长电科技新78亿元投资进一步加强其先进封装领先地位

JCET Group (600584.SS) JCET’s New Rmb7.8bn Investment Further Strengthens Its AdvancedPackaging Leadership CITI’S TAKEOn June 24, JCET’s Board approved a Rmb7.8bn (US$1.1bn) investment project to establish a dedicated advanced packaging and testing facility inLingang. The project will proceed in two phases: Phase 1 covers facilityconstruction and equipment procurement (target completion in 2H28),followed by Phase 2 capacity expansion contingent on market conditions.The new facility reflects management’s strong conviction in the long-termgrowth potential of advanced packaging and strengthens JCET’stechnology and scale advantage. We view the announcement as a positive catalyst, reinforcing JCET’s strategic resolve in advanced packaging at atime of accelerating domestic AI/HPC chip production. Pricing Kevin ChenAC+852-2501-2125kevin.y.chen@citi.com Kyna Wongkyna.wong@citi.com Karen Huangkaren.xw.huang@citi.com Yiming Li, CFAyiming.li@citi.com See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations RELATED: Greater China Semiconductors: Sector Re-Rating Lifts Valuations Across the Board; Model UpdateGreater China Semiconductors: China’s New Rmb2tn AI Investment Plan Positive for Domestic AI Supply ChainGreater China Semiconductors: The New Tauism: Huawei’s Tau Scaling Advances Chip Performance Short-Term View on JCET Group (600584.SS) JCET Group ValuationWe set our target price for JCET at Rmb110 based on a 6.0x 2027E P/B. We believe the China OSAT industry is entering an unprecedented upcycle driven by AI proliferation, tightening industry supply, and growing emphasis on advanced packaging,thus awarding JCET a premium valuation as a key enabler for advanced packaging. We expect industry capacity utilization to Risks Key downside risks to our target price include: 1) advanced packaging expansion outpacing demand growth, especially givenchallenges at the front-end; 2) memory makers internalizing back-end packaging operations; 3) falling utilization after industrycapacity expansion; 4) geopolitical tensions reducing demand for JCET’s overseas operations; 5) US export restrictions limiting Tianshui Huatian(002185.SZ; Rmb20.98; 1; 24 Jun 26; 15:00) ValuationWe set our target price for TSHT at Rmb23.5 based on a 4.0x 2027E P/B. We believe the China OSAT industry is entering an unprecedented upcycle driven by AI proliferation, tightening industry supply, and growing emphasis on advanced packaging,thus awarding TSHT a premium valuation over its historical range. We expect industry capacity utilization to remain tight given Risks Key downside risks to our target price include: 1) AI capex slowdown casting concerns over subsequent OSAT demand; 2) fallingutilization after industry capacity expansion; 3) geopolitical tensions reducing demand for TSHT’s overseas operations; 4) USexport restrictions limiting supply of back-end equipment. TongFu Microelectronics(002156.SZ; Rmb74.64; 1; 24 Jun 26; 15:00) ValuationWe set our target price for TFME at Rmb80 based on a 6.5x 2027E P/B. We believe the China OSAT industry is entering an unprecedented upcycle driven by AI proliferation, tightening industry supply, and growing emphasis on advanced packaging,thus awarding TFME a premium valuation as a key enabler for advanced packaging. TFME is also positioned for a strong growth Risks Key downside risks to our target price include: 1) market share loss at the key customer for exclusion of AI-related business; 2)memory makers internalizing back-end packaging operations; 3) falling utilization after industry capacity expansion; 4)geopolitical tensions reducing demand for TFME’s overseas operations; 5) US export restrictions limiting supply of back-end If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside the Appendix A-1 ANALYST CERTIFICATIONThe research analysts primarily responsible for the preparation and content of this research report are either (i) designated by “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the report IMPORTANT DISCLOSURES Citigroup Global Markets Inc. or its affiliates received compensation for products and services other than investment bankingservices from JCET Group,TongFu Microelectronics in the past 12 months. Citigroup Global Markets Inc. or its af