Goldman Sachs: Maintaining Innosecco's (02577) “buy” rating, target price of HK$114, optimistic that GaN will benefit data centers and automotive applications

The Zhitong Finance App learned that Goldman Sachs released a research report stating that the 12-month target price is HK$114, based on the 2030 forecast discounted EV/EBITDA valuation, based on the 2030 forecast discounted EV/EBITDA valuation. Compared with InnoSec's year-on-year EBITDA growth rate and EBITDA profit margin over the next year, the target price for 12 months is HK$114, based on the closing price of HK$43.20 on September 8.

The bank communicated with Innosecco management in Suzhou on September 7 during an AI tour in China, focusing on data center GaN adoption and product expansion, GaN wafer/device/module business model, and potential competition. The bank maintains a positive view of Innosecco's comprehensive GaN product portfolio covering 15V to 1200V and multiple terminal applications.

Management pointed out that the company has accelerated the expansion of GaN production capacity and aims to increase GaN production capacity to 70,000 wafers per month in the next few years to grasp the growing demand for GaN in automotive and data center applications, as well as GaN demand in the medium to long-term robotics sector. Management said that GaN adoption in data centers is still in its early stages, and the company is still exploring business models, including cooperating with power device vendors or directly establishing partnerships with cloud service provider (CSP) customers.

Management said that GaN products are mainly used in the three stages of the 800 VDC rack power architecture, including 800V to 54V, 54V to 12V, and 12V/6V to 1V. The last level of low-voltage products has higher value. For the last level, the company has developed a 15V DrGaN product for AI GPUs to supply power from 6V to 1V, and has completed customer samples, which can achieve higher switching frequency, higher conversion efficiency, and reduce the number of BOM components.

The bank is optimistic about InnoSec as an early entrant, and with its accumulated technical experience, it will seize growth opportunities as Nvidia's new architecture begins to climb in volume.