Core Viewpoint - The company, Jing Sheng Co., Ltd. (688478), is experiencing challenges in its financial performance but is optimistic about future growth in the silicon carbide industry, particularly with the shift towards 8-inch equipment and new applications in emerging markets [1][6]. Group 1: Company Performance - In the first half of 2025, the company's main revenue was 158 million yuan, a year-on-year decrease of 20.29% [6]. - The net profit attributable to shareholders was -7.45 million yuan, a decline of 121.29% year-on-year [6]. - The gross profit margin was reported at 3.87%, indicating significant pressure on profitability [6]. Group 2: Market and Industry Trends - The demand for 6-inch silicon carbide substrates is declining, while there is a positive trend in orders for 8-inch silicon carbide single crystal furnaces compared to the second half of last year and the first half of this year [2]. - The silicon carbide industry is expected to grow due to its applications in electric vehicles, photovoltaic inverters, and rail transportation, with cost reductions further driving adoption [3]. - The company is currently collaborating with clients on small-scale production of 12-inch silicon carbide, which has not yet reached mass production [4]. Group 3: Future Outlook - The company anticipates that as the photovoltaic business's proportion decreases, the gross profit margin will improve in the second half of the year and significantly enhance in the following year [5]. - The company is focusing on maintaining market share and acquiring key customers, adjusting product prices based on market conditions [5]. - Recent institutional ratings indicate a buy recommendation, reflecting some confidence in the company's future performance [7]. Group 4: Financial Projections - Forecasts for net profit in 2025 range from 54 million to 85 million yuan, with projections for 2026 and 2027 showing potential growth to 99 million and 131 million yuan, respectively [9]. - The stock has seen a net inflow of 202 million yuan in financing over the past three months, indicating increased investor interest [9].

Core Viewpoint - The recent surge in institutional research on stocks, particularly the interest in Jing Sheng Machinery, indicates potential investment opportunities driven by solid fundamentals and industry trends [1][3]. Group 1: Institutional Research and Stock Performance - 381 companies were involved in institutional research this week, with approximately 70% experiencing price increases [1]. - Jing Sheng Machinery attracted attention from 115 institutions, surpassing other popular stocks, indicating strong interest in its business prospects [1][3]. Group 2: Valuation Screening - The first investment principle emphasizes valuation screening, focusing on the company's "cost-performance" ratio within its industry rather than just a low PE ratio [3]. - Jing Sheng Machinery operates in the semiconductor equipment sector, particularly in silicon carbide, which is a high-growth area, and its current valuation appears reasonable based on its financial performance [3][4]. Group 3: Fundamental Screening - The second principle highlights the importance of fundamental screening, with institutions focusing on Jing Sheng Machinery's core silicon carbide and semiconductor businesses [4]. - The company has begun mass production of silicon carbide crystal growth furnaces, indicating technological validation and market readiness [4]. Group 4: Industry Trends - The third principle involves screening for industry trends, with Jing Sheng Machinery positioned in the semiconductor equipment sector, particularly benefiting from the growth in new energy vehicles and photovoltaic industries [5]. - The demand for silicon carbide is driven by the need for efficient power devices, making it a critical component in these expanding markets [5]. Group 5: Investment Strategy - The stock price of Jing Sheng Machinery has shown volatility due to institutional research, but a long-term investment strategy should focus on valuation, fundamental performance, and industry trends [6]. - Investors are advised to wait for a price correction to a more reasonable valuation before making investment decisions, rather than chasing short-term price movements [6].

Group 1 - Nvidia plans to replace silicon with silicon carbide (SiC) for the intermediate substrate material in the advanced packaging process of its next-generation Rubin processor [1] - TSMC and compound semiconductor manufacturers are involved in the development of 12-inch single crystal silicon carbide thermal substrates [1] Group 2 - Ruina Intelligent is actively advancing the sampling and verification of 8-inch silicon carbide substrates [2] - Chervit has a series of short-channel silicon carbide MOSFET devices and manufacturing technology [2] - Yuhuan CNC is progressing in the sampling and sales of silicon carbide equipment for material processing [2] - Pairui Co., Ltd. includes silicon carbide devices in its IPO fundraising projects [2] - Wenzhou Hongfeng is in the research phase of high-purity silicon carbide powder and related projects [2] - Xinrui Technology has launched bidirectional charging technology based on third-generation silicon carbide technology [2] - Galaxy Microelectronics produces power devices including silicon carbide MOSFETs for automotive applications [2] Group 3 - Mind Electronics is strategically laying out in both silicon-based and silicon carbide devices [3] - Libang Co., Ltd. has invested in Zhanxin Electronics, which provides power conversion solutions centered on SiC power driver chips and modules [3] - Delong Laser's products are applied in the cutting of silicon carbide and other third-generation semiconductors [3] - Blue Ocean Card Screen is involved in the development of silicon carbide semiconductor IGBT modules for BYD [3] - Derun Electronics is a pioneer in mass-producing 22kW 800V high-power devices using third-generation semiconductor technology [3] Group 4 - Dongni Electronics aims to achieve an annual production of 120,000 silicon carbide semiconductor materials by 2023 [4] - Jinbo Co., Ltd. provides high-performance thermal field materials for silicon-based and silicon carbide semiconductor fields [4] - Zhongtian Rocket's silicon carbide products are used in aerospace composite materials and semiconductor coatings [4] - Kema Technology specializes in ultra-high purity silicon carbide products with a purity of 99.99% [4] Group 5 - Yunnan Mingye focuses on research in dislocation density and silicon carbide single crystal materials [6] - National Science Microelectronics has a subsidiary that specializes in the sales of silicon carbide power devices [6] - Jiejie Microelectronics holds patents related to silicon carbide and is involved in the packaging of silicon carbide devices [6] - Zhenhua Technology's semiconductor power devices and silicon carbide products are applied in high-power electric drive systems [6] Group 6 - Jing Sheng Machine Electric is a leader in crystal growth equipment and has developed silicon carbide crystal growth equipment [7] - Silan Microelectronics has a production line for 6-inch silicon carbide power devices with a capacity of 3,000 pieces per month [7] - Tongfu Microelectronics has the capability to package third-generation silicon carbide semiconductors [7] - Sanan Optoelectronics is a leader in the silicon carbide full industry chain [7] - Northern Huachuang is a leading domestic semiconductor equipment manufacturer with a significant market share in silicon carbide [7]

Group 1: Opportunities for Domestic Substitution - Domestic companies are making significant technological breakthroughs in the silicon carbide (SiC) sector, narrowing the gap with international leaders, particularly in the electric vehicle (EV) market [2] - In 2023, China's market share of SiC epitaxial wafers reached 38.8%, ranking first globally, driven by increased production capacity [3] - National policies are increasingly supportive of key semiconductor materials, with the "14th Five-Year Plan for Integrated Circuit Industry" emphasizing the need to overcome technological bottlenecks in third-generation semiconductor materials [4] Group 2: Restructuring Industry Landscape - The core competitiveness of the SiC industry chain lies in the self-sufficiency of upstream materials and equipment, with companies mastering key equipment and high-end materials poised for rapid growth [5] - Domestic companies are accelerating their catch-up in device manufacturing, especially in automotive-grade SiC power devices, benefiting from the continuous growth of the EV market [6] - The application scenarios for SiC are expanding beyond EVs to include photovoltaic power generation, rail transportation, and industrial power supplies, positioning domestic companies for significant global market presence [7] Group 3: Dual-Driven Growth of Domestic Breakthroughs - Chinese companies have established a significant cost advantage through continuous R&D and process innovation, with 6-inch substrate prices at only 30% of international levels [8] - The acceleration of equipment localization is exemplified by Northern Huachuang's new generation SiC crystal growth furnace, which reduces equipment prices by 50% and surpasses key performance indicators [9] Group 4: Market Opportunities for Domestic SiC - The EV market is the largest application for SiC, with projected production and sales of 12.888 million and 12.866 million units in China for 2024, reflecting year-on-year growth of 34.4% and 35.5% [12] - In the photovoltaic and energy storage sectors, SiC is a key technology for improving system efficiency, with China's new photovoltaic installations expected to reach 277.2 GW in 2024, a 27.8% increase [13] - Emerging technologies such as AI data centers and AR glasses present new growth opportunities for the SiC industry, with AI data centers requiring high-efficiency power modules [14] Group 5: Benefiting Companies - Tianyue Advanced is one of the few global participants capable of mass-producing 8-inch SiC substrates, with a projected global market share ranking second in conductive SiC substrate materials by 2024 [16] - Tianshuo He Da is the largest domestic supplier of power electronics SiC substrates, holding a 17.3% share in the global market, and is positioned to capture orders following Wolfspeed's bankruptcy [16] - Sinda Semiconductor is making progress in the SiC sector, with its SiC MOSFET modules for passenger vehicle motor controllers seeing increased volume [16] - Mind Electronics, through its subsidiary Guangxin Microelectronics, is expected to achieve an annual production capacity of 36,000 6-inch SiC wafers, with costs significantly lower than competitors [17]