Rate Of Return
Buffett Apprentice[HK IPO] Tianyue Advanced, the probability of breaking the issue is not high but the gains are expected to be modest.
The company has been deeply involved in the wide-bandgap semiconductor materials industry, with strong professional technical capabilities. Since its establishment, it has focused on the R&D and industrialization of silicon carbide substrates. According to Frost & Sullivan, based on the sales revenue of silicon carbide substrates in 2024, we are one of the top three global manufacturers of silicon carbide substrates, with a market share of 16.7%.
The company started its IPO on August 11, with an offer price of ≤HK$42.8, 100 shares per lot, a minimum subscription of HK$4,323.17, and a market cap of ≤HK$20.435 billion. The total number of shares issued is 47.7457 million, belonging to the semiconductor equipment and materials industry, with a greenshoe option.
The sponsors are CITIC Securities and CICC. The first-day rise rate of projects sponsored by CITIC Securities in the past two years is 84.61%, while that of CMB International is 55.31%. The overall performance of the sponsors is quite good.
There are five cornerstone investors: Guoneng Environmental Protection, Mirae Asset Securities, Shanjin Asset, Heertai, and Mr. Lankun, with a total subscription of HK$740.2 million, accounting for 36.22% of the total issuance. The cornerstone ratio is decent.
Based on the sales revenue of silicon carbide substrates in 2024, the company is the second-largest global manufacturer of silicon carbide substrates, with a market share of 16.7%.
The company's revenues from 2022 to 2024 were HK$417 million, HK$1.251 billion, and HK$1.768 billion, respectively, with a year-on-year growth of 41.37% in 2024; Net profits from 2022 to 2024 were -HK$176 million, -HK$45.72 million, and HK$179 million, respectively, with a year-on-year growth of 491.57% in 2024. The performance growth is very rapid.
Calculated at the upper limit of the offer price, the market cap is HK$20.435 billion, with an issuance of HK$2.044 billion, accounting for 10% of the total. The cornerstone investors locked in 36.22%, leaving a float of HK$1.304 billion, which is relatively large.
This issuance adopts Mechanism A under the new IPO rules of the Hong Kong stock market. The initial public offering share is 5%. If the subscription multiple exceeds 15 times, it will be scaled up to 15%; if it exceeds 50 times, it will be scaled up to 25%; if it exceeds 100 times, it will be scaled up to 35%. The maximum scale-up is 35%.
Several A+H companies are already listed in the same industry. The average discount of H-shares compared to A-shares is 43.97%, while the discount rate for Tianyue Advanced is only 36.35%, which seems relatively low.
The current subscription multiple is 67.84 times, with two days left in the offer period. It is estimated that the final oversubscription will exceed 100 times.
Subscription Strategy:
The company is deeply involved in the wide-bandgap semiconductor materials industry and is one of the top three global manufacturers of silicon carbide substrates. The sponsors are CITIC Securities and CICC, and their overall performance is quite good.Five cornerstone investors subscribed a total of HK$740.2 million, accounting for 36.22% of the total issuance. The cornerstone ratio is decent. The company's performance is good and growing rapidly, although there was a slight decline in Q1 2025. This issuance adopts Mechanism A under the new IPO rules of the Hong Kong stock market, with a maximum scale-up of 35%. The market cap is HK$20.435 billion, with an issuance of HK$2.044 billion. The cornerstone investors locked in 36.22%, leaving a float of HK$1.304 billion, which is relatively large. Among comparable companies in the same industry, the average discount of H-shares compared to A-shares is 43.97%, while the discount rate for Tianyue Advanced is only 36.35%, which seems relatively low. However, the final pricing and the trend of A-shares in the coming days still need to be considered. Overall, the recent IPO market in Hong Kong is good, with a low probability of breaking, but the gains may not be substantial. I plan to participate with a small subscription!
My comments represent personal views only and do not constitute any investment advice. The stock market is risky; invest with caution!
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