26 March 2026 | 8:31PM HKT Equity Research Anji Micro (688019.SS): CMP Slurry mix upgrade towards advanced nodes; Wet chemical, ECP showcased in SEMICON; Buy We visited Anji Micro during SEMICON China 2026. The company showcased its product offerings of CMP Slurry, wet chemicals, and ECP (Electrochemical Plating), and management also highlighted the company's comprehensive product lines of CMP Slurry to fulfill diversified demand. Management notes the company covers major logic and memory client, benefiting ...

Summary of Anji Micro (688019.SS) Conference Call Company Overview - **Company**: Anji Micro (688019.SS) - **Industry**: Semiconductor materials, specifically CMP slurry for advanced nodes - **Market Capitalization**: Rmb44.1 billion / $6.3 billion - **Enterprise Value**: Rmb43.4 billion / $6.2 billion Key Points Industry Dynamics - **Rising Demand for AI Memory**: The trend towards Generative AI is increasing the demand for memory and cache to process tokens and support high-speed data transmission, which is expected to drive the CMP slurry market [2][25] - **Advanced Node Expansion**: Local memory suppliers are expected to increase capital expenditures to expand new capacity, particularly for advanced node products like CXMT LPDDR5X [1][3] Company Performance and Financials - **Earnings Revision**: Earnings estimates for 2026-2028 have been revised upwards by 1% to 5%, primarily due to higher revenues from CMP slurry for advanced node clients [3][20] - **Revenue Growth**: Projected revenues are Rmb1,835 million in 2024, Rmb2,534 million in 2025, Rmb3,586 million in 2026, and Rmb4,634 million in 2027, reflecting a significant growth trajectory [7][18] - **Gross Margin Changes**: Gross margins are expected to change slightly, with a decrease of -0.3 percentage points in 2026-2028 due to product mix changes, while operating expenses are expected to decrease as operational efficiency improves [3][20] Financial Ratios and Valuation - **Target Price**: The new 12-month target price is set at Rmb331, implying a 25.5% upside from the current price of Rmb263.66 [1][25] - **P/E Ratio**: The target P/E multiple is set at 32.2x for 2027E, reflecting a re-rating of the company based on growth expectations [20][25] - **Earnings Per Share (EPS)**: Projected EPS is Rmb3.18 for 2024, Rmb4.74 for 2025, Rmb7.26 for 2026, and Rmb10.29 for 2027, indicating strong growth [18][20] Risks and Considerations - **Key Risks**: Potential risks include supply chain disruptions, weaker demand from semiconductor clients, and challenges in product expansion [25][20] Conclusion - **Investment Recommendation**: The company is rated as a "Buy" due to its leadership in CMP slurry, strong growth prospects driven by AI memory demand, and favorable financial revisions [1][25]

Summary of Anji Micro (688019.SS) Conference Call Company Overview - **Company**: Anji Micro (688019.SS) - **Market Cap**: Rmb39.2 billion / $5.6 billion [6] - **Target Price**: Rmb290.00, current price Rmb234.22, indicating an upside of 23.8% [1] Key Industry Insights - **CMP Slurry Market**: The global CMP market is projected to reach $5 billion by 2029, driven by the demand for advanced node manufacturing in edge and cloud AI products [2] - **Wet Chemical and ECP Market**: Anji is expanding into wet chemicals, targeting a market of approximately $1 billion, with a global addressable market of $6 billion [2][33] Core Arguments and Financial Projections - **Revenue Growth**: - 2025E Revenue: Rmb2,534.2 million, up from Rmb2,524 million (0% change) [35] - 2026E Revenue: Rmb3,536.9 million, up from Rmb3,280 million (8% increase) [35] - 2027E Revenue: Rmb4,490 million, up from Rmb4,071 million (10% increase) [35] - **Earnings Growth**: - Net income for 2026E revised up by 11% to Rmb1,206 million [34] - EPS for 2026E revised to Rmb7.21 from Rmb6.48 [35] - **Gross Margin Improvement**: Expected to rise to 59.0% by 2027E, reflecting a product mix upgrade towards higher-margin advanced node products [34][35] Competitive Positioning - **Market Leadership**: Anji Micro is positioned as a local leader in CMP slurry, benefiting from the capacity expansion of logic and memory clients [29] - **Product Portfolio**: The company has a comprehensive product portfolio to meet client demands and is involved in the R&D validation process from early stages [29] Financial Ratios and Valuation - **P/E Ratio**: Target P/E of 29.5x for 2027E, reflecting a positive outlook based on earnings growth [39] - **EBITDA Growth**: Projected to grow from Rmb641.5 million in 2024 to Rmb1,978.7 million by 2027 [6] - **Dividend Payout**: Expected dividend payout ratio remains stable at 10.9% [16] Additional Insights - **Advanced Node Expansion**: The demand for CMP slurry is driven by the increasing complexity of semiconductor manufacturing processes, requiring more CMP steps for advanced nodes [28] - **Synergies from New Markets**: The expansion into wet chemicals and ECP is expected to enhance revenue contributions, particularly from new production lines [33] Conclusion - **Investment Recommendation**: Upgrade to Buy from Neutral, with a revised target price of Rmb290 based on strong growth prospects in CMP slurry and wet chemical markets, alongside improved financial metrics [1][39]

25 September 2025 | 12:59PM HKT Equity Research Anji Micro (688019.SS): CMP Slurry shipment ramp up on new applications and advanced solution; Neutral Anji Micro is expanding CMP slurry and wet chemical products towards advanced nodes, through collaboration with clients to enhance technology and provide customized solution. The company serves leading memory and logic to clients in the China market, with revenues from its top five clients accounting for 75%/ 71% of total revenues in 2024/1H25. With new produ ...