Key takeaway

The company released its 2026 interim report. In 1H26, revenue reached RMB674mn, up 51.94% YoY; net profit attributable to shareholders of the parent company reached RMB99mn, up 133.21% YoY; and net profit attributable to shareholders of the parent company excluding non-recurring gains and losses reached RMB96mn, up 133.93% YoY. The strong earnings growth was mainly driven by continued order growth for electroplating equipment in the PCB sector. An investment boom in Southeast Asia and rising demand for AI-powered big data storage also boosted exports of electroplating equipment for high-end boards. Revenue expansion and an improved product mix jointly enhanced profitability. The company's new order intake reached another record high during the reporting period. The value of orders for vertical continuous plating equipment grew by more than 150% YoY. At the end of 1H26, contract liabilities stood at RMB1.114bn, up 60.61% from the beginning of the year, while inventories stood at RMB1.477bn, up 43.34% from the beginning of the year. These forward-looking indicators confirm robust orders and inventory preparation. New semiconductor businesses, including TGV, RDL and PVD, and new energy businesses, including composite copper foil and HVLP5 copper foil, are gradually entering the commercialization stage. The Thailand production base has served dozens of customers across Southeast Asia. The company's platform-based and global expansion is expected to support sustained high earnings growth.

Event

The company released its 2026 interim report. Revenue reached RMB674mn in 1H26, up 51.94% YoY; net profit attributable to shareholders of the parent company reached RMB99mn, up 133.21% YoY; and net profit attributable to shareholders of the parent company excluding non-recurring gains and losses reached RMB96mn, up 133.93% YoY.

In 2Q26, revenue reached RMB368mn, up 58.75% YoY and 20.53% QoQ; net profit attributable to shareholders of the parent company reached RMB55mn, up 114.95% YoY and 23.67% QoQ; and net profit attributable to shareholders of the parent company excluding nonrecurring gains and losses reached RMB52mn, up 112.75% YoY and 20.40% QoQ.

Quick Take

PCB industry momentum and Southeast Asia's investment boom drive rapid revenue growth

The company's revenue reached RMB674mn in 1H26, up 51.94% YoY. Growth was mainly driven by PCB electroplating equipment. 1) PCB sector: Strong demand for AI and high-speed networks is driving industry growth. According to Prismark, the global PCB market grew 16.7% YoY to USD85.8bn in 2025. The PCB market for AI servers and storage grew 47% YoY and is expected to grow by a further 53% in 2026. The company capitalized on the investment boom in Southeast Asia and surging exports of equipment for high-end boards. The value of orders for vertical continuous plating equipment (VCP) grew by more than 150% YoY, while overall new order intake reached a record high. 2) Business mix: Revenue from equipment and other products reached RMB666mn, up 51.05% YoY, accounting for nearly 99.8% of core business revenue; domestic revenue was RMB481mn, while overseas revenue was RMB193mn, accounting for 28.65%. The Thailand production base has served dozens of customers in Southeast Asia, and the overseas expansion has entered the results realization phase. 3) Customers and competitive landscape: The company serves most leading PCB manufacturers in China. Its domestic market share in VCP equipment exceeds 50%, demonstrating a significant market leadership advantage. We believe the capacity expansion cycle for AI server PCBs and the wave of factory construction in Southeast Asia will continue, supporting strong demand in the core business.

Optimized revenue mix and effective expense control significantly boost gross margin and net margin YoY

The company improved its profitability while achieving strong revenue growth. 1) Gross margin: Overall gross margin was approximately 37.56%, up 5.06 pcts YoY. This was mainly driven by a higher proportion of highmargin, high-end VCP equipment and lower unit costs due to economies of scale. 2) Expenses and earnings quality: The company's period expense ratio was 18.53%, down 2.77 pcts YoY, reflecting effective expense control. Selling expense and administrative expense increased moderately alongside business e xpansion, but their ratios remained under control amid strong revenue growth; non-recurring gains and losses were approximately RMB3.38mn. Growth in net profit excluding non-recurring items was broadly in line with growth in net profit attributable to shareholders of the parent company, indicating high earnings quality. 3) Net margin attributable to shareholders of the parent company was 14.71%, up 5.12 pcts YoY. As the company shifts toward high-end electroplating equipment and increases the contribution from new businesses such as semiconductor and new energy equipment, its profitability is expected to improve further.

Strong growth in contract liabilities and inventories confirms robust orders, while operating quality remains sound

The company's operating quality continued to improve, with both orders and cash flow recording strong growth. 1) Orders: At the end of 1H, contract liabilities reached RMB1.114bn, up 60.61% from the beginning of the year; inventories reached RMB1.477bn, up 43.34%; and prepayments reached RMB22mn, up 57.49%. Strong simultaneous growth in orders, inventory stocking, and material payments provides multiple indications of robust industry demand. 2) Cash flow: Net cash flow from operating activities reached RMB311mn, up 924.83% YoY. This was mainly driven by increased payment collections amid order growth, reflecting the company's steadily improving operating quality.

New semiconductor and new energy businesses enter the results realization phase, while platform-based development and globalization unlock long-term growth potential

The company is accelerating the rollout of its second growth engine, while platform-based and global development opens up room for long-term growth. 1) Semiconductors: Glass substrate-related equipment can be used in semiconductor packaging, and the company successfully delivered PVD, TGV, and RDL equipment to customers in 2025, added an order for one TGV system during the reporting period, and achieved a breakthrough from zero to one in advanced packaging equipment. 2) New energy: Composite current collectors have been included among the three core strategic materials under China’s 15th Five-Year Plan, while the company successfully developed a two-stage, dual-side-drive, roll-to-roll horizontal contactless plating line and secured a repeat order, achieved scaled mass production of three-in-one horizontal plating equipment and transfer-type VCP equipment, and expanded the applications of dual-side clamping roll-to-roll horizontal plating equipment and magnetron sputtering roll-to-roll coating equipment to HVLP5 copper foil, PI electronic copper foil, copper foil for displays, and shielding materials. 3) Globalization: The Thailand facility serves Southeast Asia, and overseas revenue accounts for nearly 30% of total revenue.

Earnings forecast and investment recommendation

For 2026-2028, the company's estimated revenue is RMB2,218mn, RMB3,864mn, and RMB5,408mn, representing YoY growth of +101.89%, +74.26%, and +39.95%, respectively. Its estimated net profit attributable to shareholders of the parent company is RMB420mn, RMB779mn, and RMB1,133mn, representing YoY growth of +247.55%, +85.40%, and +45.43%, with corresponding P/E ratios of 41.92x, 22.61x, and 15.55x. Considering the company's forward-looking strategy in PCB electroplating equipment, it is well-positioned to continue benefiting from the current PCB industry expansion cycle. We initiate coverage with a "Buy" rating.

Risks:

1. Risk of macroeconomic environment changes: The company's core products are mainly used in the PCB electroplating, general hardware electroplating, and new energy sectors. If downstream industries are affected by macroeconomic cyclical fluctuations or adjustments to relevant industrial policies in the future, this will adversely impact the company's operating performance.

2. Risk of core technology leakage: The industry in which the company operates is talent-intensive. With continuously growing market demand and increasingly fierce industry competition, competition for talent among enterprises is also gradually intensifying. If the company cannot continuously strengthen the recruitment, incentivization, and protection of technical talent, it faces a certain risk of technical talent loss.

3. Risk of large inventory: The company maintains a relatively large inventory. If the scale of the company's inventory expands further in the future, it may have a certain adverse impact on the company's production and operations.

4. Risk of bad debts from accounts receivable: The company has a relatively large amount of accounts receivable. If a customer's credit status undergoes a material adverse change in the future, the company will face a certain risk of bad debts from accounts receivable.