2026-01-19 02:32Summary of SICC Co Ltd Conference Call Company and Industry Overview - Company: SICC Co Ltd (688234.SS) - Industry: Greater China Technology Semiconductors Key Points and Arguments 1. SiC Substrate Pricing Trends: - 6-inch SiC substrate prices have increased by approximately 15% to Rmb2,100 (~US$300) due to vendors bundling with higher margin products to improve profitability [2] - In contrast, pricing for 8-inch substrates continues to decline, reaching around Rmb4,500 (~US$640) [2] 2. Profitability Outlook for SICC: - SICC's profitability is expected to improve as 6-inch pricing rebounds and the company benefits from technological advancements and economies of scale [3] - The share price of SICC rose 26% year-to-date to Rmb111.19 as of January 16, 2026, outperforming the Shanghai Composite Index, which gained 2% in the same period [3] 3. Market Reaction: - The market's reaction to SICC's share price increase is viewed as an overreaction, suggesting potential volatility in investor sentiment [3] 4. Growth Opportunities: - The total addressable market (TAM) opportunities for augmented reality (AR) glass and AI data centers have been previously assessed, indicating potential growth areas [3] - However, for newer growth drivers like interposers and heat sinks, it is considered too early to evaluate their impact [3] Financial Metrics - Current Share Price: Rmb111.19 - Market Capitalization: Rmb47,779.6 million - 52-Week Range: Rmb49.09 - Rmb111.19 - Projected Revenue: - 2025: Rmb1,764 million - 2026: Rmb2,119 million - 2027: Rmb2,442 million [5] Valuation and Risks - Valuation Methodology: Utilizes a P/B ratio of 5.4x based on historical averages since the company's listing in January 2022, reflecting the industry's volatility [9] - Upside Risks: - Lower-than-expected erosion in SiC substrate pricing - More long-term agreements with global integrated device manufacturers (IDMs) - Faster market share gains compared to peers [10] - Downside Risks: - Higher-than-expected erosion in SiC substrate pricing - Fewer long-term agreements with IDMs - Slower market share gains compared to peers [10] Additional Insights - Analyst Ratings: The stock is rated as "Equal-weight" with a price target of Rmb67.10, indicating a potential downside of 40% from the current price [5] - Earnings Projections: - EPS for 2025 is projected at Rmb0.06, with a gradual increase expected in subsequent years [5] This summary encapsulates the critical insights from the conference call regarding SICC Co Ltd, highlighting the company's current market position, pricing trends in the SiC substrate market, and future growth opportunities along with associated risks.