I Found a Small Semi Equipment Stock Trading ~45% Below It's NAV

I’ve been working on this post for a couple weeks now and in the time it’s taken me to write it the stock is up something like 40%. A bit annoying...

But I still think it’s worth writing up because nothing about the actual opportunity/thesis has changed. The stock is just less cheap than when I started.

The company is a semiconductor equipment maker. Sells the tools Chinese fabs need to build chips domestically. Cleaning, plating, furnaces, deposition, packaging. I actually first came across it through Jukan on X, he honestly knows this name and the broader semi space way better than I do. If you’re not following him you absolutely should be.

What makes it interesting beyond just being a semi equipment company is that the product portfolio has been rapidly expanding... it started as a single-product cleaning tools business and is now shipping tools across six or seven different categories, with the newer ones growing at triple-digit rates.

And even after the recent run, it trades at a roughly ~45% discount to the public market value of its own subsidiary. The parent company’s entire market cap is less than half of what its stake in the subsidiary is worth… oh and there’s about $1 billion in net cash sitting on the balance sheet.

I believe domestic chip production in China is going to accelerate significantly over the next several years, driven by AI demand and hardened by export controls. If that view is even roughly correct, the companies selling tools into that buildout are going to do very very well. This one is already starting to do well, the market just hasn’t fully caught up to it yet IMO.

There’s also a concrete path to unlocking the holding company discount via a Hong Kong listing, which active institutional shareholders are publicly pushing for and offering to back with capital.

I really do think this is one of the more interesting risk/reward setups I’ve come across in a while.

Quick note before we get into the name/work — I’m running a ~30% OFF discount on the annual plan alongside this post: $154/year instead of $220/year through end of day Saturday, May 30th.

A paid plan gets you this writeup, the full archive of research on names like BABA, VNET, Kaspi, Coupang, and more, plus everything I publish going forward.