19, 2025, Zhu Yu, due to personal financial needs, sold a total of 577,300 shares of the company through centralized bidding transactions, representing 0.1377% of the company's total share capital at that time, at an average reduction price of 108.76 yuan per share, cashing out approximately 63 million yuan.

Including the round just completed recently, Zhu Yu has sold over 1.17 million shares in two reductions, cashing out a total of approximately 266 million yuan.

Company Spends 800 Million Yuan on Buyback, Yet Fails to Halt Stock Price Decline

According to Tianyancha, Shenzhen Longsys Electronics Co., Ltd. was incorporated in April 1999 and later listed on the ChiNext board of the Shenzhen Stock Exchange in August 2022. The company is mainly engaged in the research and design, packaging and testing, technical support, and sales of memory and controller chips.

It is worth mentioning that shortly before Zhu Yu's reduction plan was completed, Longsys had just completed an 800 million yuan share buyback.

According to an announcement disclosed by Longsys on September 21, from September 8 to 18, the company repurchased 2,290,600 A-shares through its dedicated repurchase securities account via centralized bidding transactions, accounting for 0.53% of total share capital, with a maximum transaction price of 365.38 yuan per share and a minimum transaction price of 328.04 yuan per share, with total transaction amount of approximately 800 million yuan (including transaction fees).

It is reported that this was Longsys's first share buyback since listing, initiated by controlling shareholder, actual controller, chairman and general manager Cai Huabo on July 23. At that time, Cai Huabo proposed that the company use its own or self-raised funds to repurchase part of its already issued RMB ordinary shares (A-shares) through centralized bidding transactions, with total repurchase funds of no less than 400 million yuan (inclusive) and no more than 800 million yuan (inclusive), to be used for equity incentives or employee stock ownership plans.

Regarding the reasons and purposes for Cai Huabo's proposal for the company to repurchase shares, Longsys stated in the announcement that it was "based on confidence in the company's future development and recognition of the company's value, in order to establish and improve the company's long-term incentive mechanism, fully mobilize employee enthusiasm, effectively bind shareholder interests, company interests, and employees' personal interests closely together, and promote the company's healthy, stable, and sustainable development."

The timing of Cai Huabo's proposal for the company to repurchase shares coincided with a deep correction in the storage sector. As of the July 23 close, Longsys's stock price had fallen by half from the high of 749.88 yuan per share set earlier in the month to 375.85 yuan per share.

After the share buyback news was released, combined with positive semi-annual report news, Longsys's stock price saw a small rebound, once recovering to 442 yuan per share on August 11. However, afterward Longsys's stock price fell again. As of the October 8 close, the company's stock price was 288.6 yuan per share, down more than 60% from the high.

Interim Net Profit Surges 715-Fold, Hidden Concerns Behind Strong Performance

In sharp contrast to the stock price correction, Longsys once again set a new record in terms of performance. According to Longsys's latest disclosed financial report, in the first half of this year, the company achieved revenue of 24.088 billion yuan, a year-on-year increase of 136.26%; it recorded a net profit attributable to shareholders of 10.577 billion yuan, a year-on-year increase of 71,528.66%.

Regarding this rather impressive performance report for the first half, Longsys believes there were three drivers behind the surge in performance. First, AI applications are driving growth in storage demand; second, growth in key businesses is driving the company's performance improvement; third, the accelerated application of self-developed chips is building the foundation of its technical capabilities.

Since the third quarter of 2025, supported by massive demand for storage from AI-related applications and data center infrastructure construction, the semiconductor storage market has entered a period of rapid expansion. In the cloud market, the training and inference of AI models involve intensive data reading and writing, driving demand from AI servers and data centers for large-capacity, high-bandwidth, and high-reliability storage products. In the edge market, the launch of AI phones, AI computers, smart cars, AI wearable devices, and embodied intelligence devices has led to increasing local data generation, model execution, and real-time interaction, imposing stricter new requirements on memory performance, power consumption, and size.

In terms of major key businesses, the company maintained its leading position in edge AI storage during the period and continued to expand the influence of its overseas business through the Zilia and Lexar brands, while growth in enterprise-grade storage and automotive-grade storage also drove the company's performance growth to a certain extent.

In a telephone conference with Yongying Fund on September 28, Longsys said that recently Qualcomm announced multi-party cooperation with partners including Longsys to deeply adapt and optimize inference for the StepEdge-Omni30B-MoE (Mixture of Experts) model on the edge side, successfully creating an edge intelligent agent assistant with autonomous service and personalized capabilities.

Longsys also revealed that in addition to this cooperation with Qualcomm, the company has carried out adaptation work for edge AI storage solutions with several major global chip manufacturers including AMD and Unisoc. The financial report shows that in the first half of this year, Longsys achieved overseas revenue of 17.017 billion yuan, a year-on-year increase of 142.27%, accounting for 70.65% of total revenue; the company's enterprise-grade storage business continued to grow rapidly, with revenue reaching 2.14 billion yuan, a year-on-year increase of 208.8%.

At the same time, Longsys is also accelerating the self-development progress of "controller chips" to shed the stereotype of being an "assembly plant." In the field of high-end controller chips, the company has achieved breakthroughs in multiple controller chips and key core technologies, including UFS 4.1, UFS 3.1, and UFS 2.2.

However, while the AI boom drives performance growth, Longsys also faces risks such as a relatively large inventory scale, high concentration of raw material suppliers, and a relatively high proportion of overseas procurement. As of the end of the first half, Longsys's inventory book value was 25.777 billion yuan, accounting for 60.12% of total assets, mainly due to the increase in the balance for the period brought by strategic stockpiling.

Longsys admitted that with the growth of the company's overall operating scale, the company's period-end inventory scale is relatively large and growing rapidly, and may further increase as the company's operating scale expands. At the same time, because the company's main raw material is storage wafers, and the storage wafer industry has high industry concentration and is mainly supplied by overseas manufacturers, the company's suppliers are relatively concentrated and the proportion of overseas procurement is relatively high.

In the future, whether Longsys can continue to maintain performance growth and achieve a recovery in its stock price remains to be seen.