Investment Rating - The investment rating for the company is "Buy" and it is maintained [8]. Core Views - The company reported a revenue of 1.275 billion yuan in Q3 2025, a year-on-year decrease of 22.68%. The net profit attributable to the parent company was -23 million yuan, down 110.12% year-on-year, and the non-recurring net profit was -37 million yuan, a decrease of 119.23% year-on-year. The gross margin was 18.03%, down 9.44 percentage points year-on-year [2][6]. - For the first three quarters of 2025, the company achieved a revenue of 3.292 billion yuan, a year-on-year decrease of 5.98%. The net profit attributable to the parent company was 71 million yuan, down 78.50% year-on-year, and the non-recurring net profit was 21 million yuan, a decrease of 93.11% year-on-year. The gross margin was 21.51%, down 5.66 percentage points year-on-year [2][6]. - The company is focusing on the semiconductor sector, with revenue from this area increasing from 50% in 2024 to 57% in the first half of 2025. Global capital expenditure (Capex) in the semiconductor industry is expected to grow significantly, with a forecasted increase of 7% in 2025, reaching 107 billion USD [11][12]. - The company has a robust order backlog, and its Capex business is expected to maintain steady growth. The Opex business is anticipated to open up new growth opportunities, contributing to revenue expansion and improved profitability [11][12]. Summary by Sections Financial Performance - In Q3 2025, the company reported a revenue of 1.275 billion yuan, a decrease of 22.68% year-on-year. The net profit was -23 million yuan, down 110.12% year-on-year, and the gross margin was 18.03%, down 9.44 percentage points [2][6]. - For the first three quarters of 2025, the total revenue was 3.292 billion yuan, a decrease of 5.98% year-on-year, with a net profit of 71 million yuan, down 78.50% year-on-year [2][6]. Market Outlook - The semiconductor industry is experiencing strong demand, with Capex and Opex expected to grow significantly in the coming years. The global semiconductor materials market is projected to reach approximately 70 billion USD in 2025, with a compound annual growth rate of 4.5% [11][12]. - The company is strategically expanding its Opex business, which is expected to increase its revenue share and enhance overall profitability [11][12]. Future Projections - The company is projected to achieve revenues of 6.68 billion yuan, 8.39 billion yuan, and 10.16 billion yuan from 2025 to 2027, with net profits of 470 million yuan, 720 million yuan, and 940 million yuan respectively. The corresponding price-to-earnings ratios are expected to be 21x, 13x, and 10x [11][12].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 69.5, unchanged from previous assessments [2][10]. Core Insights - The company completed a placement of HKD 120 million on May 21, at a price of HKD 40 per share, to enhance upstream manufacturing capabilities and support general working capital [1][10]. - Revenue growth is projected to be between 27% and 33% from 2025 to 2027, with a gross margin expected to remain between 53% and 54% [2][10]. - The company’s stock price increased by 6.6% to HKD 47.6 as of May 21 [1]. Financial Summary - **Revenue Forecast**: - FY23A: RMB 464 million - FY24A: RMB 579 million - FY25E: RMB 770 million (33% YoY growth) - FY26E: RMB 1,006 million (30.8% YoY growth) - FY27E: RMB 1,284 million (27.6% YoY growth) [3][14] - **Gross Margin**: - FY23A: 55.4% - FY24A: 53.0% - FY25E: 53.8% - FY26E: 53.5% - FY27E: 53.3% [3][14] - **Net Profit Forecast**: - FY23A: RMB 109.2 million - FY24A: RMB 166.6 million - FY25E: RMB 216.7 million (30.1% YoY growth) - FY26E: RMB 285.1 million (31.5% YoY growth) - FY27E: RMB 363.3 million (27.4% YoY growth) [3][14] - **Earnings Per Share (EPS)**: - FY23A: RMB 2.42 - FY24A: RMB 2.78 - FY25E: RMB 3.61 - FY26E: RMB 4.75 - FY27E: RMB 6.05 [3][14] - **Valuation Metrics**: - FY25E P/E ratio: 12.9x - FY26E P/E ratio: 9.8x [10][12] Shareholder Structure - Major shareholders include Li Zhen with 53.5% and Zhang Guangping with 39.5% [6]. Market Performance - The company's market capitalization is approximately HKD 3,042 million, with a 52-week high of HKD 51.75 and a low of HKD 23.05 [5]. - The stock has shown significant performance, with a 59.4% return over the past three months [7].