Group 1 - The A-share market experienced a strong performance in August, with the Shanghai Composite Index rising nearly 8%, the Shenzhen Component Index increasing over 15%, and the ChiNext Index soaring by 24% [3] - The STAR 50 Index was highlighted as the most impressive performer, surging by 28% [1][3] - There was a noticeable shift in capital towards sectors such as technology, new energy, and high-end manufacturing, with the lithium battery sector seeing significant gains, including a more than 10% increase in CATL's stock price [3] Group 2 - Despite the positive market sentiment, caution is advised as sectors like semiconductors and computing have shown signs of adjustment, indicating ongoing market differentiation [3] - The trading volume decreased by 170 billion, suggesting that some investors are beginning to adopt a wait-and-see approach [3] - The current market rally is not solely driven by sentiment; it is supported by improvements in supply and demand in the lithium battery sector and better-than-expected performance from leading companies [3] Group 3 - Investment strategies for September should focus on two main lines: continuing to monitor high-prosperity sectors such as new energy, military, and high-end equipment, while also considering opportunities in semiconductors and computing during market pullbacks [3] - Investors are advised to avoid chasing high prices and instead return to fundamental analysis, as rapid price increases may lead to technical corrections [3]

Investment Rating - The report maintains a "Recommended" investment rating for the company [1][11]. Core Views - The company achieved a revenue of 1.954 billion yuan in the first half of 2025, representing a year-on-year growth of 54.25%, while the net profit attributable to shareholders decreased by 26.96% to 94.288 million yuan [2][6]. - In Q2 2025, the company reported a revenue of 1.245 billion yuan, a year-on-year increase of 56.64%, and a net profit of 241 million yuan, which is a significant year-on-year growth of 103.37% [2][6]. - The improvement in Q2 gross margin to 38.82% reflects a recovery in profitability, following a lower margin of 19.89% in Q1 due to high costs associated with new product validation [6][7]. - The company is successfully optimizing its customer structure and increasing market penetration, with contract liabilities reaching 4.536 billion yuan, up 52.07% from the end of 2024, indicating a solid order backlog [6][7]. Financial Summary - Revenue projections for 2025-2027 are 5.590 billion yuan, 7.050 billion yuan, and 8.868 billion yuan, respectively, with year-on-year growth rates of 36.2%, 26.1%, and 25.8% [5][9]. - Net profit estimates for the same period are 958 million yuan, 1.357 billion yuan, and 1.824 billion yuan, with corresponding growth rates of 39.2%, 41.7%, and 34.5% [5][9]. - The company's gross margin is expected to improve from 44.0% in 2025 to 47.1% by 2027, while the net margin is projected to increase from 17.1% to 20.6% over the same period [5][9]. - The report highlights a strong competitive position in the semiconductor equipment sector, with a focus on advanced deposition and bonding equipment, indicating significant growth potential [7][9].

Event Overview - The company reported its 2025 mid-year results, with a total revenue of 1.409 billion yuan, a year-on-year decrease of 0.62%. In Q2, revenue was 737 million yuan, a slight increase of 0.99% year-on-year, which was below market expectations [1] - Semiconductor revenue was 441 million yuan, down 1.31% year-on-year, attributed to a decline in overseas orders due to geopolitical factors, while domestic demand remained strong [1] - Food segment revenue reached 846 million yuan, up 5.41% year-on-year, driven by a mild recovery in the dairy beverage industry and an increase in market share [1] - Pharmaceutical revenue was 122 million yuan, down 27.53% year-on-year, reflecting a continued industry downturn [1] - The company anticipates a robust order intake for H2 2025, suggesting potential revenue acceleration [1] Profitability Analysis - The company achieved a net profit attributable to shareholders of 108 million yuan, with a net profit margin of 7.67%, down 2.24 percentage points year-on-year [2] - Gross margin for H1 2025 was 24.46%, a decrease of 1.11 percentage points, primarily due to the impact of new factory depreciation in Taiwan and Malaysia [2] - The company’s operating expenses ratio was 15.66%, an increase of 0.93 percentage points year-on-year, with stable expense ratios across various categories [2] - A reduction in government subsidies led to a decrease in non-operating income by 6.48 million yuan, further impacting profit performance [2] Industry Positioning - The company is a leading domestic supplier of semiconductor gas/liquid systems, supplying major global players and driving domestic substitution [3] - The establishment of a joint venture in 2024 aims to penetrate the liquid cooling market, addressing critical issues such as sealing performance [3] - The liquid cooling segment is expected to experience significant growth due to increasing temperature control demands from high-performance chips, with the company positioned as a comprehensive supplier [3] Investment Outlook - Revenue forecasts for 2025-2027 have been adjusted to 3.049 billion, 3.579 billion, and 4.367 billion yuan, reflecting year-on-year growth rates of 7%, 17%, and 22% respectively [4] - Net profit forecasts for the same period are 252 million, 323 million, and 427 million yuan, with corresponding year-on-year growth rates of 11%, 28%, and 32% [4] - The company’s stock price of 39.73 yuan corresponds to a PE ratio of 64, 50, and 38 for the years 2025, 2026, and 2027, respectively, indicating a positive outlook for future earnings growth [4]

Core Viewpoint - The A-share market has seen significant positive developments since August, with total trading volume exceeding 2 trillion yuan and the Shanghai Composite Index surpassing 100 trillion yuan in total market capitalization for the first time, indicating a strong market recovery and investor enthusiasm [1][2]. Market Trends - The A-share market is characterized by increasing structural differentiation and rapid style rotation, making it challenging to accurately identify the main investment themes. Various sectors such as AI, semiconductors, and innovative pharmaceuticals have emerged as focal points, while defensive assets with high dividends and low valuations have also gained traction amid uncertain economic recovery expectations [2][3]. - Historical data shows that during initial phases of market rallies, industry rotation occurs rapidly, complicating the ability to capture main themes effectively. This has been evident in previous market cycles, where significant fluctuations in industry rotation indices were observed [3]. Investment Strategy - A suggested approach for investors is to focus on broad-based ETFs, which can simplify market dynamics and reduce decision-making complexity. These ETFs allow investors to capture market trends without being overly influenced by the rapid shifts in specific sectors [5][6]. - Broad-based indices tend to have a more stable performance due to their diversified nature, which can mitigate risks associated with individual sector volatility. For instance, the CSI 300 Index has shown a maximum drawdown of only -15.67% since the market recovery began, compared to over -16% for many individual sectors [6]. ETF Options - The market offers a variety of broad-based indices, such as the CSI 300 Index and the CSI A500 Index, which provide extensive coverage of core A-share assets. These indices are suitable for long-term investment strategies [7][8]. - The CSI A500 Index emphasizes the importance of industry leaders and includes a significant proportion of new economy sectors, making it a compelling option for investors looking to benefit from China's economic transformation [10]. - The STAR Market ETF focuses heavily on the semiconductor industry, reflecting the growing importance of this sector in the current market landscape [11]. Conclusion - The current A-share market presents a range of investment opportunities, particularly through broad-based ETFs that can help investors navigate the complexities of market dynamics while capturing overall market performance. Investors are encouraged to select ETFs that align with their risk preferences and investment goals [12][13].

Investment Rating - The report maintains a "Buy" rating for the mechanical industry [1] Core Viewpoints - The humanoid robot sector is experiencing significant advancements, with companies like Unitree and Zhiwei Robotics making strides in product development and partnerships, indicating a robust growth trajectory for the industry [4][5][6] - The liquid cooling technology is becoming increasingly essential due to the rising power consumption of data center servers, with a projected increase in adoption as standards are established and high-power chips become more common [7][8] - The engineering machinery sector is expected to benefit from increased infrastructure investment, particularly with major projects like the Yarlung Zangbo River hydropower project, which will drive demand for machinery [13][14] Summary by Relevant Sections Humanoid Robots - Unitree Technology announced a new humanoid robot with enhanced flexibility, featuring 31 joints, a 19% increase from its previous model [4] - The humanoid robot industry is poised for a breakthrough in 2025, with mass production expected to address data scarcity issues and enhance practical applications [6] Liquid Cooling - The establishment of national standards for immersion liquid cooling power supplies is underway, which will guide the design and application of liquid cooling systems in data centers [7] - The shift towards liquid cooling is driven by the limitations of traditional air cooling systems in managing the heat generated by high-power chips [8] Engineering Machinery - The engineering machinery sector is witnessing a recovery in domestic sales, with excavator sales in July 2025 showing a year-on-year increase of 25.2% [14] - Major infrastructure projects, such as the Yarlung Zangbo River hydropower project, are expected to significantly boost demand for engineering machinery [13] Forklifts - Forklift sales have shown strong growth, with a total of 118,605 units sold in July 2025, reflecting a 14.4% year-on-year increase [15] - The rise of autonomous forklifts is anticipated to further enhance market growth, with a projected 39.3% increase in sales by 2025 [15] Rail Transit Equipment - The rail transit equipment sector is benefiting from increased investment in railway infrastructure, with significant growth in orders for high-speed train maintenance [16] Semiconductor Equipment - The push for domestic semiconductor equipment manufacturing is accelerating due to geopolitical tensions and trade restrictions, with a focus on critical equipment like photolithography machines [17][18] New Energy Equipment - The solid-state battery sector is expected to see rapid growth, with new equipment needs arising from the transition to solid-state production lines [21] - The market for photovoltaic equipment is also anticipated to recover as competition stabilizes and prices begin to rise [21]

Group 1: Market Performance - The Shanghai Stock Exchange Sci-Tech Innovation Board semiconductor materials and equipment theme index decreased by 0.42% as of August 26, 2025 [1] - Among constituent stocks, Anji Technology led with a rise of 3.32%, while Jingyi Equipment fell by 5.01% [1] - The Sci-Tech Semiconductor ETF dropped by 0.99%, with a latest price of 1.2 yuan, but saw a cumulative increase of 7.80% over the past week [1] Group 2: Company Financials - Tuojing Technology reported a revenue of 1.954 billion yuan for the first half of 2025, marking a year-on-year increase of 54.25% [2] - The net profit attributable to shareholders was 94 million yuan, a decline of 26.96% year-on-year, while the net profit after deducting non-recurring items was 38 million yuan, reflecting a growth of 91.35% [2] - The company attributed revenue growth to enhanced product competitiveness and successful customer certifications for advanced process equipment [2] Group 3: Industry Insights - The semiconductor equipment sector is considered the cornerstone of the semiconductor industry chain, with potential for significant performance growth driven by AI trends and domestic equipment localization demands [2] - The industry exhibits a strong Matthew effect, suggesting that leading companies will continue to grow, while opportunities exist in lower localization rate segments [2] - Key benefiting segments include semiconductor front-end and back-end equipment, as well as equipment component manufacturers [2][3] Group 4: ETF Information - The Sci-Tech Semiconductor ETF (588170) tracks the semiconductor materials and equipment theme index, focusing on semiconductor equipment (59%) and materials (25%) [3] - The semiconductor materials ETF (562590) also emphasizes the importance of domestic substitution in the semiconductor sector, benefiting from the expansion of semiconductor demand driven by AI [3]

Core Viewpoint - The report highlights the financial performance and operational developments of Piotech Inc. for the first half of 2025, indicating significant growth in revenue despite a decline in net profit due to high costs associated with new product validations. Financial Performance - The company's revenue for the first half of 2025 reached approximately 1.95 billion RMB, representing a year-on-year increase of 54.25% compared to 1.27 billion RMB in the same period last year [5]. - Total profit for the period was approximately 81.54 million RMB, down 31.55% from 119.12 million RMB in the previous year [5]. - The net profit attributable to shareholders was approximately 94.29 million RMB, a decrease of 26.96% from 129.09 million RMB year-on-year [5]. - The net cash flow from operating activities was approximately 1.57 billion RMB, showing a significant improvement compared to a negative cash flow of approximately 899.81 million RMB in the previous year [5]. Market and Industry Context - The semiconductor industry is a crucial driver of technological innovation and economic development, with the integrated circuit sector being a key component [7]. - The global semiconductor equipment market is projected to reach 125.5 billion USD in 2025, with a growth rate exceeding 7% [7]. - China is the largest consumer electronics market, with semiconductor equipment sales expected to reach 49.6 billion USD in 2024, marking a 35% increase year-on-year [8]. Company Operations and Developments - Piotech focuses on high-end semiconductor equipment, particularly in the fields of thin film deposition and advanced bonding equipment for 3D integration [9]. - The company has developed a range of advanced equipment, including PECVD, ALD, SACVD, and HDPCVD, which are widely used in the manufacturing of integrated circuit logic and memory chips [9]. - The company has successfully entered the high-end semiconductor equipment market, launching advanced bonding equipment and associated detection devices for 3D integration applications [10].

Financial Performance - The company achieved operating revenue of 579,895.11 million yuan in the first half of 2025, with a decline in revenue and profit from photovoltaic equipment and materials due to cyclical adjustments in the industry [2] - The semiconductor business continued to grow, with unfulfilled contracts for integrated circuits and compound semiconductor equipment exceeding 3.7 billion yuan as of June 30, 2025 [2] Semiconductor Equipment Development - The company successfully delivered 12-inch atmospheric silicon epitaxy equipment to leading domestic customers, achieving international advanced levels in key performance indicators [3] - New products such as the 12-inch dry-in-dry-out edge grinding machine and 12-inch double-sided thinning machine are undergoing customer validation [3] Silicon Carbide Substrate Progress - The company made significant breakthroughs in the growth of 12-inch conductive silicon carbide crystals, addressing core challenges in temperature uniformity and crystal cracking [4] - The company is expanding its global customer verification for 8-inch silicon carbide substrates and has received bulk orders from international clients [4] Semiconductor Components and Materials - The subsidiary, Jinghong Precision, is enhancing its manufacturing capabilities for core components, focusing on precision processing and special welding [5] - The company has achieved domestic substitution for semiconductor quartz crucibles, leading the market share and overcoming technical bottlenecks for large-sized crucibles [5] Sapphire Business Growth - The sapphire material business experienced year-on-year growth driven by new applications in LED and consumer electronics sectors [5] Customer Base and Risk Management - The company has established a strong reputation among high-end clients in the semiconductor and photovoltaic industries, with long-term strategic partnerships [6] - To mitigate order fulfillment risks, the company focuses on large, financially stable clients and implements strict credit management and contract practices [6]

Report Industry Investment Rating There is no information about the report industry investment rating in the content. Core Viewpoints - Last week, the equity market continued to rise, with the Shanghai Composite Index hitting a ten - year high and breaking through 3800 points. The semiconductor and computing power domestic substitution logic was strengthened, and the technology sector performed well. The bond market generally declined due to the stock - bond seesaw effect, tightened capital at the tax period, and weakened expectations of total easing policies in the second half of the year. The 10 - year treasury bond rate closed at 1.78% on Friday, up 3.53bp from the previous week. The convertible bond market showed a strong performance, with most convertible bond issues rising. The CSI Convertible Bond Index rose 2.83% for the whole week [1][7][8]. - In the future, the short - term popularity of the stock market is expected to remain high. With the dovish speech of the Federal Reserve Chairman at the Jackson Hole meeting, it is recommended to increase the consideration of performance and layout along the directions with strong industrial trend certainty such as computing power, robotics, intelligent driving, and semiconductor self - controllability. Attention can also be paid to the clause game opportunities of convertible bonds with short remaining terms and strong debt - reduction demands [3][15]. Summary According to Relevant Catalogs 1. Market Focus (2025/8/18 - 2025/8/22) Stock Market - The equity market continued to rise last week. The Shanghai Composite Index reached a ten - year high and broke through 3800 points. The semiconductor and computing power domestic substitution logic was strengthened by news such as DeepSeek updating its model to DeepSeek - V3.1, NVIDIA suspending the production of H20 chips, and the 2025 China Computing Power Conference being held in Datong. The technology sector performed well throughout the week [1][7]. - By industry, all Shenwan primary industries closed up last week. Communications (+10.84%), electronics (+8.95%), comprehensive (+8.25%), computer (+7.93%), and beauty care (+5.35%) led the gains, while real estate (+0.50%), coal (+0.92%), pharmaceutical biology (+1.05%), and banks (+1.25%) lagged behind [8]. Bond Market - The bond market generally declined last week. The stock - bond seesaw effect was obvious due to the sharp rise in the equity market. The capital at the tax period tightened marginally, and the central bank's second - quarter monetary policy implementation report weakened the market's expectation of total easing policies in the second half of the year. The 10 - year treasury bond rate closed at 1.78% on Friday, up 3.53bp from the previous week [1][8]. Convertible Bond Market - Most convertible bond issues rose last week. The CSI Convertible Bond Index rose 2.83% for the whole week, the median price rose 2.82%, the calculated arithmetic average parity rose 2.24% for the whole week, and the market conversion premium rate increased by 2.07% compared with the previous week. The arithmetic average conversion premium rates of convertible bonds with parities in [90,100), [100,110), and [110,120) changed by +2.44%, +3.20%, and +1.10%, respectively, and were at the 99%, 100%, and 97% quantiles since 2023 [2][8]. - By industry, most convertible bond industries closed up last week. Beauty care (+7.29%), computer (+5.26%), electronics (+4.54%), and petroleum and petrochemicals (+4.30%) performed well, while media (-0.32%), household appliances (+0.05%), building decoration (+0.66%), and social services (+0.84%) lagged behind [10]. - At the individual bond level, convertible bonds such as Jintong (liquid - cooled server concept), Huayi (semiconductor clean room), Weice (IC testing), Dongjie (control right change), and Shuiyang (skin care products & significant increase in mid - year report performance) led the gains. Convertible bonds such as Linuo (medical glass), Rongtai (massage equipment & announced forced redemption), Sheyan (engineering design and survey & announced forced redemption), Weixin (innovative drugs), and Youzu (game concept & announced forced redemption) led the losses [2][11]. - The total trading volume of the convertible bond market last week was 470.3 billion yuan, with an average daily trading volume of 94.06 billion yuan, basically the same as the previous week [13]. 2. Valuation - As of last Friday (2025/08/22), in the equity - biased convertible bonds, the average conversion premium rates of convertible bonds with parities in the ranges of 80 - 90 yuan, 90 - 100 yuan, 100 - 110 yuan, 110 - 120 yuan, 120 - 130 yuan, and above 130 yuan were 48.87%, 36.41%, 28.98%, 22.02%, 14.46%, and 11.73%, respectively, at the 99%/100%, 96%/99%, 96%/99%, 95%/98%, 89%/87%, 95%/93% quantiles since 2010/2021. - In the bond - biased convertible bonds, the average YTM of convertible bonds with parities below 70 yuan was - 6.12%, at the 0%/0% quantiles since 2010/2021. - The average implied volatility of all convertible bonds was 43.97%, at the 89%/94% quantiles since 2010/2021. The difference between the convertible bond implied volatility and the long - term actual volatility of the underlying stock was - 3.29%, at the 64%/64% quantiles since 2010/2021 [16]. 3. Primary Market Tracking - Last week (2025/8/18 - 2025/8/22), Jinwei Convertible Bond was issued, and no convertible bonds were listed. Jinwei Convertible Bond has a scale of 1.292 billion yuan, a credit rating of AA, and its underlying stock is Jindawen, a company in the food and beverage industry. After deducting the issuance fees, the funds are planned to be invested in projects such as the coenzyme Q10 reconstruction and expansion project [24]. - In the coming week (2025/8/25 - 2025/8/29), no convertible bonds are announced for issuance, and Weidao Convertible Bond is expected to be listed. Weidao Convertible Bond has a scale of 1.17 billion yuan, a credit rating of AA, and its underlying stock is Weidao Nano, a company in the power equipment industry. After deducting the issuance fees, the funds are planned to be invested in projects such as the intelligent factory construction project for semiconductor thin - film deposition equipment [25]. - Last week, the exchanges accepted applications from JINPAN TECHNOLOGY and UNIRAY NEW MATERIAL, the general meetings of shareholders passed the plans of JINGYAN TECHNOLOGY and AOKE TECHNOLOGY, and the board of directors proposed plans for LONGHUA NEW MATERIAL, TBEA, SHENGQUAN GROUP, JIWU HIGH - TECH, and JINSANJIANG. There were no new companies approved for registration by the exchanges or passed by the listing committee. As of now, there are 77 convertible bonds to be issued, with a total scale of 128.34 billion yuan, including 2 issues with a total scale of 1.45 billion yuan that have been approved for registration and 4 issues with a total scale of 8.98 billion yuan that have passed the listing committee [26].

Group 1 - The core viewpoint is that there is a significant inflow of funds into semiconductor equipment assets, with a net inflow of 9 million units into the semiconductor equipment ETF (159516) [1] - Longjiang Securities indicates that the domestic substitution rate for semiconductor equipment and materials remains low, with projected revenue from listed semiconductor equipment companies accounting for 22.4% of semiconductor equipment sales (excluding imported lithography machines) in 2024, while materials will account for 30.7% [1] - The semiconductor equipment ETF (159516) tracks the semiconductor materials and equipment index (931743), which includes listed companies involved in the manufacturing of semiconductor materials and equipment, reflecting the level of domestic self-sufficiency in core materials and equipment [1] Group 2 - As of August 22, 2025, the scale of the semiconductor equipment ETF is 3.335 billion, ranking first among six similar products [2]