Key Takeaways
Shares of Times Electric Co. (03898.HK) surged more than 13 percent after Daiwa initiated coverage on the power semiconductor manufacturer with a "Buy" rating and a HKD45 price target.
"We are optimistic about the company's leading position in the domestic market, improving business fundamentals and attractive valuation," Daiwa said in its research report, citing an upcycle in power semiconductors driven by artificial intelligence data centers (AIDC).
The stock jumped 13.22 percent to close at HKD42.98 in Hong Kong, after hitting an intraday high of HKD43. Turnover reached HKD398 million on the back of the new rating, significantly higher than its recent average. The move provided a bright spot in the broader market, where the Hang Seng Tech Index saw modest gains.
The bullish call from a major brokerage validates the company's strategic positioning. Daiwa noted that Times Electric is entering "multiple upcycles," with its emerging equipment business showing promising prospects while its legacy railway equipment segment provides stable growth. The HKD45 price target implies further upside of approximately 4.7 percent from its closing price on May 13.
Daiwa's positive outlook is rooted in the company's leverage to the booming power semiconductor market. These components are crucial for managing power in high-performance computing environments, including the AIDC infrastructure that underpins the artificial intelligence boom.
The broker's report highlighted the dual engines of growth for Times Electric. The company is benefiting from strong demand in its emerging businesses, directly linked to new energy vehicles and industrial applications, alongside its established and stable revenue from its core railway equipment business. This diversified model offers both high-growth potential and defensive stability, a combination the report found attractive. The initiation comes at a time when the USD/CNH exchange rate remains a key focus for global investors assessing Chinese equities.
This article is for informational purposes only and does not constitute investment advice.
