Core Viewpoint - Longtu Guangzhao's stock price increased by 3.85% on September 11, with a trading volume of 96.67 million yuan, indicating positive market sentiment towards the company [1] Financing Summary - On September 11, Longtu Guangzhao had a financing buy-in amount of 10.16 million yuan and a financing repayment of 13.40 million yuan, resulting in a net financing buy of -3.24 million yuan [1] - As of September 11, the total financing and securities lending balance for Longtu Guangzhao was 179 million yuan, which accounts for 10.40% of its circulating market value, indicating a high level of financing activity compared to the past year [1] - The company had no securities lending activity on September 11, with both securities lent and remaining at zero, also reflecting a high level compared to the past year [1] Company Overview - Longtu Guangzhao, established on April 19, 2010, is located in the Saint George Technology Industrial Park in Bao'an District, Shenzhen, Guangdong Province [1] - The company specializes in the research, production, and sales of semiconductor mask plates, with its main business revenue composition being 82% from quartz mask plates and 18% from soda mask plates [1] Financial Performance - For the first half of 2025, Longtu Guangzhao reported an operating income of 116 million yuan, a year-on-year decrease of 6.44%, and a net profit attributable to shareholders of 35.06 million yuan, down 28.93% year-on-year [2] - As of June 30, 2025, the number of shareholders for Longtu Guangzhao was 8,082, a decrease of 1.86% from the previous period, while the average circulating shares per person increased by 1.89% to 3,303 shares [2] - The company has distributed a total of 53.40 million yuan in dividends since its A-share listing [2] Institutional Holdings - As of June 30, 2025, the top ten circulating shareholders of Longtu Guangzhao saw the exit of the Noan Optimized Allocation Mixed A fund (006025) from the list [2]

Group 1 - The core viewpoint of the news highlights the trading performance and financial metrics of Longtu Guangzhao, indicating a significant increase in stock price and trading volume on August 22, with a closing price increase of 3.94% and a transaction amount of 278 million yuan [1] - As of August 22, the financing balance of Longtu Guangzhao reached 191 million yuan, accounting for 9.86% of its market capitalization, which is above the 90th percentile level over the past year, indicating a high level of financing activity [1] - The company specializes in the research, production, and sales of semiconductor mask plates, with its main revenue sources being quartz mask plates (81.31%) and soda mask plates (18.69%) [1] Group 2 - As of March 31, the number of shareholders for Longtu Guangzhao was 8,235, a decrease of 4.54% from the previous period, while the average circulating shares per person increased by 4.76% to 3,242 shares [2] - For the first quarter of 2025, Longtu Guangzhao reported a revenue of 54.37 million yuan, a year-on-year decrease of 8.97%, and a net profit attributable to shareholders of 17.33 million yuan, down 30% year-on-year [2] - The company has distributed a total of 53.4 million yuan in dividends since its A-share listing [3]

Core Viewpoint - The article discusses the critical role of photomasks in semiconductor manufacturing, highlighting the technological challenges and market dynamics that affect China's chip industry, particularly in the context of US export restrictions and the need for domestic alternatives [2][3]. Group 1: Photolithography and Photomasks - Photolithography is a key process in chip manufacturing, where patterns from photomasks are transferred onto silicon wafers, directly impacting chip performance and power consumption [5][8]. - The precision required for photomasks has reached atomic levels, with line width errors needing to be controlled within 5 nanometers, equivalent to one ten-thousandth of a human hair [3][4]. - The photomask manufacturing process involves complex steps including CAM data processing, coating, exposure, development, etching, and inspection, with each step having stringent requirements [15][17]. Group 2: Technical Challenges in Photomask Production - The photomask manufacturing process faces significant challenges, including the need for precise environmental control during exposure, where temperature fluctuations can lead to position drift of up to 0.5 nanometers [18][19]. - Position accuracy between different layers of photomasks is critical, with requirements for 7nm processes needing alignment within 1.5 nanometers [19][20]. - Exposure control is vital, as deviations in exposure energy can lead to significant variations in line width, affecting the final product quality [20][28]. Group 3: Market Dynamics and Trends - The global semiconductor materials market is projected to grow, with the photomask segment expected to reach a market size of approximately $5.4 billion by 2023, driven by increasing demand for advanced processes [49][50]. - The photomask market exhibits higher profit margins compared to flat panel displays, with advanced process photomasks showing significant improvements in profitability due to technological advancements [54][57]. - The shift of semiconductor manufacturing capacity to China is anticipated to increase domestic demand for photomasks, with projections indicating a rise in the number of 12-inch wafer fabs in the region [61][63]. Group 4: Photomask Industry Structure - The photomask supply chain is characterized by a heavy reliance on imports for key materials, with major suppliers located in Japan and Korea, leading to a significant domestic technology gap [42][44]. - The cost structure of photomasks is primarily composed of direct materials and manufacturing costs, with photomask substrates accounting for over 90% of direct material costs [46]. - The photomask industry is segmented into in-house production by wafer manufacturers and independent third-party suppliers, with the latter being more prevalent in mature process nodes [52].

Investment Rating - The report maintains an "Accumulate-A" rating for the company Longtu Guozhao (688721.SH) [1][9] Core Views - The company's revenue for 2024 is projected to be 247 million yuan, representing a year-on-year growth of 12.92%, while the net profit attributable to the parent company is expected to reach 91.83 million yuan, a growth of 9.84% [2][4] - The growth rate of revenue and net profit for 2024 is significantly slower compared to 2023, primarily due to the saturation of production capacity at the Shenzhen factory. The new factory in Zhuhai is anticipated to release capacity and drive rapid growth in performance [4][5] - The company is focusing on the construction of a "high-end semiconductor chip mask manufacturing base" project, with major production equipment for the Zhuhai factory arriving and being installed since the end of Q1 2024 [4][5] Financial Performance Summary - In 2023, the company achieved revenue of 218 million yuan, a year-on-year increase of 35.13%, and a net profit of 83.61 million yuan, up 29.66% [4][11] - For 2024, the gross margin is expected to be 57.01%, slightly down by 1.86 percentage points from the previous year, while the net margin is projected at 37.25%, down by 1.05 percentage points [5][11] - The revenue contribution from quartz masks increased from 78.79% in 2023 to 81.31% in 2024, indicating a stable demand for this product line [5][11] Future Projections - The company is expected to achieve revenues of 348 million yuan, 509 million yuan, and 788 million yuan in 2025, 2026, and 2027 respectively, with year-on-year growth rates of 41.0%, 46.6%, and 54.6% [7][11] - Net profits are projected to be 103 million yuan, 162 million yuan, and 263 million yuan for the same years, with growth rates of 12.3%, 57.0%, and 62.7% respectively [7][11]