Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown optimistic progress in advanced process equipment, with both gross margin and net profit recovering [1] - In the first half of 2025, the company achieved operating revenue of 1.954 billion yuan, a year-on-year increase of 54.25%, driven by breakthroughs in core technology and increased demand for domestic equipment [4][5] - The gross margin was 31.96%, down 15.09 percentage points year-on-year, primarily due to high costs associated with new products and processes in the first quarter [4] - The net profit attributable to the parent company was 94 million yuan, a year-on-year decrease of 26.96% [4] Financial Performance Summary - In Q2 2025, the company reported revenue of 1.245 billion yuan, a year-on-year increase of 56.64% and a quarter-on-quarter increase of 75.74% [5] - The gross margin for Q2 was 38.82%, an increase of 18.93 percentage points quarter-on-quarter [5] - The net profit attributable to the parent company for Q2 was 241 million yuan, reflecting a significant improvement due to the recovery in gross margin and reduced expense ratios [5] - The company maintains its previous profit forecasts, expecting revenues of 5.8 billion, 7.7 billion, and 9.5 billion yuan for 2025, 2026, and 2027 respectively, with net profits of 970 million, 1.49 billion, and 1.95 billion yuan for the same years [5] Market and Product Development - The company’s advanced process equipment has successfully passed customer certification and is gradually entering large-scale production [6] - The company has optimized its customer structure, consolidating partnerships with leading domestic wafer manufacturers while successfully onboarding new clients, leading to a 52.07% increase in contract liabilities compared to the end of 2024 [6] - The company is expected to benefit from the growing trend of advanced packaging with its 3D integration equipment [6] Financial Projections - The company’s projected operating revenues for 2025, 2026, and 2027 are 5.812 billion, 7.654 billion, and 9.450 billion yuan respectively, with corresponding net profits of 973 million, 1.491 billion, and 1.951 billion yuan [7] - The gross margin is expected to improve to 45.2%, 48.8%, and 48.9% over the next three years [7] - The price-to-earnings ratio (P/E) is projected to decrease from 56.4 in 2025 to 28.1 in 2027 [7]