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SICC(2631)
Analysis¡G
SICC is primarily engaged in the R&D, manufacturing, and sales of silicon carbide (SiC) substrates. Silicon carbide is a compound material composed of carbon and silicon elements, featuring high hardness and excellent physical and chemical properties. Compared with silicon-based semiconductors, wide-bandgap semiconductors represented by silicon carbide and gallium nitride exhibit outstanding performance advantages from the material level to the device level, with characteristics such as high frequency, high efficiency, high power, high voltage resistance, and high temperature resistance. Silicon carbide substrates are widely used in downstream products including power semiconductor devices, radio frequency (RF) semiconductor devices, optical waveguides, TF-SAW filters, heat dissipation components, etc. The main application industries include electric vehicles, photovoltaics and energy storage systems, power grids, rail transit, communications, AI glasses, smartphones and semiconductor lasers. Silicon carbide material is an inevitable choice for the growth and innovation of the AI industry and has enormous potential in data centers, power infrastructure, and end-use applications.
As a substrate manufacturer, SICC is an upstream participant in the entire silicon carbide semiconductor device industry chain and serves as a critical link that transforms raw materials into substrates usable by downstream customers. The Group focuses on the R&D and industrialization of high-quality silicon carbide substrates. It is one of the few companies globally capable of achieving mass production of 8-inch silicon carbide substrates, one of the first to commercialize silicon carbide substrates from 2-inch to 8-inch, and the first company to launch 12-inch silicon carbide substrates. The Group has established business cooperation relationships with more than half of the world¡¦s top ten power semiconductor device manufacturers, and its customer base has been further improved. At the same time, the Group continues to expand into emerging fields such as optics, has established cooperative relationships with leading global optical companies, and has obtained multiple orders from related customers, achieving sales of silicon carbide substrate products in the optical field.
The Group continues to increase the production capacity of its core products. The production capacity at the Jinan factory is steadily advancing through technological and process improvements. The Shanghai Lingang factory reached its planned annual capacity of 300,000 pieces of conductive substrates ahead of schedule in mid-2024 and is currently advancing its Phase II capacity expansion plan. The combined designed capacity of the two factories has now exceeded 400,000 pieces. Currently, the Group has formed a product matrix of 6-inch, 8-inch, and 12-inch silicon carbide substrates, including 12-inch high-purity semi-insulating silicon carbide substrates, 12-inch conductive P-type silicon carbide substrates, 12-inch conductive N-type silicon carbide substrates. As the silicon carbide industry fully enters the ¡§12-inch new era,¡¨ the Group will use its ultra-large-size technology and products as a fulcrum to continue deep cultivation in the blue-ocean market of silicon carbide semiconductor materials. (I do not hold the above stock)
Strategy¡G
Buy-in Price: $55.00, Target Price: $60.00, Cut Loss Price: $53.00
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KARRIE INT'L(1050)
Analysis¡G
As a leading global supplier in the server chassis sector, Kali International is deeply benefiting from the explosive growth in AI computing power demand, with AI server chassis emerging as a key growth driver. The company has successfully been included in NVIDIA's qualified supplier list for server chassis and cabinet components and has delivered prototype products for next-generation AI servers such as the MGX and DGX series. Meanwhile, its application-specific integrated circuit (ASIC)-related server products have begun shipments, marking a significant milestone in entering the core AI server supply chain and laying the foundation for future order growth. As AI servers demand improved cooling and reliability, the unit prices and gross margins of related products have also improved accordingly. The company is actively expanding its "China + Thailand" dual production bases, planning to increase the production capacity of its Thailand facility to match that of mainland China to address overseas order growth and mitigate trade risks. For the six months ended September 30, 2025, the company reported revenue of HK$1.609 billion, a yoy increase of 5.4%; net profit of HK$102 million, a yoy decrease of 0.1%; and basic earnings per share of HK$0.05, with a proposed interim dividend of HK$0.015 per share.
Strategy¡G
Buy-in Price: RMB2.76, Target Price: RMB3.20, Cut Loss Price: RMB2.50
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Daimay (603730 CH) - Expanding Roof Business to Open More Growth Potential
Investment SummaryFY2025 Q3 Remain Stable
The Company released its Q3 2025 report: In the first three quarters of 2025, the company achieved revenue/net profit/net profit excluding non-recurring items of RMB 4.794 billion/RMB 445 million/RMB 600 million, representing yoy growth of -0.19%/-28.62%/-3.09%, with a gross margin of 28.04%, a yoy decrease of -0.22 percentage points. In Q3 2025 alone, the Company achieved revenue/net profit/net profit excluding non-recurring items of RMB 1.62 billion/RMB 203 million/RMB 198 million, which represents yoy increases of +6.65%/+0.24%/+0.75%.
Fire Impact in the First Half Gradually Eliminated
Despite a challenging overseas market in Q3, the performance of Daimay remain stable: From the demand of major auto markets in Q3 2025: North American vehicle sales were 5.104 million units, down slightly by 2.16% qoq; European passenger car registrations were 3.1136 million units, down by 9.33% qoq. However, the company's Q3 revenue/net profit excluding non-recurring items showed qoq increases of +2.38%/+0.83%, reflecting its stable operations. Additionally, a fire in the second quarter at the Company's Mexican plant led to non-operating expenses of USD 33.751 million, equivalent to RMB 242 million. These damaged assets are all covered under insurance claims. Daimay has submitted a claim letter to AXA Insurance and expects the final insurance compensation to cover the actual losses.
Expanding Roof Business to Open More Growth Potential
In 2023, Daimay issued convertible bonds to expand the production of roof and roof assembly products. The project has secured customer appointments, including 300,000 sets of automotive roof system integration products and 600,000 sets of automotive roof products at the Mexican Daimei facility, and 700,000 sets of automotive roof products at the Zhoushan Yindai facility. The company's main products, such as sun visors, headrests, and central roof controllers, have an equivalent per vehicle value of RMB 588. The roof products and roof integration system products from the convertible bond project have a per vehicle value of RMB 700 and RMB 4,000, respectively. This value increase will open up growth potential for Daimay's future performance. According to the prospectus of the convertible bonds, it is estimated that once the project reaches full capacity, Daimay's revenue will increase by RMB 844 million in the first year, accounting for 16.4% of Daimay's 2022 revenue, and by RMB 2.11 billion in the third year. On the net profit side, after the project reaches full capacity, net profit will increase by RMB 111 million in the first year, and RMB 289 million in the third year. Currently, the company's "Annual Production of 700,000 Roof Products" project has been completed, while the "Mexican Automotive Interior Parts Industrial Base Construction Project" is expected to be delayed from January 2025 to December 2026. Upon completion, it is expected to add 300,000 sets of automotive roof system integration products and 600,000 sets of automotive roof products annually. The capacity expansion will provide assurance for securing new orders from North American customers in the future. Company profileDaimay was established in 2001 and is a well-known manufacturer in the global automotive interior parts sector. Its main products include automotive interior components for roof systems and seat systems, such as sun visors, headrests, roof linings, central roof controllers, armrests, and other automotive interior products. Among these, the Company's core product, the automotive sun visor, ranks first globally in its segment, with a market share exceeding 40% in 2022. In 2024,Daimay reported a revenue of RMB 6.377 billion, a yoy increase of +8.8%, with 85.35% of the revenue coming from overseas markets. The net profit was RMB 802 million, a yoy increase of +22.66%. Investment Thesis & ValuationThe Company's business in the automotive sector remains stable, and the projects funded by the convertible bonds are about to contribute to revenues, providing momentum for performance growth. We are optimistic about the Company's development prospects.
As analyzed above, we expected diluted EPS of the Company to RMB 0.41/0.48/0.56 of 2025/2026/2027. And we accordingly gave the target price to 9.17, respectively 19x P/E for 2026. "Accumulate" rating. (Closing price as at 25 November) Historical P/E Band
Source: Wind, Company, Phillip Securities Hong Kong Research Financials
(Closing price as at 25 November 2025) Click here to download PDF version...
| Recommendation on 1-12-2025 | | Recommendation | Accumulate (Initiation) | | Price on Recommendation Date | $ 8.210 | | Suggested purchase price | N/A | | Target Price | $ 9.170 |
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