HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sg-micro-corp-5c356907-201f-4bd8-8190-24de284e1329" target="_blank" data-smartkarma-citation="entities:50247:1" rel="noopener">SG Micro (3661 HK)</a>, a leading analog IC company, has a solid track record of earnings. Its IPO targets to raise net proceeds of HK$4.5bn, which is reasonably sizeable.</li>
<li>The market is expecting 3-year EPS CAGR of 33.1%, putting the IPO price at 59.3x FY26 PER. The 107% earnings growth in 1Q26 affirms its outlook. </li>
<li>We value it on 2.1x PEG, same as global peers, translating into 70x PER, or 18% upside. Our estimated fair value of HK$100.50 means a H-A discount of 34.1%.  </li>
</ul>



SG Micro (3661 HK), a leading analog IC company, has a solid track record of earnings. Its IPO targets to raise net proceeds of HK$4.5bn, which is reasonably sizeable.
The market is expecting 3-year EPS CAGR of 33.1%, putting the IPO price at 59.3x FY26 PER. The 107% earnings growth in 1Q26 affirms its outlook. 
We value it on 2.1x PEG, same as global peers, translating into 70x PER, or 18% upside. Our estimated fair value of HK$100.50 means a H-A discount of 34.1%.  


SG Micro Corp (3661 HK) IPO: A High-Growth Play

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://asia.nikkei.com/business/business-deals/toyota-supplier-denso-to-withdraw-proposal-to-take-over-rohm" target="_blank" rel="noopener">Nikkei reports</a> that <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> will withdraw its proposal for <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> as the two sides were “<em>unable to see eye-to-eye on an offer.</em>” </li>
<li>Several factors, such as an unattractive offer, significant peer re-rating, and Rohm's preference for the standalone path (MoU with Toshiba/Mitsubishi Electric), likely contributed to Denso’s withdrawal. </li>
<li>The shares will be under pressure due to the deal break (estimated decline of around 10%). A re-rating in the medium term depends on execution, starting with the Toshiba MoU. </li>
</ul>


The Nikkei reports that Denso Corp (6902 JP) will withdraw its proposal for ROHM Co Ltd (6963 JP) as the two sides were “unable to see eye-to-eye on an offer.” 
Several factors, such as an unattractive offer, significant peer re-rating, and Rohm's preference for the standalone path (MoU with Toshiba/Mitsubishi Electric), likely contributed to Denso’s withdrawal. 
The shares will be under pressure due to the deal break (estimated decline of around 10%). A re-rating in the medium term depends on execution, starting with the Toshiba MoU. 


Global Healthcare Analyst

Tina Banerjee

<ul>
<li>Gpixel Changchun launched Hongkong IPO aiming to raise up to HK$ 2.6B. They provide CMOS image sensors (CIS) in industrial imaging, scientific imaging, photography and video, and medical imaging.  </li>
<li>Gpixel Changchun intends to use the IPO proceeds for enhancing R&amp;D capabilities, product innovation, expanding production facilities and overseas business development.</li>
<li>Relatively, the valuation seems reasonable given the fact that company enjoys a market leader position in China and third position globally in the industrial and scientific imaging segment.</li>
</ul>


Gpixel Changchun launched Hongkong IPO aiming to raise up to HK$ 2.6B. They provide CMOS image sensors (CIS) in industrial imaging, scientific imaging, photography and video, and medical imaging.  
Gpixel Changchun intends to use the IPO proceeds for enhancing R&amp;D capabilities, product innovation, expanding production facilities and overseas business development.
Relatively, the valuation seems reasonable given the fact that company enjoys a market leader position in China and third position globally in the industrial and scientific imaging segment.


Gpixel Changchun IPO: Investors Can Sense a Reasonable Bet Here Given The Strengths and Positioning

Epiworld International / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/epiworld-international-co-ltd" target="_blank" data-smartkarma-citation="entities:47626:1" rel="noopener">EpiWorld International (2726 HK)</a>, while it is a global leader in the silicon carbide (SiC) epitaxy industry, has a weak profit record. Its IPO price looks demanding. </li>
<li>Its net profit will likely be relatively flat in FY26, before picking up in FY27 and FY28. However, whether the industry will bottom in 2H26 remains an unknown.</li>
<li>The stock's valuations of 117x PER and 35.6x P/S are not cheap relative to peers, implying that risks outweigh returns in its H-share IPO.</li>
</ul>



EpiWorld International (2726 HK), while it is a global leader in the silicon carbide (SiC) epitaxy industry, has a weak profit record. Its IPO price looks demanding. 
Its net profit will likely be relatively flat in FY26, before picking up in FY27 and FY28. However, whether the industry will bottom in 2H26 remains an unknown.
The stock's valuations of 117x PER and 35.6x P/S are not cheap relative to peers, implying that risks outweigh returns in its H-share IPO.


EpiWorld Intl (2726 HK) IPO: A Pricy (And Risky) Choice

Montage Technology / Equity Capital Markets

<ul>
<li>As a global leader in fabless IC design, focusing on interconnect solutions for cloud computing and AI infrastructure, <a href="https://www.smartkarma.com/entities/montage-technology-co-ltd-c827a672-7027-4114-b744-0fc66a5d1d98" target="_blank" data-smartkarma-citation="entities:46333:1" rel="noopener">Montage Technology (6809 HK)</a>'s 3-year EPS CAGR will reach 43.2%.</li>
<li>We assess a fair price at HK$147.4, or 45.8x FY26 PER, a 20% premium over <a href="https://www.smartkarma.com/entities/rambus-inc" target="_blank" data-smartkarma-citation="entities:7214:1" rel="noopener">Rambus (RMBS US)</a>, the third-largest player globally. <a href="https://www.smartkarma.com/entities/montage-technology-co-ltd-c827a672-7027-4114-b744-0fc66a5d1d98" target="_blank" data-smartkarma-citation="entities:46333:1" rel="noopener"></a>
</li>
<li>This represents a 37.9% upside, also putting it in line with the average of 28% discount of the H-share IPOs to A-shares since 2025.</li>
</ul>


As a global leader in fabless IC design, focusing on interconnect solutions for cloud computing and AI infrastructure, Montage Technology (6809 HK)'s 3-year EPS CAGR will reach 43.2%.
We assess a fair price at HK$147.4, or 45.8x FY26 PER, a 20% premium over Rambus (RMBS US), the third-largest player globally. 

This represents a 37.9% upside, also putting it in line with the average of 28% discount of the H-share IPOs to A-shares since 2025.


Montage Technology (6809 HK) IPO: Decent Upside Potential

China

Hangzhou Silan Microelectronics Co., Ltd develops, researches, tests, and sells integrated circuits.

Hangzhou Silan Microelectronics Co., Ltd (600460 CH)

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Hangzhou Silan Microelectronics Co., Ltd (600460 CH)

SG Micro Corp (3661 HK) IPO: A High-Growth Play

SG Micro is a leading analog IC company with a solid earnings record, aiming to raise HK$4.5bn in its IPO. With a 33.1% EPS CAGR, the IPO is...

Osbert Tang, CFA

ROHM (6963 JP): Denso Pulls the Plug

The shares will be under pressure due to the deal break (estimated decline of around 10%). A re-rating in the medium term depends on execution,...

Arun George

Gpixel Changchun IPO: Investors Can Sense a Reasonable Bet Here Given The Strengths and Positioning

Gpixel Changchun launches Hong Kong IPO to raise funds for R&D, innovation, expansion and overseas development. Strong market position in...

Tina Banerjee

EpiWorld Intl (2726 HK) IPO: A Pricy (And Risky) Choice

EpiWorld International is a global leader in SiC epitaxy but has a weak profit record, with a demanding IPO price and an uncertain industry...

Osbert Tang, CFA

Montage Technology (6809 HK) IPO: Decent Upside Potential

Montage Technology's 3-year EPS CAGR is projected to be 43.2%, with a fair price estimated at HK$147.4, a 20% premium over Rambus. This offers a...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SG Micro Corp (3661 HK) IPO: A High-Growth Play

​SG Micro is a leading analog IC company with a solid earnings record, aiming to raise HK$4.5bn in its IPO. With a 33.1% EPS CAGR, the IPO is...

Osbert Tang, CFA

ROHM (6963 JP): Denso Pulls the Plug

The shares will be under pressure due to the deal break (estimated decline of around 10%). A re-rating in the medium term depends on execution,...

Arun George

Gpixel Changchun IPO: Investors Can Sense a Reasonable Bet Here Given The Strengths and Positioning

​Gpixel Changchun launches Hong Kong IPO to raise funds for R&D, innovation, expansion and overseas development. Strong market position in...

Tina Banerjee

EpiWorld Intl (2726 HK) IPO: A Pricy (And Risky) Choice

​EpiWorld International is a global leader in SiC epitaxy but has a weak profit record, with a demanding IPO price and an uncertain industry...

Osbert Tang, CFA

Montage Technology (6809 HK) IPO: Decent Upside Potential

​Montage Technology's 3-year EPS CAGR is projected to be 43.2%, with a fair price estimated at HK$147.4, a 20% premium over Rambus. This offers a...

Osbert Tang, CFA

SG Micro is a leading analog IC company with a solid earnings record, aiming to raise HK$4.5bn in its IPO. With a 33.1% EPS CAGR, the IPO is...

Gpixel Changchun launches Hong Kong IPO to raise funds for R&D, innovation, expansion and overseas development. Strong market position in...

EpiWorld International is a global leader in SiC epitaxy but has a weak profit record, with a demanding IPO price and an uncertain industry...

Montage Technology's 3-year EPS CAGR is projected to be 43.2%, with a fair price estimated at HK$147.4, a 20% premium over Rambus. This offers a...