ILUVATAR COREX has emerged as a focal point in the GPU market following a recent report by Haitong International, which initiated coverage with an Outperform rating and set a target price at HKD596.7. This target suggests a potential price-to-sales multiple of 24x for the upcoming fiscal year, significantly higher than its current valuation.
The company’s trajectory looks promising, having reportedly doubled its revenue year-on-year to RMB1.034 billion. Projections indicate remarkable revenue growth of 126% and 133% over the next two years, largely due to increased production of its Zhikai (ZK) model and higher average selling prices of its TG Gen 3 products. This growth is further underscored by a narrowing operating loss margin, expected to improve from negative 95% last year to negative 28% this year, paving the way for profitability by next year with an anticipated net profit of RMB847 million.
Market Context and Opportunities
Haitong's assessment positions ILUVATAR COREX as a unique asset in the Hong Kong market, particularly as it joins the Southbound Stock Connect on June 8. This inclusion is expected to act as a catalyst for a short-term re-rating of the stock, allowing investors to tap into the growing AI computing sector in China without the premium associated with A-share counterparts.
the space reveals that ILUVATAR COREX is priced at a forecast next-year price-to-sales multiple of 20x, in stark contrast to the approximately 56x multiple of A-share competitors such as Cambricon and Moore Threads. This disparity highlights the potential for valuation adjustments as the company capitalizes on its core competencies within the DeepSpark ecosystem.
Future Implications
As ILUVATAR COREX solidifies its position within the dual-track GPU market, its growth trajectory could have significant implications for investors seeking exposure to China's AI infrastructure. The expected financial turnaround and strong demand for its products suggest a favorable outlook, particularly as the company continues to implement its technology in a rapidly advancing sector.
ILUVATAR COREX stands at a critical juncture, backed by Haitong International's rating and poised to benefit from its expansion into broader markets. As the landscape evolves, investors will closely monitor the company’s performance against its ambitious growth forecasts.
