Core Viewpoint - Basic Semiconductor, a leading Chinese silicon carbide power device company, has submitted its IPO application to the Hong Kong Stock Exchange, aiming to become the "first silicon carbide stock" amid a challenging capital market [1] Group 1: Financial Performance - Revenue has increased 2.6 times over three years, with figures of 117 million yuan, 221 million yuan, and 299 million yuan for 2022-2024, resulting in a compound annual growth rate (CAGR) of 59.9% [2] - The revenue from silicon carbide power modules surged from 5.05 million yuan in 2022 to 146 million yuan in 2024, accounting for 48.7% of total revenue by 2024 [2] - Despite revenue growth, the company reported cumulative losses of 821 million yuan over three years, with net losses of 242 million yuan, 342 million yuan, and 237 million yuan for 2022-2024 [3] Group 2: R&D and Production Expansion - High R&D expenditures and production expansion costs are the main reasons for ongoing losses, with R&D spending of 59 million yuan, 76 million yuan, and 91 million yuan for 2022-2024, representing 50.8%, 34.4%, and 30.5% of revenue respectively [3] - The company holds 163 authorized patents and 122 patent applications, with a R&D team comprising 28.9% of its workforce [3] - Basic Semiconductor operates three production bases and plans to establish two additional bases, expected to significantly increase production capacity by the end of 2026 and 2027 [3] Group 3: Market Position and Competition - The global silicon carbide power device market is projected to grow from 22.7 billion yuan in 2024 to 110.6 billion yuan in 2029, with a CAGR of 37.3% [4] - Basic Semiconductor ranks seventh globally and third in China within the silicon carbide market, but faces increasing competition and must continue investing in R&D to maintain its technological edge [4] - The company reported that its top five customers accounted for 63.1% of revenue in 2024, indicating a high customer concentration risk [4] Group 4: IPO and Future Outlook - The IPO proceeds are intended for expanding wafer and module production capacity, developing new silicon carbide products, and enhancing the global distribution network [5] - The gross margin for silicon carbide power modules improved from -75.5% to -27.9% by 2024, but profitability remains a concern [5] - The IPO represents both a validation of the company's technological capabilities and a high-risk venture in the evolving silicon carbide market [5]