National Silicon Earnings: Abysmal Quarter and Investment Losses Limit Options for Expansion

We maintain our fair value estimate for no-moat National Silicon Industry Group, or NSIG, at CNY 3.70 per share after the firm reported disappointing first-quarter results. The letdown is a reminder that aggressive capital expenditure is not enough to chip away leaders’ market share in faster-growing high-performance computing and artificial intelligence applications. Taiwan peers GlobalWafers and its parent Sino-American Silicon Products remain our picks in the sector.