TFME(SZ:002156) CSC SECURITIES (HK) LTD·2026-01-20 07:29Investment Rating - The report assigns a "Buy" rating to the company, indicating a potential upside in the stock price [5][8][11]. Core Insights - The company plans to raise 4.4 billion RMB to expand its packaging and testing capacity in storage, automotive, and high-performance computing sectors, which is expected to enhance its influence in the packaging and testing industry [8][11]. - The demand for packaging and testing services is strong, driven by the rapid growth of the AI industry and increased demand for storage and advanced packaging since the second half of 2025. Major competitors have raised prices, reflecting an overall improvement in industry conditions [8][11]. - The company is positioned to benefit significantly from the anticipated shortage of CPUs globally, as it is a core packaging and testing partner for AMD. Projected net profits for 2025-2027 are 1.28 billion RMB, 1.88 billion RMB, and 2.71 billion RMB, representing year-on-year growth rates of 89%, 47%, and 44% respectively [8][11]. Financial Projections - The company is expected to achieve net profits of 1.28 billion RMB, 1.88 billion RMB, and 2.71 billion RMB for the years 2025, 2026, and 2027, with corresponding earnings per share (EPS) of 0.84 RMB, 1.24 RMB, and 1.79 RMB [10][11]. - The price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are projected to be 57, 39, and 27 respectively, indicating a favorable valuation compared to historical performance [10][11]. Market Performance - The company's stock price has shown significant growth, with a 34.8% increase over the past month and a 69.6% increase over the past year [1]. - The stock price as of January 19, 2026, was 48.19 RMB, with a target price set at 65.0 RMB, suggesting a strong potential for further appreciation [1][8].