Goldman Sachs initiates coverage on Enos and assigns Buy, target price HK$114

Overview

This report is Goldman Sachs’ first coverage on Enos (2577.HK). Goldman Sachs views the company as a leading GaN supplier, operating in an IDM model and already mass-producing 15V to 1,200V solutions, allowing coverage of data-center power conversion nodes from 800V to 54V, 54V to 12V, and 12V to 0.8V. The central thesis is that the shift of AI data centers to 800VDC rack-level power architecture increases demand for higher power density and higher efficiency, which should raise GaN device penetration and drive improvements in Enos’ revenue and margins.

Core views

Goldman Sachs forecasts Enos GaN revenue to grow at a 73% CAGR in 2025-2028E. Key drivers include continued capacity expansion at the Suzhou base, application expansion from fast charging and consumer electronics into automotive, industrial, data center, and humanoid robots, and higher GaN value per rack from the 800VDC rack-level power architecture. The report expects company revenue to rise from RMB1.213bn in 2025E to RMB6.233bn in 2028E, and EBITDA to move from a loss of RMB362mn in 2025E to a profit of RMB2.149bn in 2028E. Goldman Sachs assigns a Buy rating, arguing that valuation is attractive at current levels.

Analysis framework

The report analyzes five areas: industry demand, company product mix, capacity expansion, financial projections, and valuation. At the industry level, it estimates AI server rack shipments, ASIC share, GaN penetration, and VDC power architecture market opportunity. At the company level, it analyzes the IDM model, 15V–1,200V coverage, global customer footprint, and capacity expansion. At the financial level, it forecasts revenue, gross margin, EBITDA, ROE, FCF, and cash conversion cycle. At valuation, it uses a 2030E discounted EV/EBITDA framework and cross-checks using implied 2027E P/S.

Methodology notes

• Valuation methods2030E discounted EV/EBITDA

  Multiply 2030E EBITDA by a target EV/EBITDA multiple and discount to 2027E to derive equity value.

  Goldman Sachs applies a target EV/EBITDA multiple of 29.5x, based on peer forward EV/EBITDA and the relationship among EBITDA growth and EBITDA margin, and discounts at a 9.5% cost of equity.

• cross_check2027E P/S cross-check

  Validate valuation reasonableness using the implied forward P/S ratio from the target price.

  A target price of HK$114 implies a forward 2027E P/S of about 22x, consistent with the company’s average P/S of about 22x since April 2025.

• corporate_eventM&A framework

  Use an M&A rank from 1 to 3 to assess the probability of becoming an acquisition target.

  Enos has an M&A rank of 3, indicating a lower probability of being acquired; as the company listed in December 2024 and founder/management ownership remains concentrated, the target price does not include an M&A component.

• factor_profileGS Factor Profile

  Compare a stock’s relative position against market and sector peers from growth, financial returns, valuation multiples, and a composite factor perspective.

  This framework uses Goldman Sachs forecast data to standardize and rank metrics such as revenue growth, EBITDA growth, EPS growth, ROE, ROCE, CROCI, P/E, P/B, and EV/EBITDA.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 英诺赛科(2577.HK)

  Core coverage name

  Strengths

  A leading GaN supplier operating in an IDM model, with product coverage from 15V to 1,200V, wafer-discrete-device-module breadth, and service to leading global customers.

  Weaknesses

  The company is still in a profitability ramp-up phase, with 2025E and 2026E EPS still negative; operating leverage still depends on revenue scale-up and better capacity utilization.

  Comparison

  Goldman’s 2027E/2028E profit forecast is 8%/11% above Bloomberg consensus, mainly due to stronger operating leverage from higher revenue and scale effects.

  Risks

  GaN penetration below expectations, stronger-than-expected price competition, and slower-than-expected capacity ramp-up at new fabs.

• AI data center power architecture

  Key demand driver

  Strengths

  The 800VDC rack-level architecture increases power-density and efficiency requirements, which is favorable for high-frequency, low-loss GaN devices.

  Weaknesses

  Market size depends on AI server rack shipments, ASIC adoption rates, and the pace of GaN penetration improvement.

  Comparison

  Compared with traditional silicon devices, GaN offers advantages in high-frequency operation, high efficiency, and reduced power loss.

  Risks

  If architecture migration or customer adoption runs slower than expected, revenue contribution could be delayed.

• GaN power devices

  Core product and sector theme

  Strengths

  Applicable to fast charging, in-vehicle chargers, LiDAR, industrial, data centers, and humanoid robots, with continuously expanding end-use boundaries.

  Weaknesses

  Industry expansion may attract more entrants, creating ASP and margin pressure.

  Comparison

  The report compares GaN with Si, GaAs, and SiC and emphasizes GaN’s advantage in high-frequency and high-efficiency scenarios.

  Risks

  Customer qualification timelines, cost declines, yield on new capacity, and competitive dynamics all affect commercialization speed.

Key data

• 12-month target priceHK$114.00First coverage with Buy rating.
• Current priceHK$54.95Price displayed in the report.
• 2025-2028E GaN revenue CAGR73%Driven by higher GaN wafer and discrete-device volume, broader applications, and contribution from 800VDC architecture.
• Total revenue forecastRmb1.213bn / Rmb2.224bn / Rmb4.026bn / Rmb6.233bnCorresponding to 2025E, 2026E, 2027E, 2028E.
• EBITDA forecastRmb-362mn / Rmb62mn / Rmb919mn / Rmb2.149bnCorresponding to 2025E, 2026E, 2027E, 2028E.
• Gross margin forecast7.3% / 19.9% / 31.1% / 37.6%Corresponding to 2025E, 2026E, 2027E, 2028E.
• GaN capacityabout 20k wpm to more than 68k wpmExpected to rise from about 20k wpm at the end of 2025 to over 68k wpm by end of 2029.
• VDC architecture GaN market sizeUS$118mn / US$634mn / US$1.9bnCorresponding to 2026E, 2027E, 2028E.
• GaN penetration assumptions2% / 7% / 17%Corresponding to 2026E, 2027E, 2028E.
• AI server rack shipment forecast55k / 105k / 163kCorresponding to 2026E, 2027E, 2028E.

Impact & implications

If Goldman’s assumptions prove true, Enos is expected to shift from GaN use led by consumer electronic fast charging toward higher-value applications such as data centers, automotive, industrial, and robotics. The 800VDC architecture is likely to increase demand for high-frequency, high-efficiency, high-power-density devices, making GaN more strategically important in AI infrastructure power systems. Scale expansion and product mix upgrading may also shift the company from losses to profits and improve ROE, FCF, and cash conversion cycle.

Risks

• GaN adoption could be slower than expected, potentially leading to downward revisions in revenue and profit forecasts.
• GaN product price competition could be stronger than expected, pressuring blended ASPs and margins.
• If new GaN capacity ramp-up takes longer or is delayed, revenue expansion may be constrained.
• If 800VDC data center architecture adoption pace is slower than expected, it could weaken contribution from high-value applications.
• The company is still in a profitability improvement phase; if scale effects are weaker, operating leverage release may fall short.

What to watch

• The customer rollout and mass-production pace of 800VDC AI data center power architecture.
• Changes in GaN penetration within data center VDC power, server power supplies, and chip-level power delivery.
• Construction progress, yield, and utilization ramp-up of newly added capacity at the Suzhou base.
• Whether the mix shift to high-end applications drives gross margin toward 20% in 2026E and around 40% over the long term.
• The degree of execution toward growing revenue from Rmb1.213bn in 2025E to Rmb6.233bn in 2028E.
• Whether cash conversion cycle, days inventory on hand, and days sales outstanding improve as forecast.
• Progress in orders and customer expansion in new applications such as automotive, industrial, and humanoid robots.