NAURA reported 3Q26 revenue of RMB11.3bn (+1.3% YoY/14.9% QoQ) and net profit of RMB2.0bn (+5.2% YoY/16.5% QoQ). The YoY deceleration in revenue (2Q26 growth: +24% YoY) reflected material shortages in select product categories as mgmt. noted that orders continued to grow and shipments increased significantly, suggesting that delivery constraints, rather than demand weakness, were the main bottleneck. GPM fell 2.0ppts YoY and 1.0ppt QoQ to 38.3% in 3Q26, reflecting higher component iteration and upgrade costs during new-product validation and discounts for certain high-volume customers. Maintain BUY. As China’s leading platform-based semi manufacturing equipment supplier, NAURA remains a key beneficiary of the structural localization of the SPE sector. We trim our TP to RMB750 based on 50x 2027E P/E (52x prev.), slightly above its one-year historical forward average of 48x.

Order momentum remains firm, but material availability is constraining delivery. AI-related semi demand, domestic capacity expansion and equipment localization continued to support market-share gains across etching, thin-film deposition, thermal processing, wet cleaning, ion implantation, track and bonding equipment in 9M26. Mgmt. noted continued order growth and a significant increase in shipments, although shortages of certain materials limited revenue conversion. Inventory rose 11.1% QoQ to RMB33.9bn by 3Q26, while contract liabilities remained broadly stable at RMB5.3bn. The inventory build supports future deliveries but highlights the importance of supply-chain execution and customer acceptance. We lower our FY26E/27E revenue forecasts by 4.1%/2.3%.

Higher R&D investment and GPM pressure continued to constrain operating leverage. In 9M26, R&D expenses increased 17.2% YoY to RMB3.85bn, while selling expenses rose 41.4% to RMB1.21bn as NAURA expanded its market-development and customer-service resources. Meanwhile, 9M26 GPM declined 2.0ppts YoY to 39.4%, mainly due to higher component iteration and upgrade costs during new-product validation and commercial discounts for selected high-volume customers. Accordingly, we reduce our FY26E/27E GPM assumptions by 0.1ppt/0.4ppt.

Revenue visibility remains solid, with execution and margin recovery now the key variables. NAURA’s broad product portfolio, growing order base and increasing process coverage should support its medium-term outlook. Near-term performance will however depend on improved material availability, faster product validation and customer acceptance. Key risks include prolonged supply-chain constraints, slower customer acceptance, intensifying price competition, etc.