SDIC Securities International: ESWIN Computing's (01256) IPO valuation has already reflected the growth option of RISC-V computing chips; advise cautious financing

SDIC Securities International released a research report stating that ESWIN Computing's (01256) offer price is HK$1.48-1.59, corresponding to a total market capitalization of HK$32.5-35 billion, and a 2025 P/S ratio of 11.4x-12.3x. This compares with traditional DDIC manufacturers such as Novatek and Himax, whose P/S ratios are 1.3x-3.3x, and domestic A-share RISC-V chip companies Espressif at 10.5x and Shenzhen Bluetrum Technology at 10.8x. The bank believes that the IPO valuation has already reflected the growth option of RISC-V computing chips, with limited upside room, and subsequent share price performance may depend more on the delivery of new business results. Considering valuation, prospects, business themes, and the absence of a greenshoe option, it advises investors to reference subscription heat, exercise caution in financing, and consider subscribing with cash as appropriate. SDIC Securities International's main points are as follows: Company Overview ESWIN Computing is a Fabless chip and integrated software-hardware solution provider centered on its self-developed RISC-V architecture. Its main products include two categories: first, human-machine interaction and multimedia processing chip products, applied in home, office, and portable scenarios, such as displays for TVs, monitors, notebook computers, mobile phones, and watches; second, interconnect and computing chip products, mainly applied in automotive, Siasun Robot&Automation, and industrial scenarios. Customers mainly include AIoT, consumer electronics, technology companies, and distributors. According to Frost & Sullivan data, by 2025 revenue, the company's share in China's intelligent terminal human-machine interaction chip market is 5.7%, ranking 4th; its share in RISC-V main control chip products is 1.2%, ranking 5th. Financial Performance From 2023 to 2025, the company's total revenue was RMB 1.8 billion, RMB 2.0 billion, and RMB 2.4 billion, respectively, with year-on-year growth of 16% in 2024 and 20% in 2025; revenue for the first quarter of 2026 was RMB 500 million, up 18% year-on-year. From 2023 to 2025, the company's gross profit was RMB 270 million, RMB 360 million, and RMB 450 million, respectively, with year-on-year growth of 32% in 2024 and 27% in 2025, while gross margins during the same periods were 15%, 18%, and 19%, respectively; adjusted net losses were RMB 1.7 billion, RMB 1.4 billion, and RMB 1.2 billion, respectively. Industry Conditions and Prospects According to Frost & Sullivan data, the market size of China's intelligent terminal human-machine interaction chip products in 2025 was RMB 32.5 billion, up 10% year-on-year, and is expected to increase to RMB 50.9 billion by 2030, with a projected CAGR of 9% from 2025 to 2030; the market size of China's intelligent terminal multimedia processing chip products in 2025 was RMB 29 billion, up 5% year-on-year, and is expected to increase to RMB 36.4 billion by 2030, with a projected CAGR of 6% from 2025 to 2030. Strengths and Opportunities SDIC Securities International pointed out that the company has a dual-business layout, with human-machine interaction chips forming a stable revenue base, self-developed RISC-V cores supporting integrated software-hardware delivery, and expansion into intelligent computing scenarios; the company possesses a full-stack self-developed RISC-V architecture and can license IP externally; at the same time, the one-time disruption in the packaging and testing supply chain has been repaired, and inventory impairment pressure on interconnect chips has been released in stages. Use of Proceeds The company expects the median net proceeds to be HK$2.3 billion, with 9 cornerstone investors subscribing to a total of HK$1.16 billion, accounting for approximately 48%-50% of the offered shares, including Yitang Shenghai Fund, Hefei Construction Investment, Haiyao Industrial, and others. In terms of future fund use plans, 35% will be used for R&D iteration of human-machine interaction, multimedia processing chips, interconnect and computing chips, 30% for software-hardware technology platform capabilities, 15% for potential strategic acquisitions, 10% for the global commercial network, and 10% for supplementary working capital.