Summary of the Conference Call for ShenGong Co., Ltd. Industry Overview - The semiconductor industry is experiencing a significant cycle driven by the surge in demand for storage chips, particularly due to AI server requirements. This trend favors companies like ShenGong Co., Ltd., which specializes in semiconductor materials [2][5]. Company Insights - ShenGong Co., Ltd. is a supplier of single crystal silicon materials for integrated circuit etching, holding a 15% market share globally, and is recognized as an "invisible champion" in the industry [4]. - The company's main products include large-size single crystal silicon materials and etching electrodes, which are essential consumables in the chip manufacturing process [4]. Key Points and Arguments - The demand for etching electrodes is significantly higher for storage chips compared to logic chips due to the increased number of layers in storage chips, leading to more etching processes [5]. - Major global storage chip manufacturers, such as SK Hynix, Samsung, and Micron, are operating at high utilization rates but have not significantly expanded production. This has resulted in a supply-demand mismatch, creating opportunities for ShenGong Co., Ltd. [2][5]. - The geopolitical landscape and supply chain security considerations may lead Japanese and Korean storage manufacturers to prioritize local suppliers. However, as market conditions improve, local suppliers may face capacity shortages, resulting in overflow orders that could benefit ShenGong Co., Ltd. [2][6][7]. Future Outlook - Key indicators to monitor for assessing ShenGong Co., Ltd.'s development prospects include: 1. The rhythm of storage demand, including price increases, upgrades, and volume growth. 2. The status of overseas order fulfillment. 3. The company's own capacity expansion progress [8]. - The company is projected to achieve revenues of 470 million, 800 million, and 1.31 billion yuan from 2025 to 2027, with corresponding net profits of 110 million, 270 million, and 450 million yuan. The estimated valuations are 78x, 32x, and 19x respectively, leading to a "buy" rating based on hypothetical models that will be adjusted according to actual conditions [9]. Risks to Consider - Key risks associated with investing in ShenGong Co., Ltd. include: 1. Policy outcomes not meeting expectations. 2. Downstream demand falling short of projections. 3. Delays in product development and introduction [3][10].

Core Viewpoint - The company is a leading supplier of single crystal silicon materials for integrated circuit etching, holding a global market share of approximately 15%. It is expected to benefit from the overall supply chain improvement driven by the storage industry's growth cycle, leading to potential earnings growth exceeding expectations [1]. Demand Side Analysis - The demand for large-sized single crystal silicon materials used in etching electrodes is applicable to logic chip etching. If the semiconductor cycle does not recover, the company's growth may be adversely affected [2]. - Rapid growth in AI server demand and the quick iteration of AI chips necessitate corresponding increases in storage throughput. The importance of storage chips in AI training and inference is growing, which significantly boosts the company's core business [3]. Supply Side Analysis - There is a continuous tight demand for orders from overseas storage manufacturers, creating challenges for the supply of large-sized single crystal silicon materials and etching electrodes. Domestic material manufacturers may have the opportunity to take on some overflow orders [3]. - Local Japanese and Korean enterprises have reached their supply limits, increasing the company's earnings elasticity due to overflow orders [5]. Catalysts and Indicators - Key indicators include the rhythm of storage demand and discrepancies between actual performance and guidance [6]. - Catalysts for growth include additional overseas orders and the company's capacity expansion [7]. Research Value - In the context of significant demand for AI computing power driving the storage industry, the market has overlooked the upstream segment of the storage supply chain. The manufacturing of storage chips requires multiple etching processes, necessitating large amounts of single crystal silicon materials and etching electrodes. The company is a global leader in this field, with a market share of about 15%, and is expected to benefit significantly from the growth cycle in storage [8]. Profit Forecast and Valuation - Considering the company's leading position in silicon materials and the downstream storage sector's benefits from computing power development, revenue projections for the company from 2025 to 2027 are estimated at 470 million, 800 million, and 1.31 billion yuan, representing year-on-year growth of 55.6%, 70.5%, and 62.8%. Net profits attributable to the parent company are expected to be 110 million, 270 million, and 450 million yuan, with year-on-year growth of 168.9%, 141.7%, and 68.6%. Based on the closing price on November 7, 2025, the PE ratios are projected to be 78.5, 32.5, and 19.3 times, maintaining a "buy" rating [9].