Equity Research: Jingsheng Electromechanical (300316.SZ)

Date: October 27, 2025
Rating: BUY (Maintained)
Current Price: CNY 40.15
Target Price: Implied by Valuation Multiples (See Section 5)
Analysts: Zhou Ershuang, Li Wenyi

Executive Summary

Jingsheng Electromechanical (hereinafter referred to as "Jingsheng" or the "Company"), a leading provider of crystal growth equipment and materials in China, reported its third-quarter financial results for 2025 on October 27, 2025. The report highlights a pivotal inflection point in the Company’s operational trajectory. While the broader photovoltaic (PV) industry cycle continues to exert significant pressure on top-line revenue and year-over-year profitability, the third quarter (Q3) demonstrated a marked sequential recovery in net profit margins, driven by rigorous cost control measures and improved gross margins.

The core investment thesis for Jingsheng is undergoing a structural transition from a pure-play PV equipment vendor to a diversified semiconductor materials and equipment platform. Although the traditional PV business faces headwinds due to industry-wide overcapacity and delayed capital expenditures, the Company’s strategic pivot toward Silicon Carbide (SiC) substrates and advanced semiconductor equipment is gaining tangible momentum. Notably, the Company has successfully commissioned its first 12-inch semi-insulating SiC substrate pilot line, opening new application spaces in Augmented Reality (AR) glasses and CoWoS (Chip-on-Wafer-on-Substrate) interposers. Concurrently, the expansion of 8-inch conductive SiC substrate capacity positions Jingsheng to capitalize on the global industry shift from 6-inch to 8-inch wafers.

We maintain our BUY rating on Jingsheng Electromechanical. While we acknowledge the near-term earnings volatility reflected in our revised 2025-2027 earnings forecasts, we believe the market has not fully priced in the long-term growth potential of the Company’s semiconductor materials segment. The sequential improvement in Q3 profitability, combined with a robust order book in high-value semiconductor equipment and the impending volume ramp-up of SiC substrates, provides a compelling risk-reward profile for long-term institutional investors. The current valuation, while elevated on a trailing basis due to the cyclical trough in PV earnings, offers an attractive entry point for investors seeking exposure to the next generation of wide-bandgap semiconductor supply chains.

Key Takeaways

1. Financial Performance: Cyclical Trough with Sequential Profit Recovery

The Company’s financial results for the first three quarters of 2025 reflect the ongoing challenges in the downstream PV sector, yet Q3 data signals a stabilization in profitability metrics.

Top-Line Pressure Persists:
For the first nine months of 2025 (9M 2025), Jingsheng reported total operating revenue of CNY 8.27 billion, representing a year-over-year (YoY) decline of 42.9%. This contraction is primarily attributable to the slowdown in new orders and delayed revenue recognition from existing contracts in the PV equipment segment, as downstream clients navigate inventory adjustments and capacity utilization issues.

In Q3 2025 alone, revenue stood at CNY 2.474 billion, down 42.9% YoY and 7.0% quarter-over-quarter (QoQ). The sequential decline in revenue suggests that the bottoming process in the PV equipment cycle is still underway, with order confirmations remaining subdued.

Profitability Inflection in Q3:
Despite the top-line weakness, the Company demonstrated significant operational resilience in profit generation.
* 9M 2025 Net Profit: Attributable net profit to shareholders was CNY 901 million, a YoY decrease of 69.6%. Deducted non-recurring net profit was CNY 755 million, down 74.1% YoY.
* Q3 2025 Net Profit: The standout metric for the quarter was the sequential recovery. Q3 attributable net profit reached CNY 262 million, a YoY decline of 69.7%, but a remarkable QoQ increase of 296.5%. Similarly, deducted non-recurring net profit for Q3 was CNY 219 million, down 73.4% YoY but surging 473.1% QoQ.

This dramatic QoQ improvement in net profit, despite a slight QoQ revenue decline, underscores the effectiveness of the Company’s cost optimization strategies and a favorable shift in product mix towards higher-margin segments.

Margin Expansion:
* Gross Margin: Q3 2025 gross margin was 29.21%. While this represents a 3.0 percentage point (pct) decline YoY, it marks a significant 8.6 pct improvement QoQ. This sequential jump indicates that the Company has successfully mitigated some of the pricing pressures in the PV sector through efficiency gains and potentially higher contributions from semiconductor-related businesses.
* Net Profit Margin: Q3 2025 sales net margin was 9.9%, down 9.8 pct YoY but up 7.6 pct QoQ. The widening gap between gross and net margin compression YoY reflects the operating leverage impact of lower revenue volumes, but the QoQ recovery suggests that fixed cost absorption is improving as production stabilizes.

Source: Company Reports, Dongwu Securities Institute

2. Balance Sheet & Cash Flow: Working Capital Normalization Amidst Cycle Downturn

The balance sheet dynamics in Q3 2025 reflect the typical characteristics of a capital goods company navigating a downstream demand slump. The contraction in contract liabilities and inventory levels indicates a digestion phase in the order cycle.

Contract Liabilities and Inventory Decline:
* Contract Liabilities: As of the end of Q3 2025, contract liabilities stood at CNY 2.95 billion, a substantial 55.2% YoY decrease. Contract liabilities serve as a leading indicator for future revenue recognition in equipment manufacturing. The sharp decline confirms that new order intake has slowed significantly compared to the peak cycles of previous years. However, it also implies that the backlog is being executed, albeit at a slower pace.
* Inventory: Total inventory was CNY 8.348 billion, down 33.5% YoY. This reduction suggests that the Company is actively managing stock levels to align with lower production schedules and is likely converting work-in-progress into finished goods for delivery. The destocking process helps mitigate the risk of inventory impairment in a falling price environment.

Cash Flow Volatility:
* Operating Cash Flow (OCF): For 9M 2025, net operating cash flow was CNY 380 million, a 56.8% YoY decline. More critically, the single-quarter OCF for Q3 2025 turned negative at -CNY 67 million, marking a reversal from both the previous quarter and the same period last year.
* Drivers of Negative Q3 OCF: The negative cash flow in Q3 is primarily attributed to a decrease in cash received from the sale of goods and provision of services. This is consistent with the revenue decline and the timing of customer payments. In the equipment industry, cash collection often lags revenue recognition, and during downturns, customers may extend payment terms, exacerbating working capital pressures. However, given the Company’s strong historical cash generation capabilities and healthy balance sheet, this short-term liquidity fluctuation is viewed as cyclical rather than structural.

Source: Company Reports, Dongwu Securities Institute

3. Strategic Growth Engine: Silicon Carbide (SiC) Substrate Acceleration

The most compelling aspect of Jingsheng’s investment case lies in its aggressive expansion and technological breakthroughs in the Silicon Carbide (SiC) substrate business. SiC is a critical material for power electronics in electric vehicles (EVs), renewable energy inverters, and increasingly, data center applications. Jingsheng is positioning itself as a key player in both conductive and semi-insulating SiC substrates.

A. Conductive SiC Substrates: Capacity Expansion and 8-Inch Leadership

The global SiC market is currently undergoing a technological transition from 6-inch to 8-inch wafers. This shift is driven by the need for higher throughput and lower cost-per-chip for EV manufacturers. Jingsheng has strategically aligned its capacity expansion to capture this trend.

• Current and Planned Capacity:

  • Existing Capacity: The Company currently has 300,000 pieces per year of crystal pulling capacity for SiC substrates.
  • New Expansion: Jingsheng is constructing an additional 600,000 pieces per year of 8-inch capacity.
  • Total Future Capacity: Upon completion, the total planned capacity will reach 900,000 pieces per year.
  • International Footprint: In Malaysia, the Company has planned an annual cutting, grinding, and polishing capacity of 240,000 pieces. This overseas expansion not only diversifies geographic risk but also positions Jingsheng closer to international device manufacturers, potentially bypassing trade barriers and serving global supply chains more effectively.

• First-Mover Advantage in 8-Inch:
  Jingsheng’s focus on 8-inch substrates provides a distinct competitive edge. As major domestic and international device manufacturers begin to shift their production lines from 6-inch to 8-inch, suppliers with established 8-inch yield and volume capabilities will secure preferential supplier status. Jingsheng’s early commitment to 8-inch R&D and capacity build-out allows it to benefit from this structural industry shift. The "first-mover" advantage is critical in semiconductor materials, where qualification cycles are long and sticky. Once qualified, suppliers tend to maintain long-term relationships with fabs.

B. Semi-Insulating SiC Substrates: Unlocking New Applications with 12-Inch Technology

Beyond the traditional power electronics market, Jingsheng is pioneering the use of semi-insulating SiC substrates in advanced packaging and optical applications. This diversification reduces reliance on the cyclical EV market and opens up high-margin niche segments.

• 12-Inch Pilot Line Commissioning:
  The Company has successfully commissioned its first 12-inch semi-insulating SiC substrate pilot line. This is a significant technological milestone. Semi-insulating SiC is essential for radio frequency (RF) devices and, increasingly, for advanced packaging interposers.

• New Application Drivers:

  1. AR/VR Glasses: The lightweight and high thermal conductivity properties of SiC make it an ideal substrate for micro-display drivers and power management units in Augmented Reality (AR) glasses. As the consumer electronics industry pivots towards spatial computing, demand for high-performance, compact semiconductor components is expected to surge.
  2. CoWoS Interposers: Recent industry developments, including reports that NVIDIA’s next-generation GPUs may utilize SiC interposers in Chip-on-Wafer-on-Substrate (CoWoS) packaging, highlight the potential for SiC in high-performance computing (HPC). SiC interposers offer superior thermal management compared to traditional organic or silicon interposers, addressing the heat dissipation challenges of advanced AI chips. Jingsheng’s 12-inch capability positions it to supply these large-format substrates required for advanced packaging.

This dual-track strategy—scaling 8-inch conductive substrates for mass-market EVs and developing 12-inch semi-insulating substrates for high-end computing and AR—creates a balanced growth portfolio that mitigates sector-specific risks.

4. Semiconductor Equipment & Components: Broadening the Platform

Jingsheng is leveraging its core competencies in crystal growth and precision manufacturing to expand its semiconductor equipment and components portfolio. This segment serves as a technology moat, providing recurring revenue streams and deepening customer stickiness.

A. Large Silicon Wafers (Silicon Epitaxy & Processing)

The Company offers comprehensive solutions for large-scale silicon wafer production, including crystal pulling, slicing, grinding, and polishing equipment. As China continues to pursue self-sufficiency in large-diameter silicon wafers (particularly 12-inch), Jingsheng’s integrated equipment lineup positions it as a primary beneficiary of domestic substitution trends.

B. Advanced Packaging Equipment

Recognizing the growing importance of advanced packaging in Moore’s Law continuation, Jingsheng has expanded its product suite beyond traditional thinning machines.
* Ultra-Fast UV Laser Grooving Equipment: The launch of this new equipment addresses the need for precise dicing and structuring in advanced packaging processes, such as those used in 3D stacking and heterogeneous integration. This product enhances the Company’s value proposition to OSATs (Outsourced Semiconductor Assembly and Test) and IDMs (Integrated Device Manufacturers) focusing on advanced nodes.

C. Advanced Process Equipment

• 12-Inch Silicon Reduced-Pressure Epitaxial Growth Equipment: The successful sales shipment of this equipment marks a breakthrough in high-end epitaxial tools. Epitaxial growth is a critical step in producing high-quality wafers for logic and memory chips. Breaking into this segment, traditionally dominated by international giants like AIXTRON and ASM International, demonstrates Jingsheng’s technological prowess and ability to compete in the most demanding segments of the semiconductor supply chain.

D. SiC Equipment Ecosystem

Jingsheng is not just a materials supplier but also a key enabler for the broader SiC industry through its equipment offerings. The Company has developed a full suite of SiC processing equipment:
* Crystal Growth: 6-8 inch SiC crystal furnaces.
* Processing: Slicing, thinning, and polishing equipment.
* Epitaxy: SiC epitaxial growth reactors.
* Ion Implantation: Prototype debugging stage. Ion implantation is a complex and high-value step in SiC device fabrication. Progress in this area indicates deep R&D capabilities.
* Thermal & Inspection: SiC oxidation/activation furnaces and optical inspection equipment have already achieved batch shipments. This recurring equipment revenue supports the Company’s top line even when substrate sales are ramping up.

E. Semiconductor Components: Jinghong Precision

The subsidiary, Jinghong Precision, focuses on the manufacturing of critical semiconductor components. This vertical integration strategy ensures supply chain security for Jingsheng’s own equipment while creating an independent revenue stream by supplying other domestic equipment makers and FABs.
* Capabilities: Specialized welding, precision assembly, and semiconductor-grade surface treatment.
* Product Portfolio: Ultra-large vacuum chambers, spindles, ceramic disks, and other critical parts.
* Customer Base: Batch supply to leading domestic equipment manufacturers and FAB end-users. This diversifies the customer base beyond Jingsheng’s internal needs and embeds the Company deeper into the national semiconductor infrastructure.

Risks / Headwinds

While the long-term outlook for Jingsheng is positive, institutional investors must carefully weigh the following risks, which could impact short-to-medium term performance and valuation multiples.

1. Downstream Application Expansion Below Expectations

The core bullish thesis relies heavily on the rapid adoption of SiC substrates in new applications (AR, CoWoS) and the continued growth of the EV market.
* EV Market Slowdown: If the global adoption rate of electric vehicles slows down due to macroeconomic factors, charging infrastructure delays, or consumer preference shifts, the demand for conductive SiC substrates could fall short of projections.
* New Tech Adoption Risk: The use of SiC in AR glasses and CoWoS interposers is still in the early stages. If technical hurdles persist or if alternative materials (such as advanced organics or glass interposers) prove more cost-effective, the anticipated demand for 12-inch semi-insulating SiC may not materialize as quickly as expected.

2. Technological R&D Risks

The semiconductor industry is characterized by rapid technological iteration and high R&D intensity.
* Yield Challenges: Scaling up 8-inch SiC substrate production while maintaining high yields and low defect densities is technically challenging. Any delays in achieving commercial-grade yields could erode margins and delay revenue recognition.
* Competitive Obsolescence: Competitors, both domestic (e.g., Tianyue Advanced, SICC) and international (e.g., Wolfspeed, Onsemi, Rohm), are also investing heavily in 8-inch and larger formats. If Jingsheng fails to keep pace with technological advancements or cost reductions, it could lose market share.
* Equipment Development Delays: The development of complex equipment like ion implanters carries inherent execution risks. Failure to meet performance specifications or delivery timelines could damage customer relationships and reputation.

3. Photovoltaic Industry Cyclical Downturn

Although Jingsheng is diversifying, the PV equipment segment still constitutes a significant portion of its historical revenue base.
* Prolonged Overcapacity: If the PV industry’s overcapacity situation persists longer than anticipated, downstream clients may continue to defer capital expenditures, cancel orders, or demand aggressive price concessions. This would continue to pressure Jingsheng’s top-line growth and gross margins in the near term.
* Asset Impairment: A prolonged downturn could necessitate further inventory write-downs or impairment of fixed assets related to PV equipment manufacturing, impacting net profit.

4. Geopolitical and Trade Risks

• Export Controls: As a supplier of advanced semiconductor equipment and materials, Jingsheng could be subject to export controls or trade restrictions, particularly regarding its international expansion in Malaysia and potential sales to global clients.
• Supply Chain Disruptions: Dependence on specific imported raw materials or components for its equipment business could pose risks if geopolitical tensions disrupt supply chains.

5. Financial and Liquidity Risks

• Cash Flow Volatility: The negative operating cash flow in Q3 2025 highlights the sensitivity of the Company’s liquidity to working capital cycles. If receivables collection periods lengthen further or if inventory destocking stalls, cash flow pressures could intensify, potentially limiting flexibility for future CAPEX or R&D investment.
• Valuation Compression: Given the high P/E ratios projected for 2025-2027 (52x, 42x, 34x respectively), the stock is sensitive to any miss in earnings expectations. A failure to deliver the anticipated sequential profit improvements or SiC volume ramp could lead to multiple compression.

Rating / Sector Outlook

Investment Rating: BUY (Maintained)

We maintain our BUY rating on Jingsheng Electromechanical. This rating reflects our confidence in the Company’s strategic transformation and its leading position in the emerging SiC materials market, despite the near-term headwinds in the PV sector.

Rationale for Rating:
1. Sequential Profit Improvement: The Q3 2025 results demonstrate that the Company can maintain profitability even in a downturn through cost control and operational efficiency. The nearly 300% QoQ increase in net profit is a strong signal of bottoming.
2. Structural Growth in SiC: The planned capacity expansion to 900,000 pieces/year and the breakthrough in 12-inch semi-insulating substrates provide clear visibility for long-term revenue growth. The shift to 8-inch aligns with global industry trends, securing Jingsheng’s relevance in the next decade of power electronics.
3. Diversified Revenue Streams: The expansion into semiconductor equipment (epitaxy, packaging, ion implantation) and components (Jinghong Precision) reduces reliance on any single product line or customer segment, enhancing business resilience.
4. Valuation Context: While the forward P/E of 52x for 2025 appears high, it is distorted by the cyclical trough in PV earnings. Looking to 2026 and 2027, the P/E compresses to 42x and 34x, respectively, which is more reasonable for a high-growth semiconductor materials platform. Investors should look through the 2025 earnings dip to the normalized earnings power in 2026-2027.

Sector Outlook: Semiconductor Materials & Equipment

The broader semiconductor materials and equipment sector in China is poised for sustained growth, driven by:
* Domestic Substitution: Continued policy support and supply chain security concerns are accelerating the adoption of domestic equipment and materials in Chinese fabs.
* Wide-Bandgap Semiconductor Boom: The global transition to SiC and GaN for power efficiency in EVs, renewables, and data centers creates a secular tailwind for companies like Jingsheng.
* Advanced Packaging Demand: The rise of AI and HPC is driving demand for advanced packaging solutions, creating opportunities for equipment providers specializing in thinning, dicing, and interposer technologies.

However, the sector remains vulnerable to global macroeconomic fluctuations and geopolitical tensions. Investors should favor companies with proven technological capabilities, diversified customer bases, and strong balance sheets—criteria that Jingsheng meets.

Investment View

1. Earnings Forecast and Valuation Analysis

Based on the Q3 2025 results and our assessment of the order confirmation rhythm, we maintain our earnings forecasts for the next three years. We anticipate a gradual recovery in profitability as the PV cycle stabilizes and the SiC business scales.

Profit Forecast (2025-2027E):

Source: Dongwu Securities Institute Estimates

Analysis of Forecasts:
* 2025E: We project a significant decline in revenue (-31.5%) and net profit (-59.9%) for the full year 2025. This reflects the lag effect of the PV downturn and the time required for the SiC business to contribute meaningfully to the bottom line. The high P/E of 52x is a function of depressed earnings, not necessarily overvaluation.
* 2026E: We expect a return to growth, with revenue increasing by 8.7% and net profit by 23.9%. This recovery is driven by the baseline stabilization of PV equipment demand and the initial volume contribution from the new 8-inch SiC capacity.
* 2027E: Growth accelerates further, with revenue up 13.1% and net profit up 23.4%. By this period, the SiC substrate business should be a major profit driver, and the semiconductor equipment segment should have gained greater traction. The P/E ratio normalizes to 34x, reflecting a more mature growth profile.

Valuation Methodology:
We employ a relative valuation approach, comparing Jingsheng’s P/E multiples to its historical average and peers in the semiconductor equipment and materials sector. Given the Company’s unique position as a platform company spanning PV, SiC materials, and semiconductor equipment, a premium valuation is justified relative to pure-play PV equipment vendors. The target price is implicitly supported by the expectation that the market will re-rate the stock as the SiC revenue share increases, shifting the perception from a cyclical machinery stock to a growth-oriented semiconductor materials stock.

2. Core Investment Logic

A. Counter-Cyclical Resilience and Operational Excellence
Jingsheng’s ability to deliver a 296.5% QoQ profit increase in Q3 2025, amidst a 42.9% YoY revenue drop, is a testament to its operational excellence. This demonstrates that the Company is not merely a passive participant in the industry cycle but an active manager of its cost structure and product mix. For institutional investors, this resilience reduces the downside risk during the trough of the PV cycle.

B. The "Second Curve": SiC Substrate Volume Ramp
The transition from R&D to mass production in SiC substrates is the key catalyst for the stock. With 900,000 pieces of planned capacity and a focus on 8-inch wafers, Jingsheng is well-positioned to capture market share as the industry standard shifts. The commissioning of the 12-inch semi-insulating line adds an optionality value, linking the Company’s fortunes to the high-growth AI and AR sectors. Investors should monitor quarterly updates on SiC shipment volumes and yield rates as key leading indicators.

C. Vertical Integration and Platform Synergies
Jingsheng’s business model exhibits strong synergies. The equipment business drives innovation in materials processing, while the materials business provides real-world feedback for equipment improvement. The components subsidiary (Jinghong Precision) further strengthens this ecosystem by securing the supply chain and generating external revenue. This integrated platform approach creates high barriers to entry for competitors and enhances customer stickiness.

D. Domestic Substitution Tailwinds
In the context of China’s push for semiconductor self-sufficiency, Jingsheng is a national champion in crystal growth technology. Its success in developing 12-inch silicon epitaxial equipment and SiC processing tools aligns with national strategic priorities, potentially granting it access to policy support, subsidies, and preferential procurement from state-backed fabs.

3. Investment Strategy and Catalysts

Recommended Strategy:
We recommend accumulating positions on dips, viewing the current valuation as an attractive entry point for long-term holders. The near-term volatility caused by PV cycle concerns provides buying opportunities for investors with a 12-24 month horizon.

Key Catalysts to Monitor:
1. SiC Customer Qualifications: Announcements of major design wins or long-term supply agreements with leading EV manufacturers or semiconductor IDMs for 8-inch substrates.
2. 12-Inch Substrate Progress: Updates on the yield and commercialization timeline for the 12-inch semi-insulating SiC substrates, particularly any partnerships with AR device makers or advanced packaging firms.
3. Semiconductor Equipment Orders: Significant orders for the 12-inch reduced-pressure epitaxial equipment or ion implantation prototypes from major Chinese fabs.
4. PV Cycle Turning Point: Signs of stabilization in PV module prices and an uptick in new equipment orders from downstream PV clients, which would accelerate the earnings recovery.
5. Quarterly Margin Trends: Continued sequential improvement in gross and net margins in Q4 2025 and Q1 2026, confirming the sustainability of the Q3 recovery.

4. Conclusion

Jingsheng Electromechanical stands at a critical juncture, transitioning from a dominant PV equipment supplier to a diversified semiconductor materials and equipment platform. While the 2025 financial results reflect the pain of the PV downcycle, the sequential profit recovery in Q3 and the strategic advancements in SiC technology provide a clear path forward.

The Company’s proactive capacity expansion in 8-inch SiC substrates, coupled with its pioneering work in 12-inch semi-insulating materials for AI and AR applications, positions it to capture significant value in the next wave of semiconductor innovation. The risks associated with the PV cycle and R&D execution are real but are outweighed by the long-term structural growth opportunities in wide-bandgap semiconductors and domestic substitution.

We maintain our BUY rating, believing that Jingsheng offers a compelling combination of near-term operational resilience and long-term strategic growth. Institutional investors should view the current earnings trough as a temporary phase in a broader upward trajectory, driven by the Company’s successful diversification into high-value semiconductor markets.

Appendix: Detailed Financial Tables

Income Statement Summary (CNY Million)

Balance Sheet Highlights (CNY Million)

Cash Flow Statement Summary (CNY Million)

Key Valuation Metrics

Disclaimer

This report is prepared by Dongwu Securities Co., Ltd. (hereinafter referred to as "the Company") and is intended solely for the use of the Company's clients. The Company does not consider recipients of this report as clients by virtue of their receipt thereof. Under no circumstances shall the information or opinions expressed in this report constitute investment advice to any person, and the Company and its authors shall not be liable for any consequences arising from the use of the content herein. Any written or oral promise to share securities investment returns or bear securities investment losses is invalid.

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Investment Rating Standards:
Investment ratings are based on analysts' expectations of the relative performance of the industry or company return potential against the benchmark within 6 to 12 months after the report release date.
A-Share Benchmark: CSI 300 Index
Hong Kong Market Benchmark: Hang Seng Index
US Market Benchmark:* S&P 500 Index

Company Investment Ratings:
Buy: Expected individual stock price change relative to the benchmark is above 15% in the next 6 months.
Outperform: Expected individual stock price change relative to the benchmark is between 5% and 15% in the next 6 months.
Neutral: Expected individual stock price change relative to the benchmark is between -5% and 5% in the next 6 months.
Underperform: Expected individual stock price change relative to the benchmark is between -15% and -5% in the next 6 months.
Sell:* Expected individual stock price change relative to the benchmark is below -15% in the next 6 months.

Industry Investment Ratings:
Outperform: Expected industry index to outperform the benchmark by more than 5% in the next 6 months.
Neutral: Expected industry index to perform between -5% and 5% relative to the benchmark in the next 6 months.
Underperform:* Expected industry index to underperform the benchmark by more than 5% in the next 6 months.

Please note that different securities research institutions adopt different rating terms and standards. We use a relative rating system, indicating the relative weight of investment recommendations. Investors' decisions to buy or sell securities should fully consider their own specific circumstances, such as specific investment purposes, financial status, and specific needs, and fully understand and use the content of this report. This report should not be regarded as the sole factor in making investment decisions.