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EPIWORLD(2726)
Analysis¡G
EPIWORLD is primarily engaged in the research and development, mass production, and sales of silicon carbide epitaxial wafers. It is a globally leading supplier of silicon carbide epitaxial wafers, which are core materials in the wide-bandgap semiconductor sector. Compared with traditional silicon wafers, silicon carbide epitaxial wafers offer multiple advantages, including superior temperature stability, higher breakdown voltage, and better thermal conductivity. These unique properties make silicon carbide wafers a key technological foundation for a wide range of applications. The group offers silicon carbide epitaxial wafers in various sizes, including 4-inch, 6-inch, and 8-inch. It is the world¡¦s first company to achieve large-scale commercial supply of 8-inch silicon carbide epitaxial wafers and the world¡¦s first and currently only company to break through 12-inch silicon carbide epitaxial wafer technology.
In 2025, 6-inch silicon carbide epitaxial wafers accounted for the vast majority of the group¡¦s sales. Although 6-inch wafers currently dominate the market and are expected to continue growing, the market size for 8-inch silicon carbide wafers is forecast to expand significantly. The group will continue to invest in the research, development, and production of both 6-inch and 8-inch wafers, with 8-inch products expected to occupy an increasingly larger share of sales. Hantian Tiancheng has been actively expanding its customer base, which now covers eight of the world¡¦s top ten silicon carbide power device companies. It is the only Chinese silicon carbide epitaxial enterprise that has entered the supply chains of major international and domestic players in large volumes. The group continues to strengthen its leadership in 8-inch epitaxy. It has secured more than 28 global 8-inch silicon carbide customers, laying a solid foundation for further volume growth in its products. Several of the group¡¦s core international customers have already successfully entered the supply chains of global AI computing power leaders such as Nvidia, allowing Hantian Tiancheng to directly and deeply benefit from the rapid development of the global AI industry.
In 2025, most companies in the industry fell into losses due to declining product prices and lower capacity utilization rates. Thanks to its leading technology, high focus, and efficient management, the group achieved excellent yield performance and strong cost control. It maintained continuous profitability, with 2025 net profit (non-IFRS) amounting to approximately RMB 198 million. Its gross margin significantly outperformed domestic and international peers, demonstrating strong resilience against industry cycles and initial product pricing power. The large-scale deployment of high-end epitaxial products has further enhanced added value and become an important profit driver. The group¡¦s operating cash flow has continued to maintain a healthy net inflow, while cash reserves and asset scale have grown steadily, providing a solid financial foundation for technology research and development as well as capacity expansion. (I do not hold the above stock.)
Strategy¡G
Buy-in Price: $120.00, Target Price: $140.00, Cut Loss Price: $113.00
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GUILIN FUDA(603166)
Analysis¡G
GLFoto Co., Ltd. is a leading domestic manufacturer of forged steel crankshafts, automotive clutches, and precision forgings, with core operations spanning commercial vehicles, passenger cars, and power systems for new energy vehicles. Its customer base includes major players in the new energy sector such as BYD, Geely, and Li Auto, as well as established traditional automakers like Cummins, Yuchai, and Volvo, forming a diversified structure. The company has developed a triple growth engine comprising "traditional stability, new energy expansion, and intelligent equipment breakthroughs," with hybrid crankshafts, electric drive gears, and precision forgings as its foundational business, while also entering high-potential sectors like robot reducers and lead screws to upgrade its business structure. As new energy vehicle sales in China surpass 50% of the market, demand for hybrid models is surging. As a key supplier to BYD and Geely, the company is projected to achieve over 30% year-on-year growth in hybrid crankshaft and electric drive gear business by 2026. The company has built China's first high-precision planetary roller screw mass production line (annual capacity of 30,000 units) and its self-developed reducers have entered small-scale delivery phases, positioning it to seize the commercialization opportunities in humanoid robotics from 2026-2027. Additionally, leveraging overseas designated projects, the company's export business has entered a harvest phase, with overseas revenue expected to significantly increase in 2026-2027. Given that overseas product gross margins are generally higher than domestic ones (e.g., forged parts' overseas gross margin has risen by over 15 percentage points), this will structurally boost overall profitability
Strategy¡G
Buy-in Price: RMB14.37, Target Price: 16.70, Cut Loss Price: RMB 13.00
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Foryou Group (002906.CH) - Second Growth Curve Gradually Becoming Clear
Company profileForyou Corporation was established in 1993 and is mainly engaged in the R&D, production and sales of automotive electronics and precision die-casting businesses. The Company's automotive electronics business mainly covers two core sectors, namely smart cockpit and advanced driver-assistance systems. Its precision die-casting business is centred on precision mould design and manufacturing technology, covering aluminium alloy, magnesium alloy and zinc alloy product lines. In addition, it actively explores and develops AI, robotics and other related businesses, including optical communication modules, AI high-speed connectors, robotics and other related component businesses. In 2025, the Company reported revenue of RMB13,048 million, up 28.46% yoy; net profit attributable to the parent company was RMB782 million, up 20.00% yoy. Investment SummaryQ1 Revenue Maintained High Growth
In Q1 2026, the Company reported revenue/net profit attributable to the parent company/net profit excluding non-recurring items of RMB3,096 million/RMB166 million/RMB159 million, respectively (RMB, the same below), up 24.37%/6.61%/5.89% yoy, respectively. Gross margin was 16.5%, down 1.7 ppts yoy. The slower profit growth compared with revenue growth was mainly due to factors such as price competition and rising raw material prices. The Company has established a raw material price linkage mechanism with most of its customers, and its operating results are expected to improve significantly from Q2. Automotive Electronics Business Continued to Grow, With Its Leading Position in Smart Cockpit Firmly EstablishedThe Company's automotive electronics business reported revenue of RMB9,675 million in 2025, up 27.25% yoy, accounting for 74.15% of total revenue. CAGR reached 35.66% from 2020 to 2025, maintaining high-quality growth. The Company has built a comprehensive product matrix and solution capabilities in the smart cockpit field. The market shares of HUD, in-vehicle wireless charging and other products continued to rank first in China, while the market shares of LCD instrument panels and central control screens rapidly rose to the forefront of the industry. The Company's customer structure continued to optimise, with a low dependence on any single customer, and the revenue contribution from some new energy vehicle makers and international automotive brands increased. Revenue from customers including Changan, BAIC, Xiaomi, Dongfeng, STELLANTIS, SAIC Volkswagen, BYD, Xpeng, NIO and Leapmotor increased significantly. Leveraging the ADAYO Automotive Open Platform (AAOP), the Company provides customers with "one-stop" overall smart cockpit solutions based on its implementation capabilities in cockpit domain controllers across multiple platforms including Qualcomm, SemiDrive and MediaTek, as well as mainstream large models, demonstrating significant platform-based competitive advantages. Precision Die-Casting Business Improved Its Process Technologies, Enhancing Overall CompetitivenessThe Company overcame a number of difficult technical challenges in mould design and manufacturing, expanded the application of highly flame-retardant magnesium alloy materials, and promoted the deep integration of 3D vision guidance with AI and robotics to improve the flexible changeover capability of automated manufacturing cells. Its capabilities in complex and difficult production processes, including high-vacuum combined extrusion, friction stir welding of aluminium-magnesium alloys, profiling spraying, multi-spindle machining and vacuum adsorption, continued to improve. The precision die-casting business delivered particularly impressive performance in 2025, reporting revenue of RMB2,859 million, up 38.47% yoy, with growth exceeding that of the automotive electronics business. CAGR reached 35.08% from 2020 to 2025. Second Growth Curve Gradually Becoming Clear, with Capacity Expansion Releasing Growth MomentumThe Company actively explores non-automotive businesses such as AI and robotics: 1) In the AI infrastructure field, optical communication modules, high-speed connectors and data centre cooling system components have secured project nominations; 2) In the robotics field, the Company has received orders for robotics display screens and joint module components, and jointly developed robotics main and auxiliary controllers, with brand momentum surging and sales increasing exponentially. Following a record-high scale of capacity construction in 2025, capital expenditure is expected to remain at a high level in 2026, focusing on the Thailand Production Base, the expansion of the Automotive Electronics Huizhou Base, the expansion of the zinc alloy die-casting business in the AI field, and Phase III of the Precision Die-Casting Changxing Project. Capacity expansion is being carried out based on orders on hand, providing solid support for sustained business growth going forward. Among them, the Thailand Production Base is expected to commence production in Q4 2026, providing strong support for overseas business expansion. Investment ThesisThe Company's traditional automotive business is growing steadily and rapidly, while its non-automotive business offers enormous growth potential. We are optimistic about the long-term development of the Company and expect EPS to be 1.81/2.18/2.63 yuan respectively for 2026/2027/2028, a yoy increase of 22%/21%/21%. We offer a target price of 36.3 yuan, respectively 20/16.6/13.8x P/E for 2026/2027/2028, and an "Buy" rating. (Closing price as at 5 June) Historical P/E Band 
Source: Wind, Company, Phillip Securities Hong Kong Research
RiskProgress of new production line is below expectations
Electric vehicle sales fall short of expectations
Macroeconomic downturn affects product demand
Sharply rising raw material prices or sharply falling product prices Financials
(Closing price as at 5 June) Download PDF Version
| Recommendation on 17-6-2026 | | Recommendation | BUY (Initiation) | | Price on Recommendation Date | $ 28.340 | | Suggested purchase price | N/A | | Target Price | $ 36.300 |
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