EBSCN·2026-02-12 11:51Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company [1]. Core Insights - The company's revenue for Q4 2025 exceeded expectations, reaching $2.489 billion, a year-over-year increase of 12.8% and a quarter-over-quarter increase of 4.5%, surpassing the previous guidance range of $2.38 to $2.43 billion [4]. - The gross margin for Q4 2025 was 19.2%, slightly below market expectations of 20%, primarily due to rising depreciation costs [4]. - The net profit for Q4 2025 was $203 million, a decline of 24.9% year-over-year and 35.5% quarter-over-quarter [4]. - For the full year 2025, the company achieved a record revenue of $9.327 billion, a year-over-year increase of 16.2%, with a gross margin of 21% [4]. Revenue Breakdown - In Q4 2025, the revenue breakdown by application showed that consumer electronics accounted for 47.3% of wafer revenue, with a quarter-over-quarter increase of 3.9 percentage points [5]. - The revenue from 12-inch wafers constituted 77.2% of wafer revenue, with a year-over-year decrease of 3.4 percentage points [5]. - Geographically, revenue distribution in Q4 2025 was 87.6% from China, 10.3% from the U.S., and 2.1% from Europe and Asia [5]. Demand and Capacity Insights - The demand for AI and automotive sectors is driving incremental growth, while the supply tightness in consumer electronics storage is expected to improve by the second half of 2026 [6]. - The company maintained a high utilization rate of 95.7% in Q4 2025, with guidance indicating stability for Q1 2026 [7]. - Capital expenditure for Q4 2025 was $2.41 billion, with expectations for 2026 to remain consistent with 2025 levels [7]. Profit Forecast and Valuation - The profit forecast for 2026-2027 has been cautiously adjusted downward, with expected net profits of $1.08 billion and $1.25 billion for 2026 and 2027, respectively [8]. - The current stock price corresponds to a price-to-book ratio of 3.2x for H-shares and 5.7x for A-shares for the years 2026-2027 [8]. - Despite short-term profit pressures, the core growth logic of benefiting from AI demand and domestic substitution trends remains strong [9].