Guangdong Tianyu Semiconductor

Income statement — five-year headline

The FY2021 growth cell is a placeholder of zero because FY2020 revenue has not been published. Revenue CAGR was 46.4% over FY2021–FY2025 and 17.5% over FY2022–FY2025.

Income statement — detailed

EBITDA is operating profit plus depreciation and amortisation as reported in the cash flow statement.

FY2025 income statement detail (RMB thousand, from the FY2025 annual results)

Interim comparison (RMB thousand, from the 2026 interim results)

Commentary. Tianyu's income statement has gone through three phases. From FY2021 to FY2023 it scaled quickly: revenue rose 7.6-fold, wafer shipments climbed from 17,001 to about 131,000, and the company moved from a RMB180 million loss to a RMB95.9 million profit. In 2023, however, that profit rested on one Korean customer that took 42% of revenue. The FY2024 collapse had three causes: that customer's orders evaporated, Chinese 6-inch epi capacity expanded quickly, and prices of both epi wafers and substrates fell sharply. Revenue fell 55.6%, and a RMB315.1 million inventory write-down pushed gross margin to -72%. FY2025 was a partial repair. Revenue grew 36.5% on 8-inch volume and a five-fold rise in foundry services. The write-down provision fell to RMB13.1 million. Cheaper domestic substrates also lowered unit costs, and gross margin returned to 18.8%. The net loss narrowed by 88%, to RMB62.2 million, even as finance costs rose to RMB48.7 million after capitalised interest of RMB20.7 million.

The first half of 2026 reversed much of that progress. Revenue edged up 4.3%, but cost of sales jumped 49.1% for four reasons: 8-inch wafers carry higher unit costs, Q1 seasonality left fixed costs under-absorbed, new inventory write-down provisions were booked, and releases of earlier write-downs fell. The result was a small gross loss. Administrative expenses rose from RMB17.5 million to RMB77.8 million, a trade-receivable impairment of RMB35.4 million was recorded, and a net FX loss of RMB19.1 million turned operating profit into a RMB114.7 million loss. The data show that pricing, not volume, now drives profitability.

Shipments and capacity

The first prospectus reported 132,072 wafers for 2023; the final prospectus gives 130,702. Capacity utilisation was below 58.9% during the 2024 downturn. On full ramp-up of the Ecological Park base, total annual capacity is planned to reach 800,000 epi wafers.

Balance sheet

Zeros in this table mark items not published for that date (lease liabilities and payables at FY2024; PP&E and intangibles at H1-2026). They are not reported values. The company carries no goodwill.

Commentary. The listing transformed the balance sheet. Net current liabilities of RMB523 million at end-2024 became net current assets of RMB1,065 million, and gearing (borrowings to equity) fell from 138.9% to 83.6%. Equity rose to RMB2.71 billion after RMB1.54 billion of net proceeds were credited to share capital and reserves. The quality of the year-end position is weaker than the totals suggest. Trade receivables of RMB742.6 million equal about 105% of FY2025 revenue, reflecting heavy fourth-quarter shipments and rescheduled deliveries. By the date of the annual results the company had collected more than RMB470 million of them. By mid-2026 cash had fallen to RMB570 million after RMB360 million of capex and debt repayment. Inventories had tripled to RMB211.8 million, and gearing stood at 75.0%. Undrawn committed bank facilities of RMB4.82 billion and effective borrowing rates of 2.39%–3.80% give ample refinancing headroom. Pledged assets fell from RMB1,006.4 million at end-2025 to RMB674.1 million.

Cash flow

Commentary. Tianyu has burned between RMB700 million and RMB985 million of free cash flow every year since 2022, a cumulative RMB3.5 billion. Equity (RMB2.9 billion across the Series B and the IPO) and RMB2.3 billion of net new debt have funded it. FY2025 operating cash flow was negative because of a RMB612 million rise in receivables. That reversed in the first half of 2026, when operating cash flow was a positive RMB235 million, up 342% year on year, helped by collections and RMB92.9 million of customer prepayments recorded as contract liabilities. Capex stepped down from a peak of RMB1.02 billion in FY2023 to RMB599 million in FY2025, then rose to RMB360 million in the first half of 2026 as the Ecological Park base was fitted out. Remaining capital commitments were RMB1,193 million at 30 June 2026. Buybacks began only in September 2026.

Ratios

ROE and ROA use total net profit and average balances. Interest coverage on an EBIT basis was negative in both FY2024 and FY2025. The FY2025 year-end cash conversion cycle is inflated by fourth-quarter billing. On the 30 June 2026 balance sheet, annualising first-half revenue, receivable days fall to about 242.

Management guidance

Management offers qualitative guidance only. It expects SiC power-device demand to keep growing, driven by AI data centres, EVs and charging, and it expects the 6-inch-to-8-inch transition to speed up. It plans to keep ramping 8-inch capacity at the Ecological Park and to grow overseas, foundry and inspection revenue. No numerical revenue, margin or capex guidance has been issued. No formal consensus forecasts are published.

Bull case

1. 8-inch inflection. 8-inch revenue went from RMB21 million in FY2024 to RMB147 million in H1-2026 alone. If utilisation rises at the Ecological Park, the 38.8% self-made wafer margin of H1-2025 shows achievable profitability.

2. International re-rating. Korean revenue of RMB60.6 million in H1-2026, together with Samsung's SiC restart and the EYEQ Lab channel, could rebuild the overseas mix that made up 44% of revenue in FY2023, this time with 8-inch and AI-power demand behind it.

3. Pricing-cycle turn. Industry-wide SiC price increases in 2026 and high substrate utilisation, combined with Tianyu's localised cost base, could restore gross margins faster than the market expects. The H1-2026 operating cash inflow of RMB235 million and RMB92.9 million of customer prepayments point to firmer demand.

Bear case

1. Structural price pressure. H1-2026 gross margin of -0.3%, after 18.8% in FY2025, shows the company remains a price taker in an oversupplied Chinese epi market, with 6-inch ASPs still falling.

2. Losing ground to Hantian Tiancheng. The peer grew 92% at a 27.8% gross margin in H1-2026 and holds about 31.6% of global volume, against Tianyu's 7.8%. That suggests share and customer migration toward a stronger 8-inch competitor.

3. Capital intensity and dilution risk. Four consecutive years of free cash outflow (RMB985 million in FY2025), RMB1.19 billion of commitments, falling cash (RMB570 million at mid-2026) and a full-circulation overhang on a 14.94% float could pressure the shares even if operations improve.

Key catalysts (next 12 months)

Q4 2026 – Q1 2027: Catalyst: Volume and pricing trends in H2-2026, including whether the Q2-2026 order recovery holds

Q1 2027: Catalyst: FY2026 profit alert and annual results; scale of inventory and receivable provisions

2027: Catalyst: CSRC decision on H-share full circulation and any conversion of unlisted shares

2027: Catalyst: Ecological Park ramp-up toward the 800,000-wafer target

2027: Catalyst: New Korean, Japanese and European customer qualifications; progress of the Samsung SiC pilot line

Ongoing: Catalyst: Pace of H-share repurchases against the 5.9 million-share mandate

Ongoing: Catalyst: Commercial milestones from the Qinghe bonded-substrate programme

Monitorables

Gross margin of self-manufactured wafers by half-year; 8-inch share of revenue; overseas share of revenue; top-five customer concentration; receivable days and impairment charges; inventory levels; capex against commitments; net debt and undrawn facilities; Hantian Tiancheng's growth and margins; industry ASPs for 6- and 8-inch epi.

Analyst verdict

Guangdong Tianyu Semiconductor is a strategically relevant but financially fragile asset. Its claim to relevance is real. It is China's pioneer and largest domestic supplier of SiC epitaxial wafers, has built one of the country's biggest 6- and 8-inch epi capacity bases, has localised most of its equipment and substrate supply, and counts Huawei's Hubble and BYD among its backers. In SiC power semiconductors, epitaxy is a gating step, and demand drivers are widening from 800 V EVs to AI data-centre HVDC power.

The financial record is less reassuring. Revenue has swung from RMB1.17 billion to RMB520 million and back to RMB709 million. Gross margin has moved between +18.5%, -72%, +18.8% and -0.3% within three years, and free cash flow has been deeply negative every year. The swings come from the company's structural position: a merchant supplier squeezed between consolidating substrate makers and device makers that can grow their own epi, serving a handful of large customers in a market whose capacity has run ahead of demand. The first half of 2026 confirmed that position. Volume and Korean revenue recovered, but pricing pushed margins back to zero while the main domestic peer grew 92% at a 28% gross margin.

The IPO has removed near-term solvency risk, buybacks provide some technical support, and the 8-inch ramp and Korean channel give real optionality. A sustained re-rating, however, needs evidence that the company can hold self-manufactured wafer margins above 20% through a full cycle while filling the Ecological Park. That has not yet been shown. At about 22x trailing EV/sales and 5.7x book, the valuation already prices in a good deal of that recovery. The balance of evidence supports a cautious, catalyst-driven stance: positive on the industry's direction, neutral to cautious on Tianyu's ability to capture it profitably until two consecutive halves of positive, rising gross margins confirm the turn.