瑞银长电科技6005842026年上半年初步业绩超预期重申买入than2026071517页

Equities Stronger-than-expected preliminary H126results; reiterate Buy 12-month ratingBuy Raise earnings forecasts post solid H126 prelims We raise our 2026-28 EPS forecasts 16-18% to factor in the strong H1 prelim results andmultiple positive catalysts in the next two to three years, including a stronger globalsemiconductor cycle and JCET's improving product mix. According to JCET, reportedH126 net profit should be Rmb770-950m, up 64.5-101.7% YoY. Based on the mid-point of the earnings guidance, Q226 reported net profit was Rmb570m, up 113% YoYand 21% higher than Reuters consensus. We believe strong demand at its domestic andoverseas businesses contributed to the strong YoY earnings growth. We also believeJCET is a major beneficiary of global AI demand and reiterate our Buy rating. A beneficiary of overseas and domestic AI demand We have highlighted JCET as a major beneficiary of China's advanced semiconductorlocalisation and solid growth in overseas semis revenue. The company attributes thesolid earnings growth in H126 to: 1) AI infrastructure demand and structural growth inlead orders, and UTR improvement; 2) continued product mix improvements; and 3) costcontrol and operational efficiency improvements. In our view, strong demand fromdomestic and overseas customers for AI related applications (e.g. AI server PMIC, DSP, AIaccelerators, SoC) were the major drivers. Changes in earnings forecasts We factor the H126 preliminary results into our model and assume H226E revenue/netearnings will continue to follow the seasonality of the last three years (H1:H2 roughly1:2) and raise 2026E net earnings 17.8%. We raise our 2027/28 earnings forecasts16.0%/17.3%, respectively, to factor in: 1) the stronger global semi cycle (UBS expectsglobal semis industry sell-in revenue to grow 46% YoY to US$2.38trn in 2027E); and 2) ahigher margin 2027-28E based on a better product mix. Jimmy YuAnalystjimmy.yu@ubs.com+86-21-3866 8880 Sunny LinAnalystsunny.lin@ubs.com+886-2-8722 7346 Valuation: raise price target to Rmb135.00 from Rmb79.50 Our new PT is based on: 1) our 16-18% higher earnings forecasts in 2026-28; 2) rollingover to an average 2027-28E BVPS from 2027E BVPS; 3) a higher target P/BV multiple of6.5x from 4.2x, roughly in line with major global outsourced semiconductor assemblyand test (OSAT) averages (see page 3). We believe JCET deserves a higher P/BV thanmajor domestic OSAT peers (average 2027-28E 5.6x P/BV, ex outlier SJSemi), given itsleadingmarket position (No.3 globally and No.1 among Chinese peers),strongadvanced packaging capability, and more diversified customer base that has higherexposure to first-tier global IC design and IDM customers. Our target P/BV multiple ishigher than the historical average (2.6x since 2015), as the global semi industry isexperiencing an unprecedented upcycle, and we expect a significantly higher ROE of13.2% in 2026-29E vs. 5.4% in 2014-25. Yongwei LaiAnalystS1460524110001yongwei.lai@ubs.com+86-21-3866 8780 Thesis MapUBS Research THESIS MAPa guide to our thinking and what´s where in this report Pivotal Questions Q: Can JCET accelerate revenue growth in 2026-28?Yes. We expect JCET's revenue growth to accelerate to 20%/20%/16% in 2026/27/28E, after 8% YoY growth in 2025, due to: 1) substantial upside in advanced packaging demand for China's AIdevelopment; 2) a continued favourable global semi cycle; and 3) China's accelerating localisation ofhigh-end semiconductors. Q: Will AI and advanced packaging drive JCET's revenue growth?Yes. We believe JCET is set to benefit from its broad coverage of leading HPC and edge AI applications for global customers, while its its 2.5D/3D packaging products for domestic customers could beanother revenue driver over the long term. Q: Will JCET's profitability improve in 2026-28?Yes. We expect JCET's ROE to improve to 15.2% in 2028E from 5.6% in 2025, mainly due to: 1) an estimated higher UTR based on the industry upcycle; 2) an improved product mix (e.g. a risingcontribution from advanced packaging); and 3) a modest pricing recovery. UBSVIEW OSAT is one of the few sectors in China's semiconductor industry with a relatively large market share(c30% combined) and a narrow technology gap with industry leaders (e.g. advanced packaging). Weraise 2026-28E earnings 16-18%, to factor in the advanced packaging business opportunity,accelerating localisation in high-end semiconductors and a stronger global semiconductor cycle. Weexpect these multiple positives to underpin JCET's BVPS growth by supporting earnings forecastupgrades over 2026-28E, as well as improved ROE in the period. EVIDENCE 1) According to JCET's H126 preliminary results, reported net profit should be Rmb770-950m, up64.5-101.7% YoY. Based on the mid-point of the earnings guidance, Q226 reported net profit wasRmb570m, up 113% YoY. 2) In Q126, combined revenue of major A-share China AI acceleratorcompanies rose 99% YoY, while inventory increased 79% vs. 2024. 3) We flag conti