JCET的新78亿投资进一步巩固其先进封装领导地位

JCETGroup(600584.SS)JCET'sNew Rmb7.8bn Investment Further Strengthens Its Advanced Packaging Leadership OnJune24,JCET'sBoardapprovedaRmb7.8bn(USs1.1bn)investment projectto establishadedicated advanced packaging and testingfacilityinLingang.Theprojectwillproceedintwophases:Phase1coversfacilityconstructionand equipmentprocurement(targetcompletionin2H28),followedbyPhase2capacityexpansioncontingentonmarketconditions.Thenewfacilityreflectsmanagement'sstrongconvictioninthelong-termtechnologyandscaleadvantage.Weviewtheannouncementasapositivecatalyst,reinforcing JCET'sstrategicresolve inadvanced packaging atatimeofacceleratingdomesticAi/HPCchipproduction.Pricingenvironmentis positive into2H26as industry capacity remainstight.Theincrementaladvancedpackagingcapacitycomingonlinein2H28-2029positionsJCETtocapitalizeonChina'svolumerampinhigh-performancecomputing/networking.WereiterateourpositiveviewonChinaOSATandourpreferenceofJCET>TFME>TSHT. +852-2501-2125kevin.y.chen@citi.com Kyna Wongkyna.wong@citi.com Karen Huangkaren.xw.huang@citi.com Yiming Li, CFAyiming.li@citi.com SeeAppendixA-1forAnalystCertification,ImportantDisclosuresandResearchAnalystAffiliations Notfordistribution in the People's Republic of China,excludingthe Hong Kong Special AdministrativeRegion and QualifiedForeign Institutional Investors. Greater China Semiconductors: Sector Re-Rating Lifts Valuations Across the Board: Model Update GreaterChinaSemiconductors:China'sNewRmb2tnAllnvestmentPlanPositiveforDomesticAlSupplyChainGreaterChinaSemiconductors:TheNewTauism:Huawei'sTauScalingAdvancesChipPerformance Short-TermViewonJCETGroup(600584.SS)Direction:Upside JCETGroupValuation We set our target price for JCET at Rmb110based on a 6.Ox2027EP/B.We believe the China OSAT industry is entering an thus awarding JCETapremiumvaluation as akey enablerforadvancedpackaging.Weexpectindustry capacityutilizationtoremaintightgiventherobustdemand.Risks Keydownsideriskstoourtargetprice include:1)advancedpackaging expansion outpacingdemandgrowth,especiallygiven challenges at thefront-end; 2)memorymakers internalizingback-end packaging operations; 3)fallingutilization afterindustrycapacityexpansion;4)geopoliticaltensionsreducingdemandforJCET'soverseasoperations;5)USexportrestrictionslimitingsupplyofback-end equipment. TianshuiHuatian(002185.SZ;Rmb20.98;1;24Jun26;15:00) ValuationWe set our target price forTSHT at Rmb23.5based on a 4.0x2027EP/B.We believe the China OSAT industry is entering an thus awardingTSHTa premiumvaluation overits historical range.Weexpect industrycapacityutilizationtoremaintightgiventhe robust demand. Risks Keydownsideriskstoourtargetpriceinclude:1)Alcapexslowdowncastingconcerns oversubsequentOsATdemand;2)fallingutilizationafterindustrycapacityexpansion; 3)geopoliticaltensionsreducing demandforTSHT's overseas operations;4)USexportrestrictionslimitingsupplyofback-endequipment. TongFuMicroelectronics(002156.SZ;Rmb74.64;1;24Jun26;15:00) ValuationWe set our target price for TFME at Rmb80 based on a 6.5x2027EP/B.Webelieve the China OSAT industry is entering an unprecedented upcycledrivenby Al proliferation,tightening industrysupply,andgrowing emphasis on advanced packaging.thus awardingTFMEa premiumvaluationasakeyenablerforadvancedpackaging.TFMEis alsopositionedfora stronggrowthtrajectorysupportedbyrobustdemandfromkeycustomerAMD. Risks Key downside risks to ourtarget price include: 1)market shareloss at thekey customerfor exclusion of Al-related business; 2)memory makers internalizing back-end packaging operations; 3)falling utilization after industry capacity expansion; 4)geopolitical tensions reducingdemand for TFME's overseas operations; 5)US export restrictions limiting supply ofback-endequipment. US+1-210-677-3788 Appendix A-1 Theresearchanalystsprimarilyresponsibleforthepreparationand contentofthisresearchreportareeither(i)designated by"Ac"intheauthorblockor(ii)listedinboldalongsidecontentwhichis attributabletothatanalyst.IfmultipleAcanalystsaredesignatedintheauthorblock,eachanalystiscertifyingwithrespecttotheentireresearchreportotherthan(a)contentattributabletoanotherACcertifyinganalystlistedinboldalongsidethecontentand(b)viewsexpressedsolelywith respecttoaspecificissuerwhichareattributableto anotherAc certifyinganalyst identifiedinthepricechartsorratinghistorytablesforthatissuershownbelow.Eachoftheseanalysts certify,withrespecttothesectionsofthereportforwhichtheyareresponsible:(1)thattheviewsexpressedthereinaccuratelyreflecttheirpersonalviewsabouteachissuerandsecurityreferencedandwerepreparedinanindependentmanner,includingwithrespecttoCitigroup GlobalMarketsInc.and itsaffiliates;and (2)nopartoftheresearchanalyst'scompensationwas,is,orwill be,directlyorindirectly,relatedtothe specificrecommendations orviewsexpressedbythatresearchanalystinthisreport.IMPORTANTDISCLOSURES servicesprovidedwerenon-investment-banking,securities-related:JCETGroupCitigroupGlobal MarketsInc.or itsaffiliates currentlyhas,orhad withinthepast12months