NAURA(SZ:002371)2025-12-12 02:19Investment Rating - The report assigns a "Buy" rating to the company with a 12-month target price of Rmb 587.50, up from the previous target of Rmb 545.50 [5]. Core Insights - The demand outlook for the company is strong, with significant underestimation in its valuation. The company has been added to UBS's Key Call Buy list [1]. - Earnings forecasts for 2026 and 2027 have been raised by 0.3% and 6.7% respectively, reflecting an increase in domestic wafer fabrication equipment (WFE) spending [1][2]. - The company is expected to benefit from advancements in 3D NAND applications and increased visibility in domestic advanced logic chip demand [1][2]. Summary by Sections Earnings Forecast Adjustments - The company's WFE revenue estimates for 2026 and 2027 have been increased by 1% and 8%, corresponding to Rmb 400 million and Rmb 4.5 billion respectively [2]. - The revenue growth is anticipated to be confirmed mostly in 2027 due to the typical 12-month order-to-revenue recognition cycle [2]. Growth Outlook Post-2027 - Concerns regarding the sustainability of domestic WFE demand post-2027 are addressed, indicating that capacity expansion for advanced logic and storage wafer fabs in China may remain strong from 2026 to 2030 [3]. - The projected CAGR for the company's revenue and earnings from 2027 to 2029 is estimated at 17% and 20% respectively [3]. Valuation - The target price has been adjusted to Rmb 587.50 based on a P/BV multiple increase from 8.6x to 9.3x, reflecting improved mid-term ROE [4][14]. - The new target price implies a PE of 42x for 2026E and 31x for 2027E, compared to a projected earnings CAGR of 30% from 2026 to 2028 [4][14]. Financial Projections - The company's revenue is projected to grow from Rmb 39.43 billion in 2025E to Rmb 66.88 billion in 2027E, with a significant increase in net profit from Rmb 6.75 billion to Rmb 13.73 billion during the same period [7][16]. - The earnings per share (EPS) is expected to rise from Rmb 9.32 in 2025E to Rmb 18.95 in 2027E, reflecting a growth of 48.9% [7][16].