Industry Perspective - Semiconductor equipment is the cornerstone of the semiconductor industry, with significant growth potential driven by storage expansion and domestic substitution [1] - According to SEMI, the semiconductor equipment market will maintain a 33.2% share as the largest single market globally in the first half of 2025, with leading domestic companies showing impressive performance [1] - The combined revenue of eight leading domestic companies is expected to grow by 37.3% year-on-year, while net profit attributable to shareholders is projected to increase by 23.9% in the first three quarters of 2025 [1] Investment Logic - The global semiconductor market has entered a strong recovery cycle, with the market expected to grow by 18.9% year-on-year in the first half of 2025 and 15.4% for the entire year [2] - AI technology is driving a surge in storage demand, with significant supply-demand gaps pushing prices higher; NAND and DRAM prices are expected to rise by 5-10% and 13-18%, respectively, by Q4 2025 [2] Domestic Storage Leaders - Domestic storage companies are accelerating capacity expansion, with Longxin Storage starting its IPO process and Jiangsu Changjiang Storage's third-phase project being officially established [3] - The introduction of 3D DRAM technology and advancements in NAND stacking are expected to significantly increase the market for etching and thin-film deposition equipment, with projected growth of 1.7 times and 1.8 times, respectively [3] Investment Recommendations - 2025 is anticipated to be a significant year for order growth and performance realization in the domestic semiconductor equipment sector [4] - Key beneficiaries include companies like Zhongwei Company, which is expected to benefit from storage expansion and 3D technology iterations [4] - Other recommended companies include North Huachuang, which has a broad product line, and Huahai Qingke, Zhongke Feice, and Jingce Electronics, which are rapidly increasing their domestic market share in specific segments [4]

Group 1: Semiconductor Business Growth - The semiconductor business is experiencing robust growth due to the continuous expansion of domestic memory chip production capacity and the increase in localization rates of equipment in logic and advanced packaging sectors [1] - In the first three quarters of 2025, new orders in the semiconductor sector reached approximately 1.483 billion yuan, a year-on-year increase of 97.26%, with over 80% coming from leading customers in NAND and DRAM memory chips [1] - Revenue from semiconductor equipment in Q3 2025 was approximately 333 million yuan, representing a year-on-year growth of 132.66%, while cumulative revenue for the first three quarters of 2025 was about 526 million yuan, up 78.27% year-on-year [1] Group 2: Investment in Technology and Capacity - The company successfully issued 1.1 billion yuan in convertible bonds, with 643 million yuan allocated for the construction of an intelligent factory for semiconductor thin film deposition equipment, which will significantly enhance production capacity [1] - An additional 227 million yuan is designated for the expansion of R&D laboratories to ensure rapid conversion of cutting-edge technologies into marketable and stable products, aiming for seamless integration from "technology leadership" to "market leadership" [1] Group 3: Advancements in Storage Technology - The transition to 3D architecture in memory chips has led to increased complexity in device structures, making traditional deposition processes inadequate for uniform thin film deposition [2] - ALD technology has become essential for manufacturing 3D NAND and 3D DRAM due to its superior three-dimensional coverage and atomic-level film thickness control, with demand for this technology continuing to rise [2] - The CVD hard mask process, particularly for amorphous carbon deposition, is critical for achieving high-density integration in memory chips, ensuring design integrity during etching processes [2] Group 4: Breakthroughs in Logic Chips and Advanced Packaging - The company has made significant breakthroughs in the logic chip sector, collaborating with major domestic manufacturers and achieving international advanced levels in key performance indicators [3] - The demand for high-end domestic thin film deposition equipment in the logic chip market is expected to grow, supporting ongoing business growth [3] - In the advanced packaging sector, the company’s products utilize unique low-temperature control technology to meet the demands for low thermal budget and high-quality thin films, with ongoing validation and technical exchanges with potential clients [3] Group 5: Revenue and Profit Forecast - The company is projected to achieve revenues of 2.6 billion yuan, 3.1 billion yuan, and 3.6 billion yuan in 2025, 2026, and 2027 respectively, with net profits attributable to the parent company expected to be 300 million yuan, 430 million yuan, and 560 million yuan for the same years [4]

Core Viewpoint - Beijing Junzheng Integrated Circuit Co., Ltd. has submitted an IPO application to the Hong Kong Stock Exchange, focusing on a fabless model in the semiconductor industry, with a strategic emphasis on "computing + storage + analog" across high-growth markets such as automotive electronics, industrial medical, AIoT, and smart security [1][2]. Group 1: Company Overview - Founded in 2005 by Liu Qiang, Beijing Junzheng initially focused on embedded CPU development and has since evolved to become a leader in the automotive storage chip sector following a significant acquisition in 2020 [8][14][15]. - The company was listed on the Shenzhen Stock Exchange in 2011, becoming the first publicly traded company in the embedded CPU chip sector in China, with a current market capitalization of 39.679 billion [7][10]. Group 2: Product Lines - The core product lines include: - **Computing Chips**: These are the brain of devices, including self-developed CPUs and NPUs for AI tasks, used in smart security cameras and robotic devices [3][19]. - **Storage Chips**: Responsible for data storage and retrieval, focusing on high-quality DRAM, SRAM, and Flash chips for harsh environments like automotive and industrial applications [4][21]. - **Analog Chips**: These serve as the bridge between the digital and physical worlds, including LED drivers and combo chips for automotive and smart home applications [5][23]. Group 3: Market Position and Financial Performance - The company has seen significant revenue growth, with a notable increase from 340 million to 2.17 billion in revenue from 2019 to 2020, marking a 538% increase [16]. - Despite a decline in overall revenue from 54.1 billion in 2022 to 45.3 billion in 2023, the computing chip segment experienced a 43.9% growth, indicating resilience in the face of market challenges [26]. Group 4: Future Opportunities - The company identifies three major opportunities in the semiconductor industry: 1. **End-Device AI Explosion**: The market for AI devices is expected to grow from 24.8 million units in 2020 to 311 million units by 2024, with a CAGR of 88.1% [31]. 2. **Storage Revolution**: The shift from 2D to 3D storage technology is anticipated to drive significant market growth, with 3D DRAM expected to rise from $30-40 million in 2024 to over $700 million by 2029 [34]. 3. **Rise of RISC-V Architecture**: The open-source RISC-V architecture is set to lower design costs and enhance customization, providing strategic advantages for companies like Beijing Junzheng [36][39].