[HK IPO] Basic Semiconductor, a domestic silicon carbide power device manufacturer, with a valuation of nearly 10 billion yuan. Is it worth subscribing to?
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The previous post shared about Easy Control Intelligent Driving. Today, let's look at an 18C semiconductor company — Basic Semiconductor. The company mainly produces silicon carbide power modules, discrete devices, and power semiconductor gate drivers. Its products are used in new energy vehicles, photovoltaics, energy storage, and industrial equipment. The focus is on the industry's potential, continuous gross losses, and a valuation approaching HKD 10 billion.
I. Overview of the New Share Issuance
Company Name: Shenzhen Basic Semiconductor Co., Ltd. (09971.HK)
Global Offering: 27,386,200 H Shares
Hong Kong Public Offering: 1,369,400 Shares
International Offering: 26,016,800 Shares
Issue Price: HKD 27.49 — HKD 31.62
Board Lot: 200 Shares
Minimum Subscription Fee: HKD 6,387.78
Cornerstone Investors: None
Greenshoe: Yes
Sponsors: Guojin Securities, BOC International
Reallocation Mechanism: 18C
Subscription Period: June 29 — July 3
Allotment Announcement: July 6
Grey Market Trading Time: July 7, 16:15-18:30
Listing Date: July 8
Market Capitalization: Approximately HKD 8.365 billion — HKD 9.622 billion
Group A (Tail): 700 Lots
Group B (Head): 800 Lots
Top Hammer: 3,423 Lots
II. Analysis of the Company's Fundamentals
Basic Semiconductor was founded in 2016 and adopts an IDM model, covering chip design, wafer manufacturing, module packaging, gate driver design, and testing. The company's products are divided into three categories: silicon carbide power modules, silicon carbide discrete devices, and power semiconductor gate drivers.
Based on 2024 revenue, the company ranked sixth in China's silicon carbide power module market with a 2.9% market share. It ranked ninth in both the silicon carbide discrete device and power semiconductor gate driver markets, with market shares of 2.7% and 1.7%, respectively. While the industry is growing rapidly, market concentration is high, with international players holding the major share. The company is not yet a leading player.
From 2023 to 2025, the company's revenues were RMB 221 million, RMB 299 million, and RMB 311 million, respectively. Revenue grew 35.6% in 2024 but slowed significantly to only 4.1% in 2025.
The company's biggest issue is that its products are still in gross loss. Gross losses for the same periods were RMB 132 million, RMB 28.98 million, and RMB 33.86 million, with the gross loss rate narrowing from 59.6% to 9.7% but expanding again to 10.9% in 2025. Net losses were RMB 342 million, RMB 237 million, and RMB 335 million, while adjusted net losses were RMB 313 million, RMB 203 million, and RMB 240 million, respectively.
By product, in 2025, silicon carbide power module revenue was RMB 122 million with a gross loss rate of 23.9%; silicon carbide discrete device revenue was RMB 58.39 million with a gross loss rate of 65.4%. Only the power semiconductor gate driver business remained profitable, with revenue of RMB 103 million and a gross margin of 33.9%.
A more interesting aspect is the industrial-grade silicon carbide power module. Its revenue increased to RMB 33.29 million in 2025 with a gross margin of 36%. As of the latest practicable date, the company had secured orders for over 120,000 industrial-grade modules and added 4 new energy vehicle design-wins. The prospectus also mentioned that the gross margin for the first four months of 2026 improved compared to the same period in 2025.
Risks are also significant. In 2025, the company had net current liabilities of approximately RMB 279 million, operating cash outflow of RMB 112 million, and trade receivables turnover days increased to 198.6 days. The industry is still experiencing price cuts, with both the average selling price and sales volume of automotive-grade power modules declining. The company expects to remain loss-making in 2026.
III. IPO Subscription Analysis and My Action
For this batch of 15 new shares, the specific capital allocation is posted on the Planet. The advantages of Basic Semiconductor are the hot sector theme (silicon carbide belongs to the third-generation semiconductor) with applications covering new energy vehicles, energy storage, and industrial power supplies. The company has IDM capabilities, industrial-grade modules are starting to scale, and the gross loss rate has significantly improved compared to 2023. The company has a greenshoe, with Guojin Securities and BOC International as joint sponsors.
The disadvantages are the lack of cornerstone investors. To date, the company is not only unprofitable but hasn't even achieved positive gross profit overall. Calculated at the upper price limit, the market cap is about HKD 9.622 billion, while 2025 revenue was only RMB 311 million, indicating the valuation already incorporates high industry growth expectations. The estimated one-lot winning rate is 3%, with Group A fully allocated by ballot and Group B winning one lot.
Overall, Basic Semiconductor has the semiconductor theme and small public float support, but its financial quality is weaker than most other new shares in the same period. Scaling up industrial-grade products is the direction for improvement, but in the short term, it still faces price competition, gross losses, and cash flow pressure, making it unsuitable for high-leverage participation.
My action: I subscribe.
$BASICSEMI(09971.HK)
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