2026-01-08 02:43Summary of SICC (688234.SS) Conference Call Company Overview - Company: SICC (688234.SS) - Industry: Semiconductor, specifically focusing on Silicon Carbide (SiC) substrates Key Points 1. Strong Technology - SICC has a leading market position in semi-insulating SiC substrates - First company to deliver 12-inch SiC substrates - Early developer of liquid phase growth (LPG) technology, combining LPG with vapor phase methods - Fully in-house designed crystal growth furnace and continuous enhancement in SiC ingot thickness - Superior product quality allows for higher average selling prices (ASP) and better yield rates for clients producing SiC devices [2][3] 2. Expanding Applications - Management is optimistic about expanding SiC applications across various sectors: - Electric Vehicles (EVs) for fast driving - Power semiconductors in AI servers (800V AIDC) - Augmented Reality (AR) glasses, specifically optical waveguide lenses - Advanced packaging for better heat conduction to support rising GPU computing power - Expected showcase of SiC products in AR glasses in the second half of 2026, with significant revenue contributions anticipated in 2027 - A single 12-inch SiC substrate can support the production of 10-12 AR glasses [3][4] 3. SiC Substrate Pricing Trend - Substrate prices are projected to decline by mid-double digits in 2025, with a continued downward trend expected in 2026 - This price decline is anticipated to facilitate wider adoption of SiC across various applications - Smaller vendors may exit the market due to lower profits - SICC's management remains positive about profitability due to their leading market position, strong technology, and product quality - Ongoing enhancements in production costs and technology development (e.g., thicker ingots and LPG) are expected to support gross margin (GM) expansion in the coming years [4][9] 4. Financial Projections - 12-month target price set at Rmb115, based on a P/E ratio of 30.9x for 2029E - Revenue projections for the next few years: - 2024: Rmb1,768.1 million - 2025: Rmb1,603.9 million - 2026: Rmb2,878.5 million - 2027: Rmb4,167.7 million - Expected EBITDA growth from Rmb436.4 million in 2024 to Rmb1,639.3 million in 2027 - EPS forecasted to increase from Rmb0.42 in 2024 to Rmb2.18 in 2027 [10][8] 5. Risks - Potential risks include: - Slower-than-expected capacity expansion and shipment ramp-up of 6-inch substrates - Slower penetration into high power supply applications (e.g., EVs, transportation) - Increased competition in the SiC substrate market - Volatile valuation due to short listing history - Loss of access to key equipment or supply tightness [9][10] Conclusion - SICC is positioned strongly within the SiC substrate market, with a focus on technology and expanding applications - The company is expected to benefit from declining substrate prices and increasing demand across various sectors - Financial projections indicate significant growth potential, although risks remain that could impact performance