中国半导体：我们该追动量吗？

China Semicap: Shall we chase the momentum? We recently hosted NAURA & AMEC IRs to discuss their 2026 outlook, this call is asummary of our takeaways and our views on what to do from here. Overall, the outlook on2026 order growth is still very positive, while the profitability continue to see pressure.Tactically we don’t recommend chase now as the stocks were up a lot in a short period oftime (YTD NAURA/AMEC/Piotech up 7.5%/29.2%/10.3%), therefore we could see somecorrection in the near term, but structurally we still expect 2026 to be a good year for thesector with strong catalysts to push the stocks to even higher.Maintain Outperform, raise Qingyuan Lin, Ph.D.+852 2123 2654 Zheng Cui+852 2123 2694 Francis Ma+852 2123 2626 NAURA, its order in 2025 was RMB 48bn (RMB 50bn if includes Kingsemi), same asprevious guidance. While for AMEC, its order in 2025 is expected to be RMB 14.3~16.9bn(based on 30%+ YoY growth vs. 2024 RMB 11~13bn order). For 2026, NAURA hasn’tprovided a specific number but remained positive on Advanced Logic (capacity expansion20% YoY) & Memory (capacity expansion 25% YoY) with a more conservative view onMature Node. Meanwhile, AMEC is positive for all downstream customers, especially forDRAM customers with increasing localization ratio. stable growth in Dry Etch & Deposition, while Thermal Process & Cleaning may gain moretraction due to intensified political risks with Japan, and expects Doping equipment to entermass shipment in 2 years. AMEC is expanding in Deposition and expects it to contribute>10% order in 2026. Both companies express the willingness to further expand throughacquisition when they can find suitable targets. decrease slowly to 35-40% due to competition, and will recognize RMB 1.1bn ESOP spending in the fourth quarter hence the net profit in 2025 will be flattish as 2024 (althoughour model show that the company was too conservative). Besides, NAURA plans to hireanother 5,000 employees in 2026, same as 2025, keeping the SG&A and R&D ratiotemporarily high (hiring should slow down in a few years). While for AMEC, mgmt admittedthat there could be some volatility around its 40% GPM target. Its R&D in 2026 will growin dollars but decrease in ratio. Both mentioned that competition is intensifying, especially downside on profitability.Our channel check on DRAM/NAND/Adv logic capacity expansion are both higher than company guidance, we believe the company just don’t havethe visibility for the full year yet and cannot talk on number that is not officially confirmed.On top of that, DRAM/NAND upgrade could bring additional orders beyond new capacity.These could become the positive catalysts throughout the year when the order comes in.On the other hand, the profitability issue will lead to higher P/E multiples, but when the INVESTMENT IMPLICATIONS We rate NAURA, AMEC, Piotech Outperform. DETAILS EXHIBIT 1:China WFE companies have structurally lower GPM, but we believe the higher SG&A and R&D expenseratios are temporary, therefore we might see future upside to NPM for local players over longer term AMAT and LRCX are covered by Bernstein Analyst Stacy Rasgon, TEL is covered by Bernstein Analyst David Dai. NAURA MEETING NOTES 1. 2025 Order Review •2025 order value:NAURA’s standalone orders amounted to approximately RMB 48 billion; including Kingsemi, total orderswere about RMB 50 billion, in line with previous guidance.•Semiconductor equipment order mix:Of the RMB 48 billion standalone orders, about 85% were IC equipment. Within ICequipment, advanced logic accounted for around 40%, mature processes about 33% and memory about 26%–27%.•Reasons for above-expectation orders on matured logic in 2025:A wide range of mature process applications (e.g.,power devices, photonics chips) and local government support for semiconductor capacity expansion. IC equipment type breakdown:Within IC equipment, etching equipment accounted for ~40%, film deposition equipment~50%, with thermal processing and wet equipment accounting for ~8% and ~4%, respectively. 2. 2026 Order Outlook •Overall order expectations:The 2026 order target has not yet been finalized (to be clarified after completion of the “15thFive-Year Plan”), but overall it is considered to be a solid year. Logic is expected to continue growing, memory has big upside,while mature markets has limited visibility; YoY growth rate may slow down versus 2025. Memory expected to grow the fastest (low base in 2025), with wafer starts projected to increase by ~25% (slightly highershare from DRAM). •Advanced logic wafer start growth expected at ~20%. •Mature node wafer start growth has relatively high uncertainty. But 28nm capacity in China remains tight; annual equipment replenishment orders for mature processes are estimated at tens of billions of RMB. Every 10k advanced logicwill need 30k mature logic on peripheral semis, therefore AI also brings upside to the mature logic demand. ~50%, respectively); thermal and wet equipment m