GIGADEVICE surges 13% to record high as CLSA lifts target to HKD1,254

GIGADEVICE Semiconductor surged 13.4% to a record HKD1,119 after CLSA raised its price target to HKD1,254, citing a structural upcycle in niche memory chips.

"The niche memory upcycle is structurally driven by supply shortages and domestic substitution demand," CLSA said in a note, maintaining its Outperform rating on the stock.

CLSA lifted its FY2026 net profit forecast by 49% to RMB12.2 billion, implying a 641% year-over-year surge. The broker also raised its 2Q FY2026 earnings estimate by 40% to RMB3.1 billion and boosted forecasts for the following two years by 42% and 25%, respectively. The new target price of HKD1,254 corresponds to a forward FY2027 price-to-earnings ratio of 50 times, above the industry average of 38 times, reflecting expectations that GIGADEVICE will gain market share through domestic substitution.

The stock traded at HKD1,063 as of midday, up 7.75%, with 1.25 million shares changing hands worth HKD1.35 billion. CLSA expects GIGADEVICE's memory business revenue contribution to jump to 88% in 2026 from 71% in 2025, as prices of NOR flash and SLC NAND — both niche memory segments — more than doubled in the first half, according to TrendForce data. The price uptrend is expected to continue into the second half.

ChangXin Technology Group's planned A-share listing is expected to further boost investor sentiment toward China's memory sector and GIGADEVICE, CLSA said. The broader China semiconductor ecosystem has been a key beneficiary of the domestic substitution push, with peer companies in the NOR flash and NAND supply chain also seeing elevated demand.

The guidance raise signals CLSA's conviction that the niche memory upcycle has further to run. Investors will watch for GIGADEVICE's next quarterly update for evidence of margin expansion as the price rally flows through to earnings.

This article is for informational purposes only and does not constitute investment advice.