Fair-Value Report — SICC Co., Ltd. (2631.HK)
Insider Signal
Buyer: Point72 Hong Kong Limited (Steven Cohen's Point72 group, Hong Kong entity) — an existing substantial shareholder adding to its position, not a first-time entrant.
Transaction: On-exchange purchase (HKEX reason code 1101) of 289,100 H-shares at an average price of HKD 71.8316, trade value ≈ HKD 20.77 million. Event date 2026-09-22; disclosed 2026-09-25 (filing CS20260925E00068).
Holding change: long position rose from 5.86% → 6.39% of H-shares in issue (+0.53pp), taking Point72's stake to 3,508,400 H-shares out of ~54.9 million H-shares in issue.
Assessment: this is a genuine open-market accumulation by a real, named institutional buyer — not a placing, pledge, control-default, or nominee/custodian artifact. It clears the screen. Because the H-float is thin (~54.9M shares), a 0.53pp move corresponds to a modest ~HKD 21M ticket, so treat the size as directionally meaningful rather than a large-scale conviction bet.
Verified Snapshot
Total shares in issue (H+A combined) ≈484.9M, unchanged from our prior report — we found no evidence of any placing, subscription, or convertible issuance between Aug–Sep 2026 (checked against a BVPS-consistency trail: FY2025 CNY14.80 → Q1 2026 CNY14.68 → H1 2026 CNY14.66, a smooth decline consistent with the H1 net loss, not a near-doubling of share count). Note: stockanalysis.com and marketscreener.com both display an implied market cap of ≈HKD 58.8B, which backs out to ~900M shares — this conflicts with verified share counts and is not used in this report; we instead compute market cap directly from confirmed share counts and prices. A-share (688234.SH) price of ≈CNY 64.54 used only for an approximate combined-cap sanity check (≈HKD 36B total) carries an unconfirmed exact date and is not load-bearing for the valuation below. 52-week H-share range: HKD 43.22–138.70 (stockanalysis.com).
Business
SICC (Tianyue Advanced, 天岳先进) makes silicon carbide (SiC) substrates used in power semiconductors for EVs, renewable-energy inverters, and increasingly AI/data-center power delivery. The stock is dual-listed: A-shares on the Shanghai STAR board (688234.SH, since 2022) and H-shares on HKEX (2631.HK, since Aug 2025 IPO). FY2025 was weak — revenue fell 17.1% YoY to CNY 1.465B and the company swung to a CNY −208M net loss as a domestic SiC price war compressed gross margin to 13.05%. H1 2026 shows the first signs of stabilization: revenue re-accelerated to +15.1% YoY (CNY 914M), gross margin partially recovered, and while the six-month period was still a CNY −58.6M net loss (driven by a CNY −60.5M Q1), the company returned to profitability in Q2 alone. Sell-side views on the demand outlook are split: JPMorgan (28 May 2026) was skeptical AI is a real SiC catalyst and argued EV demand still dominates; Goldman Sachs (26 Jun 2026) took the bull case, projecting global SiC wafer capacity growing from 2.95M wafers (2026) to 31.59M wafers (2030) on combined AI/EV/solar demand.
Valuation
Method: asset-anchored (P/B) with scenario optionality. Per house policy for loss-making, story-pivot names, we do not run an FCF-DCF — trailing profitability is negative and forward free cash flow is not reliably projectable given the price-war/recovery dynamics still in play. Book value is the more defensible anchor.
H1 2026 book value: total equity CNY 7,109.1M ÷ 484.9M total shares = BVPS CNY 14.66 (30 Jun 2026) → HKD 17.13 at FX≈1.1685. Balance sheet also shows cash CNY 3.14B against total borrowings of CNY 1.49B — a net cash position, which supports the going-concern picture despite the P&L losses.
| Scenario | Prob. | P/B multiple | Fair value (HKD) | Rationale |
|---|---|---|---|---|
| Bear | 20% | 2.0x | 30.8 | SiC price war resumes, Q3–Q4 losses return, no re-rating (multiple near Luxiao Tech's 2.88x comp, at a discount for continued unprofitability) |
| Base | 45% | 3.6x | 61.7 | Gradual stabilization toward breakeven by FY2026-end; multiple roughly in line with today's market-implied 3.82x |
| Bull | 35% | 5.0x | 85.7 | AI-driven SiC demand cycle (Goldman case) inflects, sustained quarterly profitability returns, multiple re-rates toward mid-2026 highs |
| Probability-weighted fair value | 100% | — | ≈64.6 |
Reverse read: at HKD 65.40, the market is pricing a P/B of ≈3.82x — sitting between our base (3.6x) and bull (5.0x) cases, i.e. the market already assumes some stabilization plus modest optionality. Point72's cost basis of HKD 71.83 implies a P/B of ≈4.19x, slightly richer than today's spot multiple — they bought into a bit more optimism than the market currently reflects, before the stock drifted lower. Our bear/bull multiple band (2.0x–5.0x) sits comfortably inside SICC's own 52-week trading range (implied P/B 2.52x–8.10x on current book value), so it is not an aggressive assumption in either direction.
| Peer | Ticker | P/B | Notes |
|---|---|---|---|
| Luxiao Technology | 002617.SZ | 2.88x | Imperfect comp — diversified SiC-substrate + enameled-wire business; figure dated ~14 May 2026 |
| Sanan Optoelectronics | 600703.SH | n/a | Largest domestic SiC epi-wafer maker by volume but a diversified LED/compound-semi conglomerate; issued an H1 2026 profit warning (CNY 90–135M net loss, swing to loss YoY) — directional confirmation that sector-wide margin pressure is not SICC-specific |
| Wolfspeed | WOLF (NYSE) | n/a | Global pure-play power-SiC peer; TTM revenue $665M, −12.2% YoY, mkt cap $1.46B — data quality limited, P/B not reliably sourced this pass |
Peer data for this niche (domestic SiC substrate makers) is genuinely thin — most true peers are unlisted (e.g. TianKeHeda/北京天科合达, still under STAR-board IPO review) or are diversified conglomerates where SiC is a minority segment. We treat SICC's own 52-week multiple range as the primary sanity check on the scenario band above, with peers used only for directional confirmation of sector-wide margin pressure.
Conclusion
The insider signal is genuine: Point72 Hong Kong Limited, an existing substantial shareholder, added to its position via an on-exchange purchase during a period of sharp price weakness, taking its stake from 5.86% to 6.39%. That clears our screen as real, disclosed institutional conviction — not a placing, pledge, or custodian artifact.
Since our prior review (13 Aug 2026, price HKD 82.75, rated Hold with "unfavourable risk/reward"), the stock has fallen ~21% to HKD 65.40, while H1 2026 results showed the business re-accelerating revenue growth (+15.1% YoY) and returning to quarterly profitability in Q2, even though the six-month period overall remained loss-making due to a weak Q1. The setup has genuinely improved — price now sits almost exactly at our probability-weighted fair value of ≈HKD 64.6, versus being 15–45% above the equivalent range in August. This is a much better risk/reward than three months ago, but it is not yet a margin-of-safety entry: upside to fair value is negligible at spot.
Rating: HOLD. The signal supports keeping this name on watch rather than acting immediately — revisit on further weakness toward the bear-case support (~HKD 31–35) for a better entry, or on confirmation of sustained (not just one-quarter) profitability, which would support re-rating toward the bull case (~HKD 86).
Key Risks
- Fragile turnaround: Q2 2026 profitability was one quarter after a loss-making Q1 and a loss-making FY2025 — not yet a confirmed trend.
- Thin float, high volatility: only ~54.9M H-shares in issue; the stock fell ~25% in the single week following the H1 2026 results release, illustrating how violently the float can move.
- A/H divergence and overhang: A-shares (430M shares, ~8.8x the H-float) trade at a persistent premium; any lock-up expiry or A-share supply event could pressure the H-line via arbitrage/sentiment.
- Sector demand uncertainty: sell-side is split — Goldman's AI-driven bull case vs. JPMorgan's EV-dependent skepticism — and a domestic SiC price war drove the FY2025 margin collapse; a repeat would hit the bear scenario.
- Geopolitical/export-control risk on premium SiC substrate segments remains a tail risk for a China-based supplier.
- Data provenance: H1 2026 balance-sheet detail was sourced from a secondary aggregator (Sina Finance) rather than the primary HKEXnews/CNINFO interim filing PDF (file-size limits prevented direct retrieval this pass) — the figures pass an internal BVPS-consistency check but were not confirmed against the primary document. The ≈HKD 36B combined A+H market-cap figure rests on an A-share price of unconfirmed exact date and is not used in the valuation itself.
Sources
- HKEX Disclosure of Interests filing CS20260925E00068 (Point72 Hong Kong Limited, 2631.HK), via HKEX DI search
- Futunn News, "Tianyue Advanced (02631.HK) saw its H-share holdings increased," citing the above filing
- stockanalysis.com/quote/hkg/2631/ — price, 52-week range, as of 28 Sep 2026 11:43 HKT
- marketscreener.com — price cross-check, delayed quote, 27 Sep 2026
- 10jqka (同花顺) equity structure page, basic.10jqka.com.cn/688234/equity.html — H/A share counts
- Stockstar (证券之星) — FY2025 annual report and Q1 2026 quarterly analysis (BVPS, revenue, net loss)
- Sina Finance (新浪财经) balance-sheet database, 688234 — H1 2026 balance sheet detail
- Bamboo Works, "SICC returns to growth and profits. But China's SiC industry faces a tougher test" — H1 2026 P&L narrative
- Sina Finance / Eastmoney — JPMorgan (28 May 2026) and Goldman Sachs (26 Jun 2026) sector notes
No redactions applied.
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