Q3 2025 EARNINGS PRESENTATION NOVEMBER 4, 2025 SAFE HARBOR STATEMENT This presentation contains, and the conference call will contain, forward-looking statements under the Private Securities Litigation Reform Act safe harbor provisions. These statements, which include our expectations for spending in our industry and guidance for future financial performance, are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties that could cause ...

Summary of Advanced Micro-Fabrication Equipment Inc. (AMEC) Conference Call Company Overview - **Company**: Advanced Micro-Fabrication Equipment Inc. (AMEC) - **Ticker**: 688012.SS - **Industry**: Semiconductor Equipment Manufacturing Key Financial Results - **3Q25 Net Profit**: Rmb505 million, up 28% YoY, beating consensus estimate of Rmb478 million by 6% [1][11] - **Revenue**: Rmb3.1 billion, a 51% YoY increase, driven by 35% YoY growth in etching equipment sales and Rmb204 million from LPCVD/ALD [1][11] - **Gross Profit Margin (GPM)**: Decreased by 5.8 percentage points YoY to 37.8% due to price discounts for large customers [1][11] - **R&D Expenses**: Increased by 96% YoY to 21.8% of total revenue, reflecting investment in new equipment development [2] Growth Drivers and Market Dynamics - **Import Replacement Demand**: Strong revenue/order growth expected from Chinese logic customers, particularly in memory sectors [3] - **Capacity Expansion**: Foundries in South China, including Pengxinwei and Pensun, are expanding capacities, which may benefit AMEC [3] - **New Product Launches**: Introduction of 90:1 HAR etching machines aimed at supporting Chinese memory customers in producing advanced 3D NAND [3] Valuation and Investment Outlook - **Target Price**: Raised to Rmb352, reflecting a ~63% increase based on a revised P/S multiple of ~13x for 2026E [4][22] - **Investment Rating**: Reiterated Buy due to strong revenue growth prospects and ongoing import replacement trends [4][21] Earnings Forecast Revisions - **2025E Revenue**: Revised to Rmb12.449 billion, a 1% increase from previous estimates [12] - **2026E Revenue**: Revised to Rmb16.603 billion, a 2% increase [12] - **Net Profit Forecasts**: Adjusted downwards for 2025E and 2026E due to anticipated lower margins [12] Risks and Challenges - **Market Risks**: Potential impacts from stricter US restrictions, a weaker semiconductor cycle, and lower-than-expected GPM [23] Additional Insights - **Market Capitalization**: Approximately Rmb185.75 billion (US$26.17 billion) [6] - **Expected Total Return**: 18.8%, including a dividend yield of 0.1% [6] - **Long-term Growth**: Management projects at least 30% YoY revenue and new order growth in 2025 [21] This summary encapsulates the essential points from the conference call regarding AMEC's financial performance, market position, growth strategies, and investment outlook.

Core Insights - The company reported a revenue of 9.065 billion yuan for the year 2024, representing a year-on-year increase of 44.73%, while the net profit attributable to shareholders decreased by 9.53% to 1.616 billion yuan [1] - The fourth quarter of 2024 saw a revenue of 3.558 billion yuan, a year-on-year increase of 60.11% and a quarter-on-quarter increase of 72.76% [3] - The company is making significant progress in new product development, particularly in etching and thin film deposition technologies [4] Financial Performance - For the full year 2024, the company achieved a revenue of 9.065 billion yuan, with a net profit of 1.616 billion yuan and a non-GAAP net profit of 1.388 billion yuan, which is a 16.51% increase year-on-year [1] - In Q4 2024, the company reported a net profit of 703 million yuan, which is a 12.24% increase year-on-year and a 77.32% increase quarter-on-quarter [3] - The gross margin for Q4 2024 was 39.26%, down 6.55 percentage points year-on-year, indicating a shift in product mix [3] Product Performance - The etching equipment segment generated revenue of 7.277 billion yuan for the full year 2024, a 54.72% increase year-on-year, while the MOCVD segment saw a revenue decline of 18.03% to 379 million yuan [1] - In Q4 2024, etching equipment revenue reached 2.863 billion yuan, up 56.19% year-on-year and 66.94% quarter-on-quarter [3] - The LPCVD segment showed significant growth in the second half of 2024, with revenue increasing from 28 million yuan in the first half to 128 million yuan [3] Customer Insights - The top three customers accounted for 22.15%, 21.23%, and 18.80% of the company's revenue, indicating a concentrated customer base [2] New Product Development - The company has made advancements in etching technology, with ultra-high aspect ratio CCP equipment being applied in advanced production lines [4] - New tungsten deposition equipment has passed key client validations, and the company is actively developing metal gate series products for logic clients [4] - The establishment of a new subsidiary focused on electron beam measurement equipment is aimed at expanding market participation [5] Future Outlook - Revenue projections for 2025-2027 are estimated at 11.943 billion yuan, 15.656 billion yuan, and 19.710 billion yuan, with net profits of 2.312 billion yuan, 3.241 billion yuan, and 4.102 billion yuan respectively [5]