Core Viewpoint - The traditional stock market saying "May is poor, June is desperate, and July is a turnaround" does not hold true based on statistical analysis of the A-share market from 1991 to 2024, indicating that the calendar effect is a misconception [1] Group 1: Market Analysis - The A-share market has shown that from 2009 to 2024, April generally has a low probability of rising, while August tends to have a larger average decline [1] - June and July have relatively high probabilities of rising, contrary to the saying, with May showing a rise probability of less than 50% but not being the lowest month [1] - In the earlier period from 1991 to 2008, October had the lowest probability of rising, while May and June had higher probabilities, further debunking the "poor May" notion [1] Group 2: Sector Focus - In May, the market is expected to shift back to technology growth sectors, with catalysts including updates on AI large models and developments in robotics [2] - Key areas of focus include AI applications in cloud computing, office automation, and healthcare, as well as the ongoing trend of domestic semiconductor production [2] - The low-altitude economy is anticipated to gain momentum following the announcement of pilot cities, with strong expectations for construction and development in related sectors [2] Group 3: Market Performance - Recent market performance showed a broad increase in individual stocks, with nearly 5,000 stocks rising and trading volume expanding to 1.3 trillion, indicating a recovery in market sentiment [3] - Technology sectors such as computers, communications, machinery, media, and electronics led the gains, while defensive sectors like food and beverage showed minimal increases [3]

Investment Rating - The report maintains an "In-Line" industry view for Greater China Technology Semiconductors [6]. Core Insights - China's AI GPU self-sufficiency is projected to increase from 34% in 2024 to 82% by 2027, with the total addressable market (TAM) for cloud AI expected to grow at a CAGR of 28% to reach US$239 billion by 2027, with China accounting for approximately US$48 billion [2][17]. - The overall semiconductor self-sufficiency ratio in China is currently at 24%, up from 20% in 2023, driven by government subsidies, inventory digestion, and capacity ramp-up in memory and leading node products [3][11]. - Local GPU suppliers like Huawei and Cambricon are primarily supported by SMIC, which faces capacity expansion challenges [2][18]. Summary by Sections AI GPU Self-Sufficiency - The self-sufficiency ratio for AI GPUs in China is estimated at 34% for 2024 and expected to rise to 82% by 2027, with significant growth in the cloud AI market [2][17]. - The TAM for cloud AI is projected to grow to US$48 billion in 2027, with China expected to capture 20% of global demand [2][17]. Semiconductor Market Overview - China's semiconductor market was valued at approximately US$183 billion in 2023, with local companies generating US$43 billion in revenue, marking a 36% increase from US$32 billion in 2023 [3]. - The self-sufficiency ratio for semiconductors in China is currently at 24%, reflecting a 4 percentage point increase from the previous year [3][11]. Localization Progress - Significant advancements have been made in memory, image sensors, and power semiconductors, while equipment and EDA progress has been slower than expected [8]. - Local vendors in memory and power semiconductors are benefiting from the growth in electric vehicles and gaining market share over global competitors [8]. Stock Implications - The report is equal-weight on SMIC and Empyrean Technology, noting that while SMIC is crucial for local AI chip production, potential Nvidia acquisitions could impact domestic GPU market share [4]. - Positive outlook on China wafer fab equipment makers like Naura, AMEC, and ACM Research due to local foundry and memory capacity expansion [4].

Summary of Conference Call Notes Industry Overview - **Industry**: Technology and Communications in China - **Key Focus Areas**: Tariff impacts on Apple and Nvidia supply chains, China's semiconductor localization, AI development, and Xiaomi's market position Key Points and Arguments Tariff Impact - Investors discussed the impact of reciprocal tariffs announced on April 2, focusing on Apple and Nvidia supply chains [1][2] - The majority of iPhones for the US market will be shipped from India, while other iOS devices will come from Vietnam, indicating a shift in supply chain dynamics [2][3] - Nvidia's supply chain is largely compliant with USMCA, making tariff impacts manageable [2][3] - Investors believe that tariffs are primarily borne by customers rather than suppliers, with US manufacturing costs significantly higher than those in China or Southeast Asia [3][4] China’s Retaliatory Tariffs - China announced a 34% retaliatory tariff on all US imports on April 4, which was later increased to 125% on April 11 [4][5] - This move is expected to disadvantage US integrated device manufacturers (IDMs) like Intel and Texas Instruments while benefiting domestic semiconductor companies in China [5][6] - Concerns about the localization progress in automotive and industrial sectors were raised, with consumer electronics seen as easier to replace [6] AI Chain Developments - Global investors expect the H20 ban to be implemented later in Q2 2025, which poses risks to China's AI capital expenditure [7] - There is a noted decline in investor interest in the AI supply chain, particularly in optical transceivers and data centers [7] - Upstream components like PCBs are expected to have better earnings support compared to downstream infrastructure plays due to ongoing delivery delays [7] Xiaomi's Market Position - Foreign investors are less concerned about Xiaomi's recent car crash incident, viewing it as a key pick due to its lack of US tariff exposure [8][9] - Some investors added positions in Xiaomi when shares pulled back to a 20x 2025 P/E ratio, with expectations of range-bound trading around 25x [8][9] - Despite rising memory spot prices, the overall demand for global consumer electronics is not strong, mitigating short-selling risks [9] Smartphone Market Insights - There are doubts regarding the launch schedule of the foldable iPhone due to past delays, but visibility for a 2H26 launch is considered higher [10] - Concerns about muted smartphone shipments in China for 2025 were expressed, with potential handset subsidies anticipated before major product launches [10] Software Sector - European investors showed more interest in Chinese software companies compared to US investors, with Kingdee identified as having strong fundamentals and AI monetization opportunities [11] Other Important Insights - The interest in Nvidia's supply chain and optical transceivers has decreased since previous marketing trips, indicating a shift in investor focus [1][2] - The potential for another round of handset subsidies in China could stimulate demand, particularly around major shopping festivals [10] - The performance of companies like Cowell, AAC, and BYD in the Apple supply chain is highlighted, with Cowell noted for its high earnings visibility [3][10]

Core Insights - AI is becoming the core engine of the next technological cycle, with the rise of domestic companies like DeepSeek igniting an industrial application boom [1] - The focus should be on China's technology, particularly the evolution of large model capabilities and the investment opportunities in semiconductor localization and humanoid robot mass production [1][6] AI Technology Developments - AI models are experiencing rapid iteration and cost reduction, with large models advancing in multi-modal and reasoning capabilities [2] - Domestic companies like DeepSeek and Alibaba Cloud are significantly lowering inference costs, making high-performance models more accessible for commercial applications [2] - The rise of open-source ecosystems is challenging traditional closed-source models, fostering new business paradigms [2] Application Areas - Attention should be given to application fields that already possess customer, scenario, and data resources, leveraging AI model functionalities [3] - The semiconductor localization sector, including domestic GPU chips and semiconductor equipment, is crucial for the implementation of AI models and applications [3] Humanoid Robots - Humanoid robots are seen as a key vehicle for AI technology transitioning from virtual to physical reality, with mass production being the core challenge [4] - The year 2025 is anticipated to be a pivotal year for humanoid robot mass production, supported by China's efficient supply chain [4] - Investment should focus on high-tech barriers and areas with significant capacity gaps, such as screws, reducers, motors, and joint modules [4] Policy and Market Dynamics - The policy framework from top-level design to local planning is showing effectiveness, with startups and large companies forming an ecosystem [5] - The dual drive of domestic policies and market dynamics presents investment opportunities in humanoid robot companies and their supply chains [5] Strategic Focus Areas - The emphasis for the year should be on China's technology, particularly in large model capabilities and application fields with customer and data advantages [6] - AI is expected to empower various industries, including marketing, education, and biomedicine, while semiconductor localization remains a foundational element [6] - Humanoid robots are identified as a strategic emerging industry, with a focus on resolving mass production issues and enhancing software and model capabilities [6]

Core Viewpoint - The article provides an in-depth analysis of SMIC (Semiconductor Manufacturing International Corporation), focusing on its financial model and growth prospects, particularly in the context of China's semiconductor policies and market dynamics [1]. Financial Indicators - Revenue is projected to grow from $2.07 billion in 2017 to $23.04 billion in 2028, with a compound annual growth rate (CAGR) of 24.8%, driven by the expansion of 28nm and above mature process capacities, especially post-2020 due to global chip shortages and domestic semiconductor policies [2]. - Gross margin is expected to increase from 21.2% in 2017 to 26.1% in 2028, benefiting from scale effects in mature processes, although it remains significantly lower than TSMC's 55% during the same period [2]. - EBITDA is forecasted to rise from $730 million to $12.17 billion, with EBITDA margin improving from 35.5% to 48.5%, indicating enhanced operational efficiency [2]. Capital Expenditure - Capital expenditures (Capex) are set to reach $7.326 billion in 2024, increasing to $8.69 billion in 2025 and peaking at $9.622 billion in 2026, reflecting a CAGR of 18.4% from 2017 to 2028, which is higher than the revenue growth rate [3]. - 90% of Capex is allocated to equipment procurement, primarily for mature process technologies, with 10% for wafer fab infrastructure [4]. - High Capex leads to significant depreciation costs, projected to reach $3.742 billion in 2024, which will pressure profit margins [4]. Business Structure - The wafer business is the core revenue driver for SMIC, contributing approximately 93.2% of total revenue in 2018, expected to rise to 95% by 2024 [7]. - Revenue from the 12/14nm nodes has shown rapid growth, from nearly negligible in 2019 to an estimated $838 million in 2024, driven by increasing market demand [8]. - The 28nm node remains a significant revenue contributor, with expected revenue of approximately $1.145 billion in 2024, despite facing competitive pressures [9]. Capacity and Market Competitiveness - Total capacity is projected to reach 884,000 wafers per month in 2024, increasing to 941,000 in 2025, with major production bases in Shanghai, Beijing, Shenzhen, and Tianjin [13]. - The Shanghai facility focuses on advanced processes, while the Beijing plant targets mature processes, with a significant portion of Capex directed towards expanding capacity in response to rising automotive electronics demand [13]. - Risks include potential impacts from U.S. sanctions on equipment maintenance and over-reliance on policy subsidies, which could lead to price competition [13]. R&D Investment and Technological Innovation - R&D expenditures are expected to rise to $1.031 billion in 2024, accounting for 9.4% of revenue, with a focus on optimizing 14nm FinFET processes and developing IoT chips [16]. - Despite increased R&D spending, challenges remain due to U.S. sanctions limiting access to advanced equipment, resulting in lower yield rates for 14nm processes [16]. - The company aims to balance high R&D intensity with policy requirements, although the return on investment in R&D is projected to be below the cost of capital, indicating diminishing marginal returns [17][18].

Core Viewpoint - The article discusses Japan's recent export controls on semiconductor-related items, which significantly impact China's semiconductor industry, particularly in the area of photolithography materials where Japan holds a dominant position [1][3][15]. Group 1: Japan's Dominance in Semiconductor Materials - Japan holds over 75% market share in photolithography materials, with Tokyo Ohka Kogyo being a major contributor [3]. - Japanese companies lead in silicon wafers and photomask substrates, creating a monopoly in these critical areas [5]. - Japan's established supply chain and quality control in photolithography materials give it a competitive edge over China [9][11]. Group 2: Impact on China's Semiconductor Industry - China's low domestic production rate of high-end photolithography materials, particularly EUV photolithography, hampers its technological advancement [7]. - The reliance on imported materials makes China vulnerable to supply chain disruptions from Japan [9]. - Japan's export controls are seen as a significant blow to China's semiconductor ambitions, potentially stalling its progress in the industry [15][27]. Group 3: Geopolitical Context - Japan's actions are perceived as aligning with U.S. interests in suppressing China's semiconductor development [17][21]. - The article highlights the historical context of U.S.-Japan relations and Japan's willingness to cooperate with the U.S. despite past grievances [19][25]. - The geopolitical landscape is complicated by tensions with neighboring countries, which further impacts China's semiconductor strategy [31]. Group 4: China's Response and Future Prospects - China is focusing on domestic innovation and has made strides in semiconductor material development, including recent patents related to photolithography [31][40]. - Companies like Ba Yi Shi Kong are achieving breakthroughs in photolithography resin production, indicating progress in domestic capabilities [34][36]. - The article emphasizes the importance of building a complete industrial ecosystem to support China's semiconductor industry and reduce reliance on foreign technology [40][42].

Group 1: New Lai Materials - New Lai Materials specializes in clean application materials and high-purity materials, with projected revenue of 2.849 billion yuan in 2024, representing a year-on-year growth of 5.08% [1] - The company benefits from the trend of semiconductor localization, with a forecasted revenue decline of 2.33% in Q1 2025 [1] - The semiconductor market is expected to reach 611.2 billion USD in 2024, while the sterile packaging market is projected to reach 19.49 billion USD by 2031 [1] - New Lai Materials has entered the sterile packaging market through the acquisition of Shandong Bihai and is now part of the supply chain for top domestic and international companies [1] - The company aims to continue promoting domestic substitution, focusing on the semiconductor equipment and component market, and adheres to a "equipment + packaging materials" model [1] Group 2: China Resources Microelectronics - China Resources Microelectronics is focusing on high-growth areas such as automotive electronics and new energy, with expected growth rates of 15% for MOSFETs and 50% for IGBTs [2] - The gross margin is projected to decline by 1.1 percentage points in Q1 2025 due to increased depreciation from the launch of a high-end mask factory and a decrease in IC product prices [2] - The company anticipates capital expenditures of 2 billion yuan in 2025, primarily for capacity ramp-up and equipment investment in packaging and testing [2] - The utilization rate of the 12-inch production line in Chongqing is 70%, while the Shenzhen 12-inch production line is in the capacity ramp-up phase [2] - The product mix includes automotive electronics (21%), new energy (20%), home appliances (18%), industrial equipment (16%), and communication equipment (9%) [2] - The silicon carbide product line is expanding, with automotive-grade SiC MOS and SiC modules undergoing testing with automotive companies [2] - The industry is showing a mild recovery trend, with product prices expected to stabilize within a certain range [2]

Core Viewpoint - The company, Chengbang Ecological Environment Co., Ltd., reported a negative net profit for 2024 and will not distribute cash dividends or issue bonus shares, focusing on optimizing its business structure and expanding into the semiconductor storage sector [1][3]. Company Overview - Chengbang Ecological Environment Co., Ltd. operates in two main business segments: ecological environment construction and semiconductor storage [2][9]. Ecological Environment Construction Business - The Chinese government has set ambitious goals for carbon neutrality by 2060, which presents growth opportunities for the ecological environment sector. However, local government financial constraints due to the real estate downturn have led to reduced investments in municipal landscaping projects, impacting project settlement and revenue [3][10]. - The company holds various construction qualifications, including first-class qualifications in municipal public works and environmental engineering, and has established a strong reputation in the Yangtze River Delta region [3][31]. Semiconductor Storage Business - The global semiconductor industry is projected to reach $627.6 billion in 2024, with the storage market expected to grow by over 81% year-on-year, reaching $167 billion, accounting for 26.61% of the total semiconductor market [5][6]. - The rapid development of AI models is driving increased demand for storage, with AI servers requiring significantly more DRAM and NAND than standard servers [6]. - The domestic market for NAND and DRAM is still developing, with current market shares of 4.1% and below 5%, respectively. However, advancements in technology and government support are accelerating the localization process [7]. - The demand for storage capacity and performance is rising due to the upgrade of terminal devices and the growth of data generation, which is expected to reach nearly 400 ZB by 2028 [8]. Business Strategy and Development - The company aims to develop a dual business model focusing on ecological environment construction and semiconductor storage, enhancing its core competitiveness and industry position [4][33]. - The company has made strategic adjustments, including the divestment of underperforming subsidiaries to optimize resource allocation and improve operational efficiency [29][30]. Financial Performance - The company reported a negative net profit for 2024, leading to the decision not to distribute dividends or issue bonus shares [1][3]. - The company is focused on improving cash flow management and cost control to navigate the complex market environment [28][32].

Summary of the Conference Call for New Yuan Technology Company Overview - **Company**: New Yuan Technology - **Industry**: Semiconductor Equipment Manufacturing Key Financial Performance - **2024 Revenue**: 17.54 billion RMB, a year-on-year increase of 2.13% [3] - **2024 Gross Profit**: 2 billion RMB, a year-on-year decrease of 19% due to increased R&D and personnel costs [5] - **2024 Operating Cash Flow**: 4.4 billion RMB, a significant improvement from -5.6 billion RMB the previous year, attributed to better sales collection and government subsidies [6] - **Q1 2025 Revenue**: 2.75 billion RMB, a year-on-year increase of 13%, but net profit down 70% due to rising costs [7] Product and Market Insights - **New Product Development**: Rapid growth in new products like front-end chemical cleaning machines and bonding machines, with high-temperature sulfuric acid cleaning equipment breaking foreign monopolies [2][3] - **Order Growth**: New signed orders totaled 24 billion RMB in 2024, a 10% increase year-on-year [2][3] - **Market Expansion**: Benefiting from overseas clients' expansion, with expectations for 2025 overseas orders to be at least equal to 2024 [4][15] Collaboration and Synergies - **Partnership with Northern Huachuang**: Strong complementary advantages in dry and wet equipment sectors, focusing on shared resources and joint technology development to reduce costs and improve efficiency [8] R&D and Product Launches - **New Generation Coating and Developing Machine**: Development on schedule, expected to be sent for client validation in Q3 2025 [9] - **Chemical Vapor Cleaning Equipment**: Strong order signing performance in Q1 2025, with expectations to exceed annual targets [10] Financial Adjustments and Challenges - **Gross Margin Impact**: Adjustments in accounting policies have affected reported gross margins, which are expected to stabilize around 40% [11][21] - **Cost Pressures**: New product launches are exerting pressure on margins, particularly for high-end products [16] Future Outlook - **2025 Expectations**: Overall order growth is expected to remain stable, with significant growth anticipated in chemical cleaning machines and bonding machines [24] - **Market Strategy**: Focus on high-temperature sulfuric acid and supercritical cleaning equipment to drive sales in the front-end market, which is seen as a blue ocean opportunity [19][25] Conclusion - **Strategic Positioning**: New Yuan Technology is well-positioned to leverage its R&D capabilities and partnerships to navigate market challenges and capitalize on growth opportunities in the semiconductor equipment sector. The company aims to maintain operational stability while enhancing its competitive edge through innovation and collaboration.

周二 A 股窄幅震荡，假日效应导致市场窄幅波动。周二 A 股小幅低开后进入窄幅震荡，全天波幅 有限，中小市值个股表现相对较好。上证指数距离所谓"对等关税"宣布前的跳空缺口 3319 点仅一步之 遥，市场分歧有所加大，追涨意愿下降，但 A 股的修复行情仍然在延续。临近五一长假，市场担心长 假期间出现突发事件影响节后表现，因此总体表现相对谨慎。从中期角度来看，在中央汇金等三家国资 开始增持，叠加多家上市公司宣布回购增持后，市场已经迎来拐点。尽管所谓"对等关税"的后续影响还 存在一定不确定性，但市场交易开始克服恐慌心理，指数在波折中继续修复行情。 后市展望：关税事件的冲击最高峰已经过去，A 股将在波折中继续修复。4 月 7 日的极端下跌是对 近期所谓"对等关税"事件的一次性反映，随着市场情绪逐渐平稳和以中央汇金为代表的国资以及多家上 市公司宣布回购增持后，目前 A 股已经进入修复性回升。但修复过程并非一帆风顺，美国对全球范围 加征所谓"对等关税"的后续变化对中国和全球经济产生的影响目前仍存在较大不确定性，市场预期变化 也存在反复。后市争议较大的仍然是对海外业务依赖性较高的行业，如消费电子、CXO 等会受到"对等 关 ...