Laplace (688726.SH): Leading PV Cell Equipment Beneficiary of Tech Iteration & Global Expansion; SiC Equipment Builds Second Growth Curve

Rating: Outperform (Initiation)
Date: March 24, 2026
Analysts: Zhou Ershuang (S0600515110002), Li Wenyi (S0600524080005)
Source: Dongwu Securities Research Institute

Executive Summary

Laplace (688726.SH) has established itself as a dominant player in the N-type photovoltaic (PV) cell equipment sector, leveraging its technological leadership in Low-Pressure Chemical Vapor Deposition (LPCVD) and diffusion processes. The company is deeply integrated into the supply chains of industry giants such as LONGi Green Energy, Jinko Solar, and Aiko Solar. Despite short-term headwinds from industry-wide capacity oversupply, Laplace has demonstrated robust resilience, achieving a Compound Annual Growth Rate (CAGR) of 245% in revenue from 2020 to 2024.

We initiate coverage with an "Outperform" (增持) rating. Our investment thesis rests on three pillars:
1. Technological Moat in Next-Gen PV: As TOPCon efficiency approaches theoretical limits, the industry is pivoting toward Back Contact (BC/XBC) technologies. Laplace’s LPCVD equipment is critical for Tunneling Oxide Passivated Contact (TOPCon) and even more vital for Tandem BC (TBC) structures, where equipment value per GW is expected to double (from ~RMB 30-40mn/GW to ~RMB 70-90mn/GW). With over 100GW of planned BC capacity among leading manufacturers, Laplace is poised to capture significant market share.
2. Second Growth Curve in Semiconductors: The company has successfully diversified into Silicon Carbide (SiC) power device equipment, specifically high-temperature oxidation and annealing furnaces. Having secured batch orders from key clients like BYD and Basic Semiconductor, this high-margin segment offers substantial long-term growth potential driven by the electrification of vehicles and renewable energy infrastructure.
3. Valuation Appeal: We forecast net profits of RMB 612mn, RMB 845mn, and RMB 1.06bn for 2025-2027, respectively. At current prices, the stock trades at forward P/E multiples of 43x, 31x, and 25x for 2025-2027, which is attractive relative to peers given its superior growth trajectory and technological barriers.

Key Takeaways

1. Company Overview: From PV Specialist to Platform Equipment Provider

1.1 Business Evolution and Core Competencies
Founded in 2016, Laplace has evolved through three distinct phases:
* R&D Exploration (2016-2019): Focused on thermal processing and coating technologies, successfully developing LPCVD and boron diffusion equipment and entering the supply chains of LONGi and Jinko.
* Scale-up (2020-2021): Achieved rapid order growth and delivery scaling as N-type technologies gained traction.
* Mass Commercialization (2022-Present): Capitalized on the规模化 (scale-up) of TOPCon and BC technologies, resulting in sustained revenue expansion. By end-2025, the company employed over 2,000 staff, with R&D personnel comprising more than 50% of the workforce.

Laplace’s product matrix covers core processes in high-efficiency PV cell manufacturing, including:
* Thermal Processing: Boron/Phosphorus diffusion, oxidation, and annealing furnaces.
* Coating/Deposition: LPCVD (flagship product), PECVD, and ALD.
* Automation: Integrated handling systems for diffusion and coating lines.

In the semiconductor sector, the company provides equipment for SiC device manufacturing, including oxidation furnaces, annealing furnaces, vertical/horizontal LPCVD, and vacuum brazing equipment, covering key thermal and thin-film steps from wafer fabrication to substrate packaging.

1.2 Shareholding Structure and Management Team
Control: Dr. Lin Jiaji, the founder and Chairman, controls 29.88% of voting rights (directly holding 8.55% and indirectly via Anshi New Energy and Fourier Partnership).
* Strategic Alignment: Liancheng Numerical Control holds 15.18%, making it the largest shareholder. Its actual controller, Li Chun’an, acts in concert with LONGi Green Energy’s controllers. This structural link reinforces Laplace’s deep binding with LONGi, its largest customer (accounting for significant revenue in 2020, 2023, and 2024).
* Technical Depth:* The management team is highly qualified, with 5 PhDs and 4 Masters among senior executives. Dr. Lin Jiaji (NTU Singapore, Applied Physics) leads a R&D team of over 500 experts, fostering a robust IP portfolio with 60+ authorized invention patents attributed to him alone.

2. Financial Performance: Resilience Amidst Cyclical Headwinds

2.1 Revenue and Profit Trends
Laplace has exhibited exceptional growth, driven by the industry-wide shift to N-type cells.
* Historical Growth: Revenue surged from modest levels in 2020 to RMB 5.73 billion in 2024, representing a 4-year CAGR of 245%. Net profit reached RMB 729 million in 2024, up 77.5% YoY.
* 2025 Adjustment: Reflecting the broader PV industry’s cyclical adjustment and supply-demand imbalance, 2025 revenue is estimated at RMB 5.46 billion (-4.7% YoY), with net profit at RMB 612 million (-16.1% YoY). This decline is primarily attributed to stage-specific imbalances in the PV supply chain and asset impairment provisions.

(Source: Dongwu Securities Estimates)

2.2 Profitability and Cost Control
Gross Margin Stability: Gross margins have stabilized around 30%. In 2025 Q1-Q3, the gross margin was 31.24%, with a notable rebound in Q3 to 35.08% due to a higher proportion of high-margin XBC and advanced thermal processing equipment deliveries.
* Expense Efficiency:* Period expense ratios dropped significantly from 144.8% in 2020 to 10.7% in 2024, driven by economies of scale and optimized financial management. R&D intensity remains high, with R&D expenses reaching RMB 281 million in 2025 Q1-Q3 (6.5% of revenue), focusing on XBC and semiconductor innovations.

2.3 Balance Sheet Health
Contract Liabilities & Inventory: Contract liabilities peaked at RMB 5.67 billion in 2023 amid the TOPCon expansion boom but declined to RMB 3.17 billion by 2025 Q3 due to slower new orders. Inventory has similarly adjusted downward as the company accelerates acceptance of shipped goods.
* Cash Flow:* Operating cash flow faced pressure in 2024-2025 due to industry downturns and payment cycles, turning negative in recent quarters (e.g., -RMB 28 million in 2025 Q3). However, the company maintains a solid liquidity position, supported by strong receivables collection efforts.

3. Industry Context: Navigating the PV Cycle and Global Shifts

3.1 Supply-Demand Imbalance and Policy Catalysts
The global PV industry is transitioning from "high-speed expansion" to "high-quality competition."
* Capacity Oversupply: Global module capacity exceeds 1,000GW, far outstripping the neutral forecast of 500GW new installations in 2026. China, producing 86% of global modules (627GW in 2024), faces intense domestic competition.
* Price Pressure: TOPCon module prices fell from RMB 1.43/W in July 2023 to RMB 0.74/W in January 2026, squeezing margins and accelerating the exit of inefficient产能 (capacity).
* Policy Support for Advanced Capacity: The Chinese Ministry of Industry and Information Technology (MIIT) revised guidelines in November 2024, raising efficiency standards (N-type cell efficiency ≥26%) and capital requirements (minimum 30% equity for new projects). This供给侧改革 (supply-side reform) favors leaders with advanced technology like Laplace, while phasing out backward capacity.

3.2 Overseas Expansion: The "Go Global" Opportunity
Despite trade barriers, Chinese equipment makers are benefiting from overseas capacity build-out through two channels:
1. Local Manufacturing by Foreign Entities: Direct equipment sales to overseas PV manufacturers.
2. Chinese EPC and Module Makers Going Abroad: Chinese firms building factories overseas to bypass tariffs, bringing their preferred Chinese equipment suppliers along ("borrowing ships to go to sea").

Key Regional Dynamics:
* United States: Driven by AI data center power needs and localization policies (IRA subsidies, Section 301 tariffs). Tesla’s plan for 100GW of ground-mounted PV and local manufacturing (Buffalo plant targeting 10GW final capacity) highlights the demand for localized, tariff-compliant supply chains. While installation subsidies (ITC) are retreating, manufacturing incentives remain, favoring equipment that enables cost-effective local production.
* Middle East & North Africa (MENA): Rich solar resources and national energy transition goals (e.g., Saudi Vision 2030) are driving demand. MESIA forecasts MENA installations rising from 5GW in 2024 to 35GW in 2030. Chinese leaders like Jinko and TCL Zhonghuan are establishing large-scale bases in Saudi Arabia (10GW cell/module, 20GW ingot/wafer), creating direct equipment opportunities.
* Southeast Asia & India: Continued capacity additions in Vietnam, Malaysia, and India (targeting 280-320GW by 2030) provide steady demand for battery and module lines.

4. Core Investment Logic: The BC/XBC Technology Supercycle

4.1 The Shift from TOPCon to BC/XBC
While TOPCon currently dominates with ~42-54% market share (depending on the specific deposition route), its efficiency is nearing the crystalline silicon single-junction limit (~28%). The next generation of high-efficiency cells relies on Back Contact (BC) and Heterojunction (HJT) technologies.
* BC Technology Advantage: By moving all electrodes to the rear, BC cells eliminate front-side shading, boosting optical utilization and short-circuit current ($J_{sc}$). It serves as a "platform technology" compatible with PERC (P-IBC), TOPCon (TBC), and HJT (HBC).
* Market Momentum: Leading firms are aggressively pivoting. LONGi targets 50GW of HPBC 2.0 capacity by end-2025. Aiko Solar has 10GW ABC capacity in full production and is expanding. Total planned BC capacity across the industry exceeds 100GW.

4.2 TBC: The High-Value Driver for Laplace
Tandem BC (TBC), which combines TOPCon’s passivation with BC’s structure, is emerging as a leading commercial route due to its compatibility with existing TOPCon lines and high efficiency potential (Aiko’s ABC cells reach 26.5% mass production efficiency).

Crucially, TBC significantly increases equipment value per GW:
* Process Complexity: TBC requires dual-sided P/N passivation structures on the rear, necessitating multiple high-temperature annealing and deposition steps.
* LPCVD Demand Surge: Unlike TOPCon’s single-layer n-poly deposition, TBC requires both n-poly and p-poly layers. This doubles the number of deposition runs and increases the number of reaction chambers required (from 4-6 to 8-12 per line).
* Investment Intensity:
* TOPCon: LPCVD + Thermal equipment investment ≈ RMB 30-40 million/GW.
* TBC: LPCVD + Thermal equipment investment ≈ RMB 70-90 million/GW.
* Implication: The equipment value proposition for Laplace’s core LPCVD products nearly doubles in the TBC era.

4.3 Laplace’s Competitive Edge in LPCVD
Laplace holds a distinct technological lead in LPCVD, the bottleneck process in TOPCon/TBC lines:
1. Throughput Leadership: Laplace’s LPCVD tools achieve a throughput of 9,425 wafers/hour (550MW/year), surpassing competitors like NAURA (9,200 wafers/hr) and JieJia WeiChuang (5,900 wafers/hr). This directly lowers customers’ CAPEX per GW.
2. Dual-Insert Horizontal Process: An innovative design that doubles wafer loading per furnace compared to traditional single-insert methods. The horizontal placement ensures uniform heat distribution and reduced wrap-around deposition, enhancing film quality and yield.
3. Customer Stickiness: Laplace is the exclusive or primary supplier for LONGi’s LPCVD needs and has deep ties with Jinko and Aiko. As these clients ramp up BC capacity, Laplace is the natural beneficiary.

5. Second Growth Curve: Silicon Carbide (SiC) Semiconductor Equipment

5.1 Market Tailwinds
The global SiC power device market is exploding, driven by Electric Vehicles (EVs) and PV inverters.
* Market Size: Yole forecasts the conductive SiC power device market to reach $8.9 billion by 2027, growing at a 31% CAGR (2021-2027). EVs will account for ~79% of this demand.
* Performance Benefits: SiC devices offer lower switching losses, higher operating temperatures, and higher power density compared to Silicon IGBTs, crucial for EV range extension and inverter efficiency (boosting PV inverter efficiency from 96% to >99%).

5.2 Laplace’s Strategic Entry
SiC manufacturing relies heavily on high-temperature processes, where Laplace’s core competencies in thermal processing translate directly:
* Key Processes: Ion implantation (requires high-temp annealing to repair lattice damage and activate ions) and Gate Oxidation (requires high-temp oxidation to form high-quality SiO₂ layers for threshold voltage control).
* Product Fit: Laplace offers high-temperature oxidation furnaces and annealing furnaces tailored for SiC. These are critical, high-barrier steps in SiC MOSFET production.
* Commercial Progress: The company has successfully entered the supply chains of BYD and Basic Semiconductor, securing batch orders. Although semiconductor revenue is currently small (<1% of total), its gross margin (~38% in 2025 H1) is significantly higher than PV equipment, offering a potent profit lever as volumes scale.

6. Valuation and Investment Recommendation

6.1 Earnings Forecast Assumptions
* PV Equipment: Assuming a mild recovery in 2026-2027 as outdated capacity clears and BC adoption accelerates. Revenue growth projected at -6% (2025), +15% (2026), and +25% (2027). Gross margin stabilizing at 27% due to product mix optimization (higher BC share).
* Semiconductor Equipment: Conservative growth assumptions (-8%, +5%, +10%) reflecting the early stage of market penetration, but with expanding margins (28-29%) as high-value products gain traction.
* Services & Parts: Steady growth (20-25%) driven by the installed base, providing recurring revenue stability.

6.2 Relative Valuation
We compare Laplace with leading platform-type PV equipment manufacturers: Jingsheng Mechanical & Electrical, Maxwell Technologies, Dier Laser, JieJia WeiChuang, Autowell, and Liancheng Numerical Control.

(Data as of March 23, 2026)

Laplace trades at a discount to the peer average on a forward P/E basis, despite its superior exposure to the high-growth BC technology cycle and the emerging SiC semiconductor segment. Given its technological moat in LPCVD and the doubling of equipment value in TBC lines, we believe the current valuation does not fully reflect its growth potential.

Recommendation: Outperform (增持).
Target Price Implication: Based on 2026 earnings estimates and a target P/E of 35-40x (consistent with high-growth tech equipment peers), the stock offers significant upside potential from current levels.

Risks / Headwinds

1. Downstream Installation and Expansion Misses: The company’s revenue is heavily dependent on PV capex. If global PV installations fall short of expectations (e.g., due to policy changes in the US/Europe or grid connectivity issues) or if downstream manufacturers delay capacity expansion due to prolonged profitability pressures, Laplace’s order book could shrink.
2. Technology R&D Delays: The transition to BC and HJT involves complex process integration. If Laplace fails to meet the stringent uniformity and yield requirements for next-gen BC lines, or if competing technologies (e.g., pure HJT or Perovskite tandem) gain unexpected traction without requiring Laplace’s specific LPCVD strengths, market share could erode.
3. Semiconductor Segment Execution Risk: The SiC equipment market is dominated by international giants (Applied Materials, Lam Research). If Laplace’s products fail to achieve consistent reliability in high-volume manufacturing or if customer validation cycles are prolonged, the anticipated second growth curve may materialize slower than expected.
4. Geopolitical and Trade Barriers: Increasing trade restrictions (e.g., US Section 301 tariffs, EU investigations) could hinder the ability of Chinese PV manufacturers to export, indirectly reducing their capex willingness. While overseas localization helps, it also introduces execution risks in foreign jurisdictions.
5. Cash Flow Pressure: With contract liabilities declining and operating cash flow turning negative in recent quarters, any further deterioration in working capital management or customer payment delays could strain liquidity, although current cash reserves remain adequate.

Rating / Sector Outlook

Sector Outlook: Neutral to Positive (Long-Term Structural Growth)
The PV equipment sector is currently in a consolidation phase. Short-term sentiment is dampened by overcapacity and price wars. However, the long-term outlook remains robust due to:
* Global Energy Transition: Persistent demand for clean energy supports multi-TW cumulative installation targets.
* Technological Obsolescence Cycle: The rapid iteration from P-type to N-type (TOPCon) and now to BC/HJT creates a continuous replacement cycle for equipment. Leaders with proprietary tech (like Laplace) will gain share at the expense of generic equipment providers.
* Semiconductor Localization: The push for domestic substitution in China’s semiconductor supply chain provides a secular tailwind for local equipment makers.

Company Rating: Outperform (增持)
Laplace is uniquely positioned to outperform the sector average due to its specific exposure to the high-value BC technology upgrade and its successful diversification into SiC. The risk-reward profile is favorable at current valuations.

Investment View

Why Buy Laplace Now?

1. Asymmetric Upside from BC Adoption: The market has largely priced in the slowdown of TOPCon expansion but has not fully appreciated the value accretion associated with the shift to TBC/BC. With equipment investment per GW doubling for LPCVD-heavy BC lines, Laplace’s revenue per unit of customer capacity is set to increase structurally. As LONGi, Aiko, and others execute their 100GW+ BC plans, Laplace’s order quality and volume should improve markedly in 2026-2027.

2. Proven Technological Moat: Laplace is not just a participant but a leader. Its LPCVD throughput (9,425 wafers/hr) and dual-insert horizontal process are industry benchmarks. In a cost-sensitive environment, customers will prioritize equipment that offers the lowest Levelized Cost of Electricity (LCOE) through higher throughput and yield. Laplace’s tech directly addresses this need.

3. Diversification De-risks the PV Cycle: The nascent but high-margin SiC business provides a hedge against PV cyclicality. As EV adoption continues to rise globally, the demand for SiC power modules will grow independently of solar cycles. Laplace’s entry into BYD’s supply chain validates its technical capability in this demanding sector.

4. Valuation Safety Margin: Trading at ~31x 2026E P/E, Laplace is cheaper than many high-growth peers despite having clearer visibility on earnings recovery driven by tech iteration. The balance sheet, while showing some cash flow pressure, is manageable, and the strong backlog (even if declining) provides a revenue floor.

Strategic Monitoring Points for Investors:
* BC Capacity Ramp: Track the actual installation and ramp-up rates of LONGi’s HPBC and Aiko’s ABC lines. Faster ramps will accelerate Laplace’s equipment recognition.
* SiC Order Book: Monitor announcements of new semiconductor clients beyond BYD/Basic Semiconductor. Expansion into other IDMs or foundries would signal broader market acceptance.
* Gross Margin Trend: Watch for sustained gross margins above 30% in upcoming quarters, which would confirm the successful mix shift towards high-value BC and SiC equipment.

Conclusion:
Laplace represents a high-quality bet on the next phase of PV technology evolution. While the industry navigates short-term pain, Laplace’s technological leadership in LPCVD and strategic pivot to SiC position it to emerge stronger from the cycle. We recommend institutional investors accumulate positions on weakness, targeting a medium-to-long-term horizon as the BC supercycle unfolds.

Appendix: Detailed Financial Forecasts

Income Statement Forecast (RMB Million)

Balance Sheet Highlights (RMB Million)

Cash Flow Forecast (RMB Million)

(Note: All financial data and forecasts are sourced from Dongwu Securities Research Institute. Currency is RMB unless otherwise stated.)

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