ICG

We rate Intchains Group Ltd (ICG) as a Reduce with a composite score of 40.4/100 at a current price of $1.33. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in quality (59th percentile) and value (54th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (16th percentile) and stability (27th percentile) tempers our overall conviction. We assign a Narrow Moat rating (51/100), High uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Intchains Group Ltd holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 40.4/100 places it at rank #3490 in our full 7,333-stock universe. At $396M in market capitalization, Intchains Group Ltd is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 233%, though momentum at the 16th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 54% (+11.2pp vs sector) narrow to operating margins of 1% (-0.2pp vs sector) and net margins of 18.3%, yielding a gross-to-net conversion rate of 34%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $1.33, Intchains Group Ltd is trading near fair value based on current fundamentals. Our value factor score of 54/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 22.2x (roughly in line with the sector median of 22.3x), EV/EBITDA of 1.9x (discounted to peers), P/B of 0.6x, P/S of 0.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to Intchains Group Ltd. Key risk factors include below-average price stability (27th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: below-average price stability (27th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 27th percentile and quality factor at the 59th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 54% provide a buffer against cost pressures; conservative leverage (0% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Intchains Group Ltd's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 20.3%, disciplined leverage (0% D/E), best-in-class net margins of 18.3%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Intchains Group Ltd meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 18.9% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Intchains Group Ltd receives a Reduce rating with a composite score of 40.4/100 (rank #3490 of 7,333). Our quantitative framework assigns a Narrow Moat (51/100, trend: stable), High uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 38/100.

Our analysis does not support a constructive view on Intchains Group Ltd at this time. The combination of the current quantitative profile, high uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.