Innoscience: Strong Long-Term GaN Growth Prospects Balanced by Gradual Adoption and Execution Risks Justify Hold Rating

In a report released today, from Morgan Stanley maintained a Hold rating on InnoScience (Suzhou) Technology Holding Co Ltd Class H, with a price target of HK$69.00.

Morgan Stanley has given his Hold rating due to a combination of factors, including Innoscience’s strong growth outlook but also the time needed for its key markets to fully mature. Management is guiding to a sharp rise in revenue and a significant improvement in gross margin by 2026, supported by aggressive capacity expansion and a growing order pipeline across data centers, autos, robotics, and home appliances.

At the same time, Morgan Stanley notes that the broader adoption of GaN in 800V data centers will likely be gradual, as it requires meaningful changes to system architectures, which tempers the near-term upside. While the company’s integrated device manufacturer model and close cooperation with leading customers such as NVIDIA’s power suppliers underpin its strategic position, these positives are viewed as largely balanced by execution and timing risks, justifying a neutral, or Equal-weight, stance.