HK Stock Connect Insight | EPIWORLD (02726.HK) Falls 29% Since Stock Connect Inclusion; Key International Customer to Buy More 6-Inch and 8-Inch Epiwafers in September

On November 3, 2026, the silicon carbide and semiconductor materials theme traded divergently, and EPIWORLD (02726.HK) rose. As of 13:12, the stock was quoted at HKD 75.050, up 1.01%, with a turnover of about HKD 6.5366 million and a market capitalisation of about HKD 31.940 billion based on the latest price. It touched a low of HKD 73.800 and a high of HKD 77.400 during the day, with an amplitude of 4.84%.

In terms of recent movements, EPIWORLD's share price over the past week (October 28 to November 3, including today's intraday price) trended lower in a volatile range. It touched an intraday low of HKD 70.550 on October 23, a record low since listing, and has since stabilised somewhat.

It is understood that on September 7, the new round of regular adjustments to Stock Connect officially took effect. The number of constituents of the Hang Seng Composite Index increased from 534 to 580, and EPIWORLD (02726.HK) was included, and was thereby added to Stock Connect.

Public information shows that EPIWORLD listed on the Main Board of HKEX on March 30, 2026 at an offer price of HKD 76.26, offering about 21.4921 million H shares globally (10% for the Hong Kong public offering and 90% for the international offering), raising gross proceeds of about HKD 1.640 billion and net proceeds of about HKD 1.560 billion. The company is a direct listing on the HKEX Main Board; the Hong Kong public offering was about 50.66 times subscribed and the international offering about 1.95 times, with one cornerstone investor, Xiamen Advanced Intelligent Manufacturing Industry Investment Co., Ltd., subscribing for USD 99.10 million, or about 10.0585 million shares.

On its debut, the stock opened at HKD 110.00, up 44.2% from the offer price, and closed at HKD 103.00, up 35.06%, with a market capitalisation of HKD 43.835 billion. On the next trading day (March 31), it closed at HKD 94.600, down 8.2%.

At present, since its listing on March 30, 2026, the share price has risen from the offer price of HKD 76.26 to a peak of HKD 141.000, and is currently about 46.8% below its post-listing high. After joining Stock Connect, the share price has fallen 29.1% cumulatively from its September 7 close of HKD 105.800 to date. In terms of market capitalisation, the peak market capitalisation shortly after listing was about HKD 60.0 billion, and had fallen to about HKD 31.940 billion as at the intraday quote on November 3.

It is understood that Hang Seng Indexes Company announced the results of its quarterly review as at June 30, 2026 on August 21, and EPIWORLD was included in the Hang Seng Composite Index, with the constituent changes implemented after the close on September 4 and effective on September 7.

The basis for EPIWORLD's inclusion lies, first, in its inclusion in the Hang Seng Composite Index, which gave it the "index identity" of a Stock Connect eligible security. Second, the company's market capitalisation remained at a high level around the review period: based on the closing price of HKD 115.600 on June 30, 2026, the total market capitalisation was about HKD 49.198 billion, well above the HKD 4 billion market capitalisation threshold for small-cap Stock Connect eligible securities. In addition, the securities added in this adjustment were concentrated in AI, robotics, innovative drugs and high-end manufacturing, and EPIWORLD, as a "silicon carbide epitaxial materials supplier", is consistent with this structural direction. (The above is an inference based on public rules and data, not an official determination by the exchange. The specific reason for inclusion is subject to the exchange's announcement.)

Although this Stock Connect inclusion provides EPIWORLD with institutional conditions to broaden southbound capital participation and improve liquidity, the company's share price has fallen 29.1% since inclusion on September 7 and remains slightly below its offer price of HKD 76.26, occurring alongside a 92.0% year-on-year increase in first-half revenue.

Public information shows that EPIWORLD's core products are silicon carbide (SiC) epitaxial wafers covering 4-inch, 6-inch and 8-inch sizes, with a 12-inch product launched globally for the first time in December 2025; the company has been the world's largest SiC epitaxial supplier by annual wafer volume sold since 2023, with a market share of more than 30% in 2024 (China Insights Consultancy), and was the first globally to achieve large-scale external supply of 8-inch SiC epiwafers. The company led the drafting of the world's first SiC epitaxy SEMI international standard (SEMI M92-0423), and its products cover voltages from 300V to 30,000V, used in electric vehicles, charging infrastructure, renewable energy, energy storage systems and AI data centres. On customers, four of the world's top five SiC power device manufacturers and eight of the top ten are its customers, with 134 customers during the track record period.

On the financial side, the company has maintained scale through the cycle: revenue was RMB 441 million, RMB 1.143 billion and RMB 974 million in 2022, 2023 and 2024 respectively, with adjusted net profit of RMB 172 million, RMB 384 million and RMB 324 million over the same years; in 2025, revenue was RMB 765 million, down 21.4% year on year, the gross margin was 24.8%, down 9.3 percentage points, and net profit attributable to shareholders was RMB 12 million. In the first half of 2026, revenue was RMB 578 million, up 92.0% year on year; gross profit was RMB 161 million, up 193.5%, with the gross margin rising from 18.2% to 27.8%; net profit attributable to shareholders was RMB 49 million, compared with a loss of RMB 1.97 million a year earlier, a turnaround; adjusted net profit was RMB 139 million, up 43.4%; research and development expenses were RMB 53.47 million, up 31.3%. As at June 30, 2026, cash and cash equivalents including time deposits totalled RMB 3.22 billion, up 76.3% from the end of the previous year; total assets were RMB 6.31 billion and net assets RMB 4.54 billion.

In terms of products and business developments, EPIWORLD's sales volume of 8-inch SiC epiwafers in the year to date has exceeded the full-year level of 2025, with 35 customers purchasing 8-inch products; in September, the company announced that a key international customer had agreed to purchase additional 6-inch and 8-inch SiC epiwafers, with maximum sales of about USD 95.80 million; and during the reporting period it achieved a breakthrough with small-batch orders for 12-inch SiC epiwafers.

CMB International noted in a research report that the SiC epiwafer industry is shifting from capacity expansion to competition on effective capacity, cost control and customer qualification capability; the company was the world's first to achieve large-scale commercial external supply of 8-inch SiC epiwafers and launched a 12-inch epiwafer in December 2025, with its technology leadership, stable large-scale supply capability and quality customer resources forming its core competitive barriers; its Xiamen base plans to continue investing in 8-inch capacity, while a production base with annual capacity of 400,000 8-inch epiwafers is under construction in Penang, Malaysia; several core downstream customers' products have entered Nvidia's AI data centre supply chain, and Nvidia's proposed 800V high-voltage direct current architecture is pushing power device voltage ratings from 650V to 1,200V and above, which is expected to open up medium- to long-term demand space for the company.