Lyon: First time covering TIANYU SEMI (02658) with an "outperform" rating, target price of HK$70.

Lyon released a research report, stating that TIANYU SEMI (02658) will benefit from the increased adoption of silicon carbide (SiC) epitaxial wafers in high-power and high-voltage applications. It is predicted that the global SiC epitaxial power semiconductor market will have a compound annual growth rate of 40.5% from 2025 to 2029, with a total potential market size (TAM) estimated to reach 16 billion US dollars. Lyon predicts that the group's revenue will grow to 3.31 billion RMB in 2027. Based on a 7.5 times market-sales ratio, the target price is 70 Hong Kong dollars; the first coverage is given a "outperform" rating. The bank pointed out that SiC epitaxial wafers are one of the most value-added segments in the upstream sector; TIANYU SEMI is the largest supplier of SiC epitaxial wafers in the Chinese market in 2024, and is also one of the first domestically to have the capacity to mass-produce 8-inch SiC epitaxial wafers. Therefore, it is expected to become a major beneficiary.