Goldman Sachs maintains a Neutral rating on StarPower, focusing on SiC and MCU application expansion and utilization recovery

Overview

This is a Goldman Sachs company research report on StarPower (603290.SS), based on discussions with management during the China Tech Tour in Shanghai on May 22, 2026. The report's core focus is the company's recovery path after pressure in 2025 and Q1 2026, especially product upgrades in SiC, MCU, and silicon-based power semiconductors, expansion of end applications from automotive to energy storage and AI data center power supplies, and utilization gains from shipment ramp-up. Goldman Sachs maintains a Neutral rating with a 12-month target price of Rmb121.2.

Core views

Goldman Sachs' core view is that the company has structural improvement factors in its fundamentals, but near-term performance remains constrained by pricing and valuation. On the one hand, StarPower may improve gross margin through higher utilization, more end applications, and product mix upgrades; on the other hand, power semiconductor device prices remain under pressure, automotive demand recovery is uncertain, and valuation is viewed as relatively reasonable, so a more positive rating is not supported.

Analysis framework

The report combines management research, business-driver decomposition, and a relative valuation framework. On the operating side, it focuses on revenue declines, gross margin pressure, and future recovery drivers; on valuation, it uses a target P/E approach, applying a 31.0x P/E to 2026E EPS, and references the relationship between industry P/E and year-on-year EPS growth. The report also discloses Goldman Sachs' internal research framework explanations, including GS Factor Profile, M&A Rank, and Quantum.

Methodology notes

• Valuation methodsTarget P/E method

  2026E EPS × 31.0x target P/E

  Goldman Sachs uses a 12-month target price framework for StarPower, applying a 31.0x target P/E to 2026E EPS; the target P/E is derived from the relationship between industry P/E and EPS year-on-year growth.

• Investment ratingGoldman Sachs rating definition

  Neutral

  Goldman Sachs treats stocks that are not included in its Buy or Sell investment lists but still carry an active rating as Neutral; the rating reflects the potential for total return relative to the coverage universe.

• Factor profileGS Factor Profile

  Growth, Financial Returns, Multiple, and Integrated

  This framework compares a stock with the market and industry peers through growth, financial returns, valuation multiples, and integrated factors to provide investment context.

• M&A scenarioM&A Rank

  Potential acquisition target score from levels 1 to 3

  Goldman Sachs uses qualitative and quantitative factors to assess the probability of a company becoming an acquisition target, where 1 indicates a high probability, 2 a medium probability, and 3 a low probability; if the score is 1 or 2, it may be included in the target price.

Asset mapping & comparison

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

• StarPower (603290.SS)

  Research target

  Strengths

  Expansion of product lines in SiC MOSFETs, IGBTs, automotive MCUs, and silicon-based power semiconductors; end applications expanding from automotive to energy storage and AI data center power supplies; shipment ramp-up is expected to lift utilization and improve gross margin.

  Weaknesses

  Chinese EV demand is weaker than expected, and the automotive business still accounts for about 50% of revenue; new products and technological generation upgrades add R&D burden; the shift from fabless to fab-lite has increased raw-material and depreciation costs.

  Comparison

  Relative to the coverage universe, Goldman Sachs sees positive factors in the company's product upgrades, but pricing pressure in the power semiconductor industry and current valuation make Neutral more appropriate than a more positive rating.

  Risks

  The pace of IGBT market growth, new design wins, market-share gains, new product development, and changes in industry competition could all affect earnings and valuation.

• Power semiconductor industry

  Industry backdrop

  Strengths

  Greater adoption of SiC in new end markets such as energy storage and AI data center power supplies could bring incremental demand.

  Weaknesses

  Overall power semiconductor device prices remain under pressure, and the competitive environment affects gross margins.

  Comparison

  The company is trying to diversify away from the more competitive automotive market into applications such as energy storage and AI data centers.

  Risks

  Price declines, intensifying competition, and weaker-than-expected end-market demand could suppress industry profitability.

Key data

• RatingNeutralGoldman Sachs maintains a Neutral rating.
• 12-month target priceRmb121.2Based on a 31.0x 2026E P/E.
• Valuation multiple31.0x 2026E P/EThe target P/E is derived from the relationship between industry P/E and EPS year-on-year growth.
• Automotive revenue mixAbout 50%Management said automotive still accounts for about half of total company revenue, so weaker-than-expected demand in the Chinese EV market has a large impact on the company.
• Research timing and location2026-05-22, ShanghaiGoldman Sachs met with StarPower management during the China Tech Tour.
• Target price historyAbove Rmb300 in 2023, below Rmb100 in 2024/2025, then recovering to around Rmb121.2From the target price history chart; the image resolution is low, and some points are approximate.

Impact & implications

For investors, the report suggests that StarPower's investment thesis is gradually shifting from a single focus on automotive power semiconductors toward product mix upgrades and penetration across multiple end markets. If energy storage, AI data center power supplies, and next-generation SiC MOSFETs scale up, while utilization improves, gross margin may recover; but if pricing pressure in power semiconductors persists, automotive demand remains weaker than expected, or R&D and depreciation burdens continue to weigh on earnings, upside in valuation will be limited.

Risks

• IGBT market growth stronger or weaker than expected.
• New design wins and market-share gains faster or slower than expected.
• New product development progress faster or slower than expected.
• Industry competition weaker or stronger than expected.
• Persistent pricing pressure in power semiconductors could weaken gross margin recovery.
• Weaker-than-expected demand in the Chinese EV market could continue to weigh on automotive-related revenue.

What to watch

• Speed of shipment ramp-up and the magnitude of utilization improvement.
• Orders, design wins, and revenue contribution from SiC in energy storage and AI data center power supplies.
• Progress in product iterations from Gen-3 SiC MOSFETs and IGBTs to Gen-8 and automotive MCUs.
• Whether price declines in power semiconductors continue to narrow.
• Changes in gross margin pressure from R&D spending, raw-material costs, and depreciation expenses.
• Whether the automotive business share declines and whether non-automotive end-market revenue continues to grow.