Key takeaway

SINOMAG TECH generated revenue of RMB720mn in 1H26, up 21.76% YoY; net profit attributable to shareholders of the parent company was RMB71.873mn, down 15.69% YoY. AI chip inductors are core components of the third-stage power supply in AI servers. The increase in AI computing power and performance upgrades will drive three key changes: growth in the shipment of computing chips, higher power per chip, and increased value per inductor. As a result, the AI chip inductor market is set to expand rapidly. The company plans to raise funds through a private placement to build production capacity for 180mn AI chip inductors, positioning itself in this high-growth market. It is comprehensively developing two-phase, four-phase, and other TLVR inductors for vertical power delivery in AI servers. The relevant products have entered the supply chains of several leading international semiconductor power supply manufacturers and major domestic power module manufacturers, and are expected to achieve large-scale volume growth in 2027.

Event

SINOMAG TECH generated 1H26 revenue growth of 21.76% YoY.

SINOMAG TECH released its 1H26 report, stating that total operating revenue in 1H26 was RMB72 0 mn, up 21.76% YoY; net profit attributable to shareholders of the parent company was RMB71.873 mn, down 15.69% YoY; and basic earnings per share was RMB0.6151, down 13.88% YoY.

Risks: 1. The project's commissioning progress may fall short of expectations, and any delays in future capacity expansion could impact the company's profit realization. 2. The company is entering the chip inductor market, targeting the AI sector, where chip technology evolves rapidly. Major technological shifts could weaken product competitiveness. 3. Raw materials such as iron oxide, strontium carbonate, barium carbonate, and metals are subject to market fluctuations, which could raise costs and reduce profitability. 4. Demand for ferrite permanent magnets relies on automotive upgrades, NEV adoption, and the penetration of inverter appliances. Soft magnetic demand depends on growth in solar PV, NEVs, and energy storage. Chip inductor demand is tied to AI industry development, while automotive inductors depend on vehicle electrification and smart driving trends. Government policies strongly support downstream sectors like new energy and AI. Subsidy reductions or policy shifts could dampen industry performance and demand.