Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative performance increase of over 15% compared to the benchmark index within the next 6 to 12 months [4][23]. Core Views - The company has shown strong potential in the semiconductor materials sector, with a significant increase in market share anticipated due to domestic substitution trends [7][8]. - The report slightly lowers the profit forecast for 2025-2027, reflecting pressures in the photovoltaic sand market, but maintains a positive outlook on the semiconductor materials business [8][6]. Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of 510 million yuan, a year-on-year decrease of 30.1%, and a net profit attributable to shareholders of 110 million yuan, down 58.4% year-on-year [6]. - For Q2 2025, the company reported revenue of 260 million yuan, a decrease of 24.0% year-on-year, but a slight increase of 2.8% quarter-on-quarter [6]. Semiconductor Materials Outlook - The company is expected to enhance its market share in semiconductor quartz glass materials, having received certifications from major international equipment manufacturers [8]. - The domestic production of semiconductor sand is anticipated to accelerate, with the company already achieving certifications for its self-produced sand from several international semiconductor equipment vendors [8]. Photovoltaic Sector Challenges - The high-purity quartz sand segment faced a revenue drop of 59.20% year-on-year in H1 2025, primarily due to weak demand from the photovoltaic sector [8]. - The report suggests that as inventory depletion in downstream sectors concludes, the actual demand for high-purity quartz sand is expected to gradually recover [8]. Profit Forecast and Valuation - The revised profit forecasts for 2025, 2026, and 2027 are 300 million yuan, 450 million yuan, and 620 million yuan, respectively, reflecting adjustments in sales volume and price assumptions for photovoltaic quartz sand [8]. - The current price-to-earnings (P/E) ratio is projected at 72.1, 48.1, and 34.9 for the years 2025, 2026, and 2027, respectively, while the price-to-book (P/B) ratio is expected to be 3.7, 3.5, and 3.2 [8].

Summary of Quartz Co. Conference Call Company and Industry Overview - The conference call focuses on Quartz Co., which operates in the semiconductor quartz sand and quartz glass materials industry [2][4] - The global demand for semiconductor-grade quartz sand is approximately 30,000 tons, valued between 3 billion to 4.5 billion RMB [2][6] - Quartz Co. has been certified by major overseas equipment manufacturers, positioning itself as one of the few qualified suppliers globally [2][8] Key Insights and Arguments - The semiconductor quartz materials market is expected to grow at a compound annual growth rate (CAGR) of 10% from 2025 to 2030, potentially reaching a market size of 24 billion RMB by 2030 [2][10] - Quartz Co. aims to increase its market share to 20%, with long-term profit potential estimated at 1.6 billion RMB, corresponding to a market capitalization of approximately 30 billion RMB [2][11] - For 2025, the revenue from semiconductor quartz glass materials is projected to be between 500 million to 600 million RMB, with a net profit margin of 35% to 40%, resulting in an estimated profit of around 200 million RMB [2][11] Competitive Landscape - In the high-temperature diffusion segment, Quartz Co. competes with major players like Mattson and Heraeus, while in the low-temperature etching segment, it competes with six other companies including Mattson and Heraeus [2][4][9] - Currently, only three companies can supply verified semiconductor-grade quartz sand, including Quartz Co., which has recently gained certification [8][9] Market Dynamics - The global market for semiconductor-grade quartz sand is approximately 30 billion to 45 billion RMB, with prices ranging from 100,000 to 150,000 RMB per ton [6][12] - The market for photovoltaic-grade high-purity quartz sand is around 70,000 to 80,000 tons, with Quartz Co. facing challenges due to reduced demand and increased competition [5][14] - The company expects to recover sales in the photovoltaic segment, projecting sales of 30,000 to 40,000 tons by 2030, with profits estimated between 300 million to 600 million RMB [5][14] Future Growth Expectations - The semiconductor quartz sand market is anticipated to grow to 40,000 tons by 2030, with Quartz Co. expected to capture 35% to 40% of this market, translating to revenues of 1.5 billion RMB and net profits of 750 million RMB [3][13] - The company is positioned to fill gaps in the domestic semiconductor supply chain, especially as domestic high-purity silicon sand still relies on imports [18] Additional Considerations - Quartz Co. is involved in multiple business areas, including electric light sources, optical fibers, and optics, which may contribute to its overall valuation [15] - The relationship between Yaoshi Technology and Quartz Co. is noted, as both companies may have synergistic effects in certain business areas [17] - The company’s strong product competitiveness and favorable competitive landscape make it a potential long-term investment opportunity [19]