SG Micro (300661.SZ): China AI Tour: C-level visit: Optical module analog IC in expansion; Product mix upgrade driving ASP; Neutral

We hosted SG Micro's Deputy Chairman on Sep 11 in Beijing during our China AI Tour. Management is positive on its optical module analog IC business and automotive grade products, supported by rising end demand, product mix upgrade, client base expansion, and rich product portfolio. We remain constructive on SG Micro's PMIC (Power Management IC) / Signal chain product expansion to AI data centers, riding on the AI infrastructure upcycle, dollar content increase and product mix upgrade, while we maintain Neutral on fair valuation. Key takeaways: Management expects strong growth for its optical module analog IC business, leveraging its rich product portfolio and diversified client base. The company is closely collaborating with major customers on next-generation products, which would bring higher entry barrier and ASP uptrend. Management aims for an increasing revenue mix for its automotive business and mentioned that SG Micro is expanding its automotive grade product portfolio, leveragin