Core Viewpoint - The photovoltaic industry is experiencing significant performance impacts due to cyclical fluctuations, leading to a substantial decline in revenue and profitability for companies in the sector [1][2]. Financial Performance - In H1 2025, the company's revenue was 5.8 billion yuan, a year-on-year decrease of 42.9%, with equipment and services revenue at 4.08 billion yuan (down 44.6%) and materials revenue at 1.23 billion yuan (down 48.2%) [1] - The net profit attributable to the parent company was 640 million yuan, a year-on-year decline of 69.5% [1] - In Q2 2025, the single-quarter revenue was 2.66 billion yuan, down 52.8% year-on-year and 15.2% quarter-on-quarter, with net profit of 70 million yuan, a 93.6% year-on-year decline [1] Profitability Metrics - The gross margin for H1 2025 was 24.4%, a decrease of 12.6 percentage points year-on-year, with equipment and services gross margin at 32.9% (down 4.5 percentage points) and materials gross margin at 6.22% (down 33.9 percentage points) [2] - The net profit margin was 10.7%, down 12.8 percentage points year-on-year, with a period expense ratio of 13.0%, an increase of 4.2 percentage points [2] - In Q2 2025, the gross margin was 20.6%, down 11.2 percentage points year-on-year and 6.9 percentage points quarter-on-quarter, with a net profit margin of 2.3%, down 16.2% year-on-year and 15.5% quarter-on-quarter [2] Inventory and Cash Flow - As of Q2 2025, contract liabilities were 3.17 billion yuan, a year-on-year decrease of 62.1%, and inventory was 8.95 billion yuan, down 35.0% [2] - The company reported a net cash flow from operating activities of 450 million yuan in H1 2025, an increase of 55.8% year-on-year [2] Product Development and Market Position - The company focuses on large silicon wafers, advanced packaging, advanced processes, and silicon carbide equipment, providing comprehensive solutions for crystal growth, slicing, grinding, and polishing [3] - The company has developed various silicon carbide equipment and has planned a total production capacity of 900,000 pieces for silicon carbide substrates, with significant partnerships in the AR glasses sector [3] Subsidiary Performance - The subsidiary, Jinghong Precision, specializes in high-precision components and has capabilities in special welding, assembly testing, and semiconductor-level surface treatment, targeting high-end product markets [4] - The profit forecast for the company has been adjusted downwards for 2025-2027, but the growth potential across multiple business lines remains [4]

Summary of Jinsheng Electric's Conference Call Company Overview - **Company**: Jinsheng Electric - **Industry**: Semiconductor and Photovoltaic Equipment Key Points Financial Performance - In the first half of 2025, Jinsheng Electric achieved a revenue of 5.799 billion yuan and a net profit attributable to shareholders of 639 million yuan [3] - The company reported a net cash inflow from operating activities of 447 million yuan, a year-on-year increase of 55.84%, indicating improved financial management [2][4] Business Segments - Jinsheng Electric focuses on three main business segments: semiconductor equipment, substrate materials, and consumables [2] - The company has over 3.7 billion yuan in unfulfilled contracts for integrated circuits and compound semiconductor equipment as of June 30, 2025 [3] Semiconductor Equipment - The company successfully delivered 12-inch silicon epitaxy equipment to leading domestic clients and is promoting 8-inch silicon carbide (SiC) epitaxy equipment [3] - New products such as the 12-inch dry-in dry-out edge polishing machine and double-sided thinning machine are undergoing customer validation [3] - Jinsheng Electric is a market leader in large silicon wafer equipment and is expanding its overseas market for semiconductor components and consumables [3][4] Photovoltaic Equipment - The company is optimistic about the long-term development of the photovoltaic industry and is addressing overcapacity challenges through technological innovations [2][5] - New products like Topcon efficiency EPD equipment and BC end silver-free multi-wire welding equipment are expected to have a positive impact from 2025 to 2026 [5][6] Silicon Carbide (SiC) Development - Jinsheng Electric has made significant advancements in 12-inch SiC crystal growth technology and is validating 8-inch SiC substrates with global customers [2][4] - The company plans to produce 600,000 wafers per month to meet future market demand, anticipating that 8-inch SiC will fully replace 6-inch [2][7] - The expected turning point for SiC development is projected for 2026-2027, particularly in the automotive sector [3][11] Market Outlook - The company expects a significant increase in demand for 8-inch conductive chips and MOSFETs by 2026-2027, driven by investments from major players like Infineon [9][11] - The photovoltaic industry is recovering from a downturn, and Jinsheng Electric is focused on maintaining order expansion and enhancing competitiveness through innovation [16] Challenges and Strategies - The company faces challenges in the photovoltaic equipment sector due to intense competition and cash flow pressures, particularly in the dry pot and diamond wire segments [28] - Jinsheng Electric is committed to continuous investment in key areas to ensure long-term sustainable development despite current financial performance not meeting expectations [29] Inventory and Supply Chain - The company maintains a lean inventory in the photovoltaic sector, while semiconductor components are stocked due to the long cycle nature of the industry [20] Conclusion - Jinsheng Electric is strategically positioned in the semiconductor and photovoltaic equipment markets, with a focus on innovation and expansion to capture future growth opportunities in the SiC and photovoltaic sectors [2][3][4][5][6][7][11][16][29]

Financial Performance - The company achieved operating revenue of 579,895.11 million yuan in the first half of 2025, with a decline in revenue and profit from photovoltaic equipment and materials due to cyclical adjustments in the industry [2] - The semiconductor business continued to grow, with unfulfilled contracts for integrated circuits and compound semiconductor equipment exceeding 3.7 billion yuan as of June 30, 2025 [2] Semiconductor Equipment Development - The company successfully delivered 12-inch atmospheric silicon epitaxy equipment to leading domestic customers, achieving international advanced levels in key performance indicators [3] - New products such as the 12-inch dry-in-dry-out edge grinding machine and 12-inch double-sided thinning machine are undergoing customer validation [3] Silicon Carbide Substrate Progress - The company made significant breakthroughs in the growth of 12-inch conductive silicon carbide crystals, addressing core challenges in temperature uniformity and crystal cracking [4] - The company is expanding its global customer verification for 8-inch silicon carbide substrates and has received bulk orders from international clients [4] Semiconductor Components and Materials - The subsidiary, Jinghong Precision, is enhancing its manufacturing capabilities for core components, focusing on precision processing and special welding [5] - The company has achieved domestic substitution for semiconductor quartz crucibles, leading the market share and overcoming technical bottlenecks for large-sized crucibles [5] Sapphire Business Growth - The sapphire material business experienced year-on-year growth driven by new applications in LED and consumer electronics sectors [5] Customer Base and Risk Management - The company has established a strong reputation among high-end clients in the semiconductor and photovoltaic industries, with long-term strategic partnerships [6] - To mitigate order fulfillment risks, the company focuses on large, financially stable clients and implements strict credit management and contract practices [6]