Naura announced key financials regarding its FY24/1Q25 earnings. FY24 revenue went up by 35.1% YoY to RMB29.8bn (3.3% below our estimate/in-line with consensus). The strong revenue growth was driven by technology breakthroughs in core product lines that enabled broader product coverage and supported continued market share gains. In FY24, net profit went up by 44.2% YoY to RMB5.6bn (3.2%/1.6 below our /consensus). During the period, NPM improved to 18.8% (vs. 17.7% in FY23) on better operating efficiency. For 1Q25, the company expects the mid-point revenue to increase by 39.3% YoY to RMB8.2bn (beating consensus by 5.5%), and mid-point net profit to grow 40.3% YoY to RMB1.6bn (beating BBG consensus by 12.5%). 1Q25 mid-point NPM would be 19.4% (vs. 19.2% in 1Q24). Reiterate BUY with TP revised up to

RMB512, based on 36x FY25E P/E (vs. prev. 30x), in-line with industry peers’ average P/E of 36x.

Backed by ongoing innovation and technology breakthroughs in core product lines, the company sustained steady market share gains.

Mgmt. attributed the strong revenue growth to the successful commercialization and volume shipment of several new products, including CCP etchers, PECVD, ALD vertical furnaces, etc., which significantly enhanced the company’s product coverage and competitiveness in the domestic SME segment. We project the company’s revenue to grow by 30.8% YoY in 2025E on continuous market share gains and new product launches.

Reiterate BUY with TP revised up to RMB512. We maintain our forecasts

for 2025/26E. The new TP is based on 36x FY25E P/E (peers avg.) vs. previous 30x. We expect semi-industry consolidation in China to accelerate in 2025, which is one of the key themes in our 2025 outlook report. China’s leading semi cap players are well-positioned to benefit from domestic self- sufficiency initiatives and M&A momentum. Meanwhile, we believe the recently announced US reciprocal tariffs on China (effective 2 April) are going to pose a minimal impact on the company in the near term, as it generates all revenue domestically with no exposure to foreign markets. In the long term, the tariff serves as a catalyst for faster supply chain localization efforts, a clear tailwind for leading domestic players like Naura.

Key risks: lower-than-expected domestic foundry capex plan, slower-than- expected R&D progress, higher raw material costs, etc.