Key Takeaways
Haitong International has initiated coverage on Chinese GPU developer Iluvatar Corex (09903.HK) with an “Outperform” rating, setting a price target of HKD 596.7.
In a note to clients, the brokerage highlighted the company’s position as a pioneer in China’s dual-track GPU sector and its competitive DeepSpark ecosystem, stating the current share price represents a “significant discount to its potential valuation.”
The price target implies a 24x price-to-sales multiple for the next year. Haitong noted the stock’s current valuation is a 20x P/S multiple, a discount to A-share listed peers like Cambricon and Moore Threads, which average around 56x.
The report forecasts Iluvatar Corex will turn profitable next year with a net profit of RMB 847 million. A key short-term catalyst is the company's inclusion in the Southbound Stock Connect program, effective June 8.
Haitong projects Iluvatar Corex’s revenue, which doubled to RMB 1.034 billion last year, will increase by 126 percent and 133 percent over the next two years. The growth is expected to be driven by higher average selling prices for its TG Gen 3 products and increased production of its Zhikai (ZK) line.
The positive rating and upcoming inclusion in the Stock Connect could increase liquidity and attract significant new investment from mainland China. As a scarce Hong-Kong-listed domestic GPU play, Iluvatar Corex offers investors direct exposure to China's AI computing market without the high valuation premium of A-share counterparts.
This article is for informational purposes only and does not constitute investment advice.
