Core Viewpoint - Jing Sheng Electromechanical announced the successful commissioning of its first 12-inch silicon carbide substrate processing pilot line, marking a significant advancement in domestic production capabilities and positioning the company as a leader in SiC substrate technology [2] Company Summary - On September 26, the first 12-inch silicon carbide substrate processing pilot line was officially commissioned at the subsidiary Zhejiang Jing Rui SuperSiC [2] - The subsidiary has achieved 100% domestic production in the entire process from crystal growth, processing to testing, indicating a shift from parallel development to leading in global SiC substrate technology [2] - The company aims to accelerate the mass production process of its production line to provide high-quality, low-cost large-size silicon carbide substrates [2] Industry Summary - The successful commissioning of the pilot line is expected to contribute to the robust development of China's third-generation semiconductor industry [2] - The company plans to collaborate with industry chain partners to promote the growth of the semiconductor sector [2]

Core Viewpoint - The company is actively expanding its silicon carbide production capacity to strengthen its global market supply capabilities [2] Group 1: Company Initiatives - The company announced plans to establish a 300,000 pieces per year silicon carbide substrate project in Shangyu [2] - The company is investing in an 8-inch silicon carbide substrate industrialization project in Penang, Malaysia, to leverage the promising global silicon carbide industry [2] - A project for producing 600,000 pieces per year of 8-inch silicon carbide substrates is being developed in Yinchuan, enhancing the company's technological and scale advantages in the silicon carbide substrate materials sector [2]

Core Viewpoint - Jing Sheng Mechanical and Electrical (300316) announced on October 28 that it has achieved domestic substitution of semiconductor quartz crucibles, leading in market share and gradually increasing it, while successfully overcoming technical bottlenecks in large-size semiconductor synthetic sand quartz crucibles [1] Group 1: Company Developments - The company has leveraged both technological and scale advantages in the semiconductor consumables sector [1] - The products have passed customer verification and have entered the industrialization stage [1] Group 2: Industry Position - The company is leading in market share for semiconductor quartz crucibles and is progressively enhancing its position [1] - The company is extending its layout to key auxiliary materials such as quartz products [1]

Group 1 - The core viewpoint of the article highlights that the company, Jing Sheng Mechanical & Electrical (300316), is benefiting from the ongoing development of the semiconductor industry and the acceleration of domestic production processes [1] - As of June 30, 2025, the company has unfulfilled contracts for integrated circuit and compound semiconductor equipment exceeding 3.7 billion yuan (including tax) [1]

Financial Performance - In the first three quarters of 2025, the company achieved a revenue of ¥8,273,220,959.41 and a net profit attributable to shareholders of ¥901,103,576.55 [2] - As of June 30, 2025, the company had unfulfilled contracts for integrated circuit and compound semiconductor equipment exceeding ¥3.7 billion (including tax) [5] Product Development - The company launched its first 12-inch silicon carbide (SiC) substrate processing pilot line on September 26, 2025, marking a significant advancement in domestic equipment development with 100% localization [2][3] - The pilot line covers the entire process from crystal growth to detection, utilizing domestically developed equipment, thus establishing a complete closed loop for 12-inch SiC substrates [3] Capacity Expansion - The company is actively expanding its SiC production capacity, with a project in Shangyu aiming for an annual output of 300,000 SiC substrates and an 8-inch SiC substrate industrialization project in Penang, Malaysia [4] - Additionally, a project in Yinchuan is set to produce 600,000 8-inch SiC substrates annually, enhancing the company's technological and scale advantages in the SiC substrate field [4] Semiconductor Equipment Progress - The company has successfully delivered its self-developed 12-inch atmospheric silicon epitaxy equipment to leading domestic clients, achieving international advanced levels in key performance indicators [6] - The company is also advancing the market promotion of new products such as the 12-inch dry-in-dry-out edge grinding machine and the 12-inch double-sided thinning machine [6] Component and Material Development - The subsidiary, Jinghong Precision, is focusing on the localization of core semiconductor components, enhancing manufacturing capabilities and product quality [8] - In the semiconductor consumables sector, the company has achieved domestic substitution for quartz crucibles, leading the market share and gradually increasing it [10] Client Base and Market Position - The company has established a strong reputation among high-end clients in the semiconductor and photovoltaic industries, maintaining long-term strategic partnerships with notable firms [10] - Major clients include well-known companies such as Longi Green Energy, Tongwei Co., and JinkoSolar, contributing to the company's industry influence [10]

Core Insights - The best-performing fund managed by fund manager Luo Shifeng is the Nord Cycle Strategy Mixed Fund (570008), which achieved a quarterly net value increase of 52.47% by the end of Q3 2025 [1] Fund Performance Summary - The Nord Value Advantage Mixed Fund (570001) has a total fund size of 24.81 billion, with an annualized return of 7.58% and a Q3 2025 increase of 44.93%, with its top holding being Sungrow Power [2] - The Nord Cycle Strategy Mixed Fund (570008) has a fund size of 9.26 billion, an annualized return of 15.18%, and a Q3 2025 increase of 52.47%, with its top holding being NewEase [2] - The Nord Value Discovery - Annual Holding Mixed Fund (012150) has a fund size of 5.39 billion, with a negative annualized return of -0.97% and a Q3 2025 increase of 26.73%, with its top holding also being Sungrow Power [2] Stock Trading Cases - Notable stock trading cases managed by Luo Shifeng include: - Sungrow Power: Bought in Q3 2020 and sold in Q1 2021, with an estimated return of 300.71% and a company performance growth of 25.15% during the holding period [3] - Longi Green Energy: Held from Q1 2018 to Q2 2023, with an estimated return of 231.97% and a company performance growth of 488.96% [3] - Midea Group: Held from Q2 2016 to Q4 2017, with an estimated return of 136.18% and a company performance growth of 51.35% [3] Underperforming Stock Cases - Underperforming stock cases include: - Opcon Vision: Bought in Q3 2021 and sold in Q1 2024, with an estimated return of -76.32% despite a company performance growth of 40.04% [4] - Tongce Medical: Held from Q3 2021 to Q2 2023, with an estimated return of -63.37% and a company performance growth of 2.37% [4] - Sanan Optoelectronics: Held from Q4 2017 to Q2 2019, with an estimated return of -51.40% [4]

Summary of Key Points from the Conference Call of Jing Sheng Electromechanical Industry Overview - Jing Sheng Electromechanical focuses on three main business areas: semiconductor equipment, substrate materials, and consumables [2][3][5] - The company is actively advancing its 12-inch silicon epitaxy equipment, achieving international advanced levels in key indicators [2][3] - The transition from 6-inch to 8-inch silicon wafers is a significant trend in the industry, with expectations that 8-inch will become mainstream by 2027 [6][10] Company Performance - In the first three quarters of 2025, Jing Sheng Electromechanical reported revenue of 8.273 billion yuan and a net profit of 901 million yuan [3] - The company has successfully delivered 12-inch silicon epitaxy equipment to leading domestic clients and is developing new products such as laser external groove and laser slotting equipment [3][4] - The third quarter saw improved profitability due to high-margin semiconductor equipment revenue and effective cost control [3][12] Product Development and Market Strategy - The first 12-inch silicon carbide substrate processing pilot line has been completed, with 100% domestic equipment [2][5] - The company is expanding its global supply capabilities by building an 8-inch silicon carbide substrate project in Penang, Malaysia [2][7] - Jing Sheng Electromechanical is positioned as a leader in the 12-inch silicon carbide substrate market, with competitive advantages in 6-inch and 8-inch sizes [2][6] Competitive Landscape - The silicon carbide substrate industry is expected to see increased concentration among leading companies, with potential price declines due to scale supply increases [2][7] - The company aims to maintain its competitive edge through technological innovation and cost control, particularly in larger sizes [2][6] Future Outlook - The semiconductor equipment industry is expected to maintain high growth due to China's focus on expanding its semiconductor industry and increasing self-sufficiency [12][20] - The company anticipates a rebound in the photovoltaic equipment market in 2026, following a challenging 2025 [15][17] - The demand for silicon carbide in high-power applications, such as data centers, is projected to grow significantly, driven by its low-loss characteristics [11][13] Additional Insights - The company is investing in advanced manufacturing technologies to enhance efficiency for downstream clients [4] - The transition to larger wafer sizes is expected to lead to a healthier price trend for 8-inch wafers due to limited domestic capacity [10] - The company is also exploring various thermal materials, including silicon nitride and gallium nitride, to meet the growing demand in power semiconductors [18][20] This summary encapsulates the critical insights from the conference call, highlighting the company's strategic positioning, performance metrics, and future industry trends.

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's Q3 net profit improved sequentially, driven by enhanced cost control and increased gross margin [7] - The company has planned a total production capacity of 900,000 pieces for silicon carbide substrates, with new applications opening up for 12-inch substrates [7] - The company maintains a positive outlook on its multi-business growth potential despite current challenges in the photovoltaic industry [7] Financial Performance Summary - For the first three quarters of 2025, the company achieved total revenue of 8.27 billion yuan, a year-on-year decrease of 42.9%, and a net profit attributable to shareholders of 900 million yuan, down 69.6% year-on-year [7] - In Q3 2025, the company reported a single-quarter revenue of 2.474 billion yuan, a year-on-year decrease of 42.9% and a sequential decrease of 7.0% [7] - The gross margin for Q3 2025 was 29.21%, showing a year-on-year decrease of 3.0 percentage points but a sequential increase of 8.6 percentage points [7] - The company's cash flow from operating activities for Q3 turned negative, primarily due to a decrease in cash received from sales [7] Capacity and Product Development - The company has a clear advantage in 8-inch substrate production, with plans to benefit from the industry's shift from 6-inch to 8-inch production [7] - The company has successfully launched its first 12-inch silicon carbide substrate processing pilot line, which opens new application spaces [7] - The company is focused on providing comprehensive solutions for large silicon wafers, advanced packaging, and silicon carbide equipment [7] Earnings Forecast and Valuation - The company’s net profit forecasts for 2025-2027 are 1 billion, 1.2 billion, and 1.5 billion yuan, respectively, corresponding to a current P/E ratio of 52, 42, and 34 times [7]

Summary of Jingsheng Mechanical & Electrical Co 3Q25 Earnings Call Company Overview - **Company**: Jingsheng Mechanical & Electrical Co (300316.SZ) - **Industry**: China Industrials - **Market Cap**: Rmb 55,105 million - **Stock Rating**: Underweight - **Price Target**: Rmb 19.00, representing a downside of 55% from the current price of Rmb 42.08 as of October 24, 2025 Key Financial Results - **3Q25 Revenue**: Rmb 2,474 million, down 43% YoY [6] - **Cost of Goods Sold**: Rmb (1,752) million, down 40% YoY [2] - **Gross Profit**: Rmb 723 million, down 48% YoY [2] - **Operating Profit**: Rmb 251 million, down 72% YoY [2] - **Profit Before Tax**: Rmb 299 million, down 69% YoY [2] - **Profit After Tax**: Rmb 245 million, down 71% YoY [2] - **Net Profit Margin**: 10.6%, down 9.3 percentage points YoY [2] - **Earnings Per Share (EPS)**: Rmb 0.20, down 70% YoY [2] Margins and Expenses - **Gross Profit Margin**: 29.2%, down 3.0 percentage points YoY but up 9 percentage points QoQ [6] - **R&D Expenses**: Rmb (208) million, down 19% YoY [2] - **Selling Expenses**: Increased by 27% YoY [2] - **Asset/Credit Impairment**: Rmb (102) million, a significant increase of 103% YoY [2] Industry Context - The company continues to face challenges from the solar equipment and materials sector, which is in a downcycle [6] - Contract liabilities decreased by 55% YoY, slightly improved from a 62% decline at the end of 2Q25 [6] Analyst Insights - The financial results were largely in line with consensus expectations, indicating a stable outlook despite the significant YoY declines [1][6] - The company is expected to face ongoing pressure from gross margin due to high exposure to materials and low downstream solar product prices [7] Risks and Opportunities - **Upside Risks**: Faster-than-expected upgrades in crystal growing furnace technology and higher product sales in materials [9] - **Downside Risks**: Slower upgrades in technology and lower competitiveness of new products in the semi and SiC segments [9] Conclusion - Jingsheng Mechanical & Electrical Co's 3Q25 results reflect significant challenges in the current market environment, particularly within the solar sector. The company is rated underweight, with a substantial downside to the price target, indicating cautious sentiment among analysts.

Core Viewpoint - Jing Sheng Mechanical and Electrical (300316) reported a significant decline in both revenue and net profit for the first three quarters of 2025, indicating potential challenges in the company's financial performance [1] Financial Performance - For the first three quarters of 2025, the company achieved a revenue of approximately 8.273 billion yuan, representing a year-on-year decrease of 42.86% [1] - The net profit attributable to shareholders for the same period was about 901 million yuan, reflecting a year-on-year decline of 69.56% [1]