Equity Research Report: Jingsheng Electromechanical (300316.SZ)

Date: October 2025 (Based on report context implying mid-2025 data availability)
Analyst: Wu Wenji (SAC: S1340523050004), Zhai Yimeng (SAC: S1340525040003)
Institution: China Post Securities Research Institute
Rating: BUY (Maintained)
Current Price: CNY 38.09
Target Price: Not explicitly stated, but implied upside based on valuation multiples and growth trajectory.
Market Cap: CNY 49.9 Billion

Executive Summary

Jingsheng Electromechanical (hereinafter referred to as "Jingsheng" or the "Company"), a global leader in crystal growth equipment and advanced materials, is undergoing a strategic pivot that positions it at the forefront of the next generation of semiconductor innovation. While the Company has historically been dominated by its leadership in photovoltaic (PV) crystal growth equipment, our analysis highlights a decisive shift toward high-value compound semiconductor materials, specifically Silicon Carbide (SiC). This transition is not merely incremental but represents a fundamental restructuring of the Company’s revenue quality and long-term growth drivers.

The core investment thesis rests on two pillars: technological breakthroughs in 12-inch SiC substrate manufacturing and the successful localization and market penetration of comprehensive SiC equipment solutions. The Company has successfully overcome critical technical barriers in growing 12-inch conductive SiC crystals, a feat that places it among a select few global players capable of supplying next-generation substrates. Furthermore, the anticipated adoption of SiC interposers in NVIDIA’s future Rubin GPU architecture—potentially by 2027—underscores the strategic urgency and immense value potential of mastering SiC processing technologies. Jingsheng is not only preparing for this demand through aggressive capacity expansion in Shangyu, Yinchuan, and Malaysia but is also securing its supply chain dominance by verticalizing equipment production, including epitaxy, thinning, and ion implantation tools.

Financially, the Company is navigating a transitional period. Our forecasts indicate a contraction in reported revenue and net profit for 2025, primarily due to the cyclical downturn in the traditional PV equipment sector and the high R&D/CapEx intensity of the new SiC ventures. However, we project a robust recovery starting in 2026, with net attributable profits expected to grow by 21.5% in 2026 and 22.2% in 2027. The backlog of over CNY 3.7 billion in semiconductor equipment orders provides a visible runway for this recovery. Despite near-term margin pressure, the Company’s strong balance sheet, improving cash flow generation, and decreasing leverage ratio support its aggressive expansion plans.

We maintain our BUY rating on Jingsheng Electromechanical. The current valuation, while reflecting near-term earnings volatility, does not fully price in the optionality and monopoly-like advantages the Company is building in the 8-inch and 12-inch SiC substrate market. For institutional investors, Jingsheng offers a rare combination of established cash-generating capabilities in PV and high-growth exposure to the AI-driven semiconductor material revolution. The risk-reward profile is favorable for long-term holders who can withstand short-term cyclicality in exchange for exposure to a critical bottleneck in the advanced packaging and power semiconductor supply chains.

Key Takeaways

1. Strategic Breakthrough in 12-Inch SiC Substrates: Capturing the Next-Gen AI Hardware Wave

The most significant catalyst for Jingsheng’s re-rating is its technological prowess in large-diameter Silicon Carbide (SiC) crystal growth. As artificial intelligence workloads intensify, thermal management in advanced packaging has become a critical bottleneck. Industry leaders are actively seeking solutions beyond traditional silicon interposers.

• The NVIDIA Catalyst: According to industry developments cited in our research, NVIDIA’s roadmap for its next-generation Rubin processors involves a potential shift from silicon to SiC for the intermediate substrate in CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging. While the first generation of Rubin GPUs may still utilize silicon substrates, the thermal limits of silicon necessitate a transition to SiC for subsequent iterations, with widespread adoption expected no later than 2027. TSMC is currently collaborating with major vendors to develop SiC interposer manufacturing technologies. This trend validates the strategic importance of SiC not just in power electronics (EVs, grid) but in high-performance computing (HPC).
• Technological Moat: Jingsheng has achieved a monumental technical milestone by successfully growing 12-inch conductive SiC crystals. This achievement required overcoming severe challenges related to temperature field uniformity and crystal cracking during the growth process. The Company’s proprietary innovations in crystal growth furnace design, gas-phase raw material distribution, and thermal field engineering have enabled this breakthrough.
• Competitive Advantage: The ability to produce 12-inch substrates significantly reduces the cost per chip compared to 6-inch or 8-inch wafers, offering a compelling economic advantage to downstream customers. By mastering this technology early, Jingsheng positions itself as a key supplier for the next wave of AI hardware infrastructure, diversifying its customer base beyond traditional power semiconductor firms.

2. Aggressive Global Capacity Expansion and Internationalization

To capitalize on the surging demand for SiC substrates, Jingsheng is executing a multi-pronged capacity expansion strategy that enhances both scale and global supply chain resilience.

• Domestic Scale-Up:
  • Shangyu Project: The Company is establishing a production base in Shangyu with an annual capacity of 300,000 SiC substrates. This facility serves as a core hub for domestic supply.
  • Yinchuan Project: A massive expansion in Yinchuan is underway, targeting an annual capacity of 600,000 units of 8-inch SiC substrate配套 (supporting) crystals. This vertical integration ensures a stable supply of high-quality raw crystals for substrate processing, reinforcing cost competitiveness.
• International Footprint (Malaysia):
  • Recognizing the global nature of the semiconductor supply chain and the need to mitigate geopolitical risks for international clients, Jingsheng is constructing an 8-inch SiC substrate industrialization project in Penang, Malaysia.
  • This move is strategic for several reasons: it aligns with the trend of semiconductor manufacturing diversification in Southeast Asia; it facilitates closer collaboration with international IDM (Integrated Device Manufacturer) and foundry partners; and it enhances the Company’s ability to serve global customers who require non-China supply sources.
• Customer Validation Progress: The Company has significantly expanded its sample delivery scope for 8-inch SiC substrates. Validation progress with global clients is proceeding smoothly, and Jingsheng has already secured batch orders from certain international customers. This commercial traction confirms that the technical specifications of Jingsheng’s products meet the stringent requirements of top-tier global semiconductor manufacturers.

3. Dominance in SiC Equipment: Vertical Integration and Import Substitution

Jingsheng’s business model is uniquely fortified by its dual role as both a material supplier and an equipment manufacturer. This vertical integration creates a self-reinforcing cycle of innovation and cost control.

• Comprehensive Equipment Portfolio: The Company has developed a full suite of SiC processing equipment, including:
  • Crystal Growth Furnaces: Proprietary designs that enable the 12-inch breakthrough.
  • Processing Tools: Grinding, cutting, thinning, chamfering, polishing, cleaning, and inspection equipment.
  • Advanced Process Tools: Epitaxy furnaces, ion implanters, activation annealing furnaces, and oxidation furnaces.
• Market Leadership in Epitaxy: Jingsheng’s 6-8 inch SiC epitaxy equipment has achieved significant import substitution, capturing a leading market share in China. Key customers include industry heavyweights such as Hantian Chengcheng, Dongguan Tianyu, Xilian Integrated Circuit, and Silan Micro. This dominance in epitaxy equipment not only generates direct revenue but also provides deep insights into process optimization, which feeds back into the Company’s own substrate manufacturing efficiency.
• Expansion into Front-End Processes: The Company is actively promoting its 8-inch SiC epitaxy equipment and 6-8 inch thinning equipment, capitalizing on the industry-wide transition from 6-inch to 8-inch platforms. Furthermore, validation efforts for oxidation, activation, and ion implantation equipment are progressing well. These tools represent higher value-added segments of the equipment market, and their successful commercialization will further diversify Jingsheng’s revenue streams.
• Strong Order Backlog: As of June 30, 2025, the Company’s outstanding contracts for integrated circuit and compound semiconductor equipment exceeded CNY 3.7 billion (tax-inclusive). This substantial backlog provides high visibility into future revenue and underscores the strong demand for domestically produced semiconductor equipment amidst ongoing localization trends.

4. Financial Transition: Navigating the Cyclical Trough to Capture Structural Growth

Our financial analysis reveals a company in transition. The short-term financial metrics reflect the headwinds in the legacy PV business and the heavy investment phase of the new SiC ventures, but the long-term trajectory points toward sustainable profitability and improved margins.

• Revenue and Profit Forecast:
  • 2024 Actuals: Revenue of CNY 17.58 billion (-2.26% YoY) and Net Attributable Profit of CNY 2.51 billion (-44.93% YoY). The decline was driven by slower PV capex cycles and increased competition.
  • 2025 Estimate: We project Revenue to decline to CNY 12.03 billion (-31.55% YoY) and Net Attributable Profit to drop to CNY 1.04 billion (-58.51% YoY). This sharp contraction is anticipated due to the delayed recognition of some PV orders, aggressive pricing in the mature PV equipment market, and high R&D/expenses associated with SiC ramp-up.
  • 2026-2027 Recovery: We forecast a return to growth in 2026, with Revenue reaching CNY 12.98 billion (+7.86%) and Net Profit rising to CNY 1.26 billion (+21.48%). By 2027, Revenue is expected to hit CNY 14.00 billion (+7.88%) with Net Profit reaching CNY 1.55 billion (+22.24%).
• Margin Dynamics:
  • Gross Margin is expected to bottom out in 2025 at 25.7% (down from 33.4% in 2024) due to product mix shifts and initial low yields in new SiC lines.
  • However, we project a gradual improvement to 26.4% in 2026 and 27.0% in 2027 as SiC yields improve, economies of scale are realized, and higher-margin equipment sales contribute more significantly to the mix.
  • Net Margin follows a similar trajectory, recovering from 8.7% in 2025 to 11.0% in 2027.
• Cash Flow Strength: Despite the profit dip, operating cash flow remains robust. We forecast Operating Cash Flow of CNY 3.82 billion in 2025, significantly higher than the net profit, indicating strong working capital management and collection capabilities. This liquidity is crucial for funding the CapEx required for the Malaysia and Yinchuan projects without excessive debt accumulation.
• Balance Sheet Health: The Company maintains a prudent leverage profile. The Debt-to-Asset ratio is projected to decrease from 43.2% in 2024 to 39.0% in 2026, before slightly rising to 40.2% in 2027 to fund final stages of expansion. The Current Ratio remains healthy above 1.7x, ensuring short-term solvency.

5. Valuation Perspective

At the current price of CNY 38.09, the stock trades at a P/E of approximately 19.8x based on 2024 earnings. However, forward-looking valuations appear elevated due to the expected earnings trough in 2025:
* 2025E P/E: ~47.9x
* 2026E P/E: ~39.4x
* 2027E P/E: ~32.3x

While these multiples may seem high compared to traditional manufacturing peers, they are justified by:
1. High Growth Potential: The CAGR of net profit from 2025 to 2027 is approximately 21.8%.
2. Strategic Scarcity: Jingsheng is one of the few companies globally with verified 12-inch SiC crystal growth capability and a full-suite equipment portfolio.
3. Optionality Value: The potential inclusion in the NVIDIA supply chain or other major AI chipmakers’ substrate supplies represents a significant call option not fully reflected in base-case earnings models.
4. Sector Premium: Semiconductor equipment and advanced material companies typically command higher valuation multiples due to their technological moats and critical role in the supply chain.

We believe the market is currently underappreciating the speed of the SiC revenue ramp and the margin recovery potential post-2025. As the SiC business moves from pilot/validation to mass production, earnings visibility will improve, likely leading to multiple compression and price appreciation.

Detailed Business Analysis & Drivers

A. The Silicon Carbide (SiC) Revolution: From Niche to Mainstream

Silicon Carbide is a wide-bandgap semiconductor material that offers superior performance compared to traditional silicon, particularly in high-voltage, high-frequency, and high-temperature applications. Its adoption has been driven primarily by the electric vehicle (EV) industry, where SiC inverters extend driving range and reduce charging time. However, the application landscape is expanding rapidly.

1. The AI and Advanced Packaging Driver

The report highlights a critical emerging driver: Advanced Packaging for AI Chips.
* Thermal Challenge: As GPU power densities increase (e.g., NVIDIA’s Blackwell and upcoming Rubin architectures), heat dissipation becomes the primary limiter of performance. Traditional silicon interposers in CoWoS packages have thermal conductivity limits.
* SiC Solution: SiC has a thermal conductivity roughly 3-4 times higher than silicon. Using SiC as an interposer material allows for more efficient heat removal from the stacked dies, enabling higher clock speeds and sustained performance.
* Timeline: While the first-gen Rubin may use silicon, the industry consensus is shifting toward SiC for subsequent generations. Jingsheng’s early mastery of 12-inch SiC positions it to be a primary beneficiary of this structural shift. This transforms SiC from a "power-only" story to a "compute-and-power" story, significantly expanding the total addressable market (TAM).

2. 8-Inch Transition: The Cost Reduction Inflection Point

The semiconductor industry is currently transitioning from 6-inch to 8-inch SiC wafers.
* Economics: An 8-inch wafer has roughly 2.25x the area of a 6-inch wafer. However, due to edge exclusion and yield factors, the actual chip output increase is around 1.8-2.0x. This translates to a potential 30-40% reduction in cost per chip once yields mature.
* Jingsheng’s Position: The Company is aggressively promoting its 8-inch equipment and substrates. Its ability to supply both the equipment to make 8-inch wafers and the wafers themselves gives it a unique advantage in helping customers navigate this transition. The Malaysia plant is specifically targeted at this 8-inch volume market, catering to international IDMs who are accelerating their 8-inch adoption.

B. Equipment Business: The Backbone of Competitiveness

Jingsheng’s equipment business is not just a revenue stream; it is the R&D engine for its material business.

1. Vertical Integration Benefits

• Cost Control: By manufacturing its own crystal growth furnaces and processing tools, Jingsheng avoids the markup charged by third-party equipment vendors. This lowers the CapEx required for its own substrate factories, improving ROI.
• Process Optimization: Operating its own substrate lines allows Jingsheng to test and refine its equipment in real-time. Feedback loops between the material and equipment teams accelerate iteration cycles, leading to faster yield improvements and higher quality products. This "internal customer" model is a significant competitive moat against pure-play equipment makers or pure-play material suppliers.

2. Market Share and Localization

• Import Substitution: The Chinese government’s push for semiconductor self-sufficiency has created a favorable environment for domestic equipment makers. Jingsheng’s 6-8 inch epitaxy equipment is already a market leader, displacing foreign competitors like AIXTRON or LPE in the domestic market.
• New Product Launches: The ongoing validation of ion implanters, activation annealers, and oxidation furnaces expands Jingsheng’s share of wallet within customer fabs. Instead of buying epitaxy tools from Jingsheng and implanters from another vendor, customers can increasingly source entire process lines from Jingsheng, simplifying supply chain management and service support.

3. Order Visibility

The CNY 3.7 billion backlog in semiconductor equipment (as of June 2025) is a strong indicator of future revenue. Given the typical delivery and recognition timeline for such equipment, a significant portion of this backlog should convert to revenue in 2025 and 2026, providing a floor for the semiconductor segment’s performance even if PV equipment orders remain soft.

C. Photovoltaic (PV) Business: Cash Cow in Consolidation

While the focus is on SiC, the PV business remains a significant contributor to cash flow.
* Market Context: The global PV industry is experiencing a period of consolidation and overcapacity, leading to reduced capex from solar cell and module manufacturers. This has impacted Jingsheng’s PV equipment orders and pricing power.
* Strategy: Jingsheng is maintaining its leadership in mono-crystalline silicon growth furnaces but is focusing on efficiency improvements and cost reductions rather than aggressive expansion. The PV business is expected to stabilize, providing the steady cash flows needed to fund the high-growth SiC initiatives.
* Impact on Financials: The projected revenue decline in 2025 is largely attributable to the PV segment’s cyclical downturn. Investors should view this as a temporary drag rather than a structural decline, given the long-term global energy transition trends.

Financial Analysis and Projections

1. Income Statement Analysis

• Revenue Trajectory: The sharp drop in 2025 reflects the confluence of PV cyclicality and the ramp-up phase of SiC (where volumes are still building). The steady single-digit growth in 2026-2027 is driven by the maturation of SiC substrate sales and the continued delivery of semiconductor equipment.
• Margin Compression and Recovery: The gross margin dip to 25.7% in 2025 is a concern but is expected. New SiC lines typically have lower initial yields and higher fixed costs. As production scales and yields improve in 2026-2027, margins will expand. Additionally, the mix shift towards higher-margin equipment (epitaxy, implanters) will support overall profitability.
• Expense Management: R&D expenses are projected to remain high (CNY 1.2-1.3 billion annually), reflecting the Company’s commitment to innovation. This is a necessary investment to maintain its technological lead in 12-inch SiC and new equipment types. Administrative and selling expenses are kept relatively stable, indicating disciplined operational management.

2. Balance Sheet and Liquidity

• Solid Capital Structure: The Company maintains a conservative leverage profile. The decrease in the debt-to-asset ratio to 39.0% in 2026 suggests that internal cash generation and equity growth are outpacing debt accumulation.
• Asset Quality: Inventory levels remain high (CNY 10-11 billion), which is typical for equipment manufacturers with long production cycles and material suppliers holding raw stock. However, the steady turnover rates and strong order backlog mitigate the risk of inventory obsolescence.
• Liquidity: With a current ratio consistently above 1.7x and significant monetary funds (projected to reach CNY 6.5 billion by 2027), Jingsheng has ample liquidity to fund its Malaysia and Yinchuan expansions without resorting to dilutive equity financing or high-cost debt.

3. Cash Flow Statement

• Strong Operating Cash Generation: The projected surge in OCF to CNY 3.82 billion in 2025, despite lower net income, highlights the quality of earnings. This is likely driven by collections from previous years’ large orders and efficient working capital management.
• Sustained CapEx: Investing cash outflows remain significant (CNY 1.2-1.5 billion annually), reflecting the ongoing construction of SiC facilities. This CapEx is essential for future growth and is well-covered by operating cash flows.
• Free Cash Flow: The Company is generating positive free cash flow (OCF - CapEx) in 2025 and beyond, indicating financial self-sufficiency.

Risks / Headwinds

While the investment case is compelling, institutional investors must consider the following risks:

1. Industry Cyclicality and Demand Fluctuation

• PV Sector Downturn: The photovoltaic industry is highly cyclical. A prolonged downturn in solar capex could further depress Jingsheng’s traditional equipment revenue, offsetting gains from the semiconductor segment. If the PV recovery is slower than expected, the 2026-2027 revenue growth forecasts may be at risk.
• SiC Demand Volatility: While long-term trends are positive, short-term demand for SiC in EVs can fluctuate based on EV sales growth rates and consumer preferences. Any slowdown in EV adoption could delay the ramp-up of SiC substrate demand.

2. Intense Market Competition

• Substrate Competition: The SiC substrate market is becoming increasingly crowded. Domestic competitors (e.g., SICC, TankeBlue) and international giants (e.g., Wolfspeed, Onsemi, Rohm) are also expanding capacity. Price wars could erode margins, especially in the 6-inch and early 8-inch segments.
• Equipment Competition: In the equipment sector, Jingsheng faces competition from established international players and emerging domestic firms. Maintaining market share requires continuous innovation and competitive pricing, which could pressure profitability.

3. Technological and Execution Risks

• Yield Challenges: Scaling up 12-inch SiC crystal growth and 8-inch substrate processing is technically challenging. Failure to achieve high yields quickly could result in higher costs and delayed customer qualification.
• R&D Uncertainty: The development of new equipment (ion implanters, etc.) involves significant R&D risk. Delays in product validation or failure to meet customer specifications could impact the expected revenue from these new lines.
• Talent Retention: The semiconductor industry faces a shortage of skilled engineers and technicians. Loss of key technical personnel could hinder R&D progress and operational efficiency.

4. Geopolitical and Supply Chain Risks

• Export Controls: As a Chinese semiconductor company, Jingsheng is subject to evolving export controls and trade restrictions. Restrictions on the import of critical components or software for its equipment business could disrupt operations.
• International Expansion Risks: The Malaysia project involves navigating foreign regulatory environments, labor laws, and cultural differences. Execution risks in overseas projects are inherently higher than domestic ones.

5. Order Fulfillment and Customer Concentration

• Order Delays: Customers may delay or cancel orders due to their own financial constraints or changes in strategic direction. This could impact revenue recognition and cash flow.
• Customer Concentration: A significant portion of revenue may come from a few large customers. Loss of a key customer could have a disproportionate impact on financial performance.

Rating / Sector Outlook

Sector Outlook: Positive with Structural Shifts

The semiconductor equipment and materials sector is undergoing a profound transformation. The era of simple scaling is giving way to an era of material innovation and advanced packaging.
* Compound Semiconductors: SiC and Gallium Nitride (GaN) are transitioning from niche applications to mainstream adoption in EVs, renewable energy, and now, AI computing. This structural shift supports long-term growth for companies with strong technological capabilities in these materials.
* Localization Trend: In China, the drive for semiconductor self-sufficiency continues to provide a tailwind for domestic equipment and material suppliers. Government support and customer preference for local supply chains create a favorable operating environment.
* AI-Driven Demand: The explosion of AI workloads is creating new demand vectors for advanced materials and packaging solutions. Companies that can innovate in thermal management (like SiC interposers) and high-bandwidth memory interfaces are well-positioned for outsized growth.

Rating: BUY (Maintained)

We maintain our BUY rating on Jingsheng Electromechanical.

• Valuation Justification: While the forward P/E appears high, it reflects the temporary earnings trough in 2025. The projected earnings recovery in 2026-2027, combined with the strategic value of its SiC franchise, supports the current valuation.
• Catalysts:
  1. Successful Qualification: Announcement of major international customer qualifications for 8-inch/12-inch SiC substrates.
  2. NVIDIA/TSMC Developments: Confirmation of SiC interposer adoption in next-gen AI chips.
  3. Margin Improvement: Quarterly reports showing sequential margin expansion as SiC yields improve.
  4. Equipment Orders: Continued strong bookings in semiconductor equipment, particularly for new tool types.
• Investment Horizon: This is a medium-to-long-term investment. Short-term volatility is expected due to PV cyclicality, but the long-term trajectory is upward driven by the SiC revolution.

Investment View

Core Investment Logic

Jingsheng Electromechanical represents a unique investment opportunity in the Chinese semiconductor landscape. It is not merely an equipment vendor but a vertically integrated technology platform that spans from core crystal growth equipment to advanced material production. This integration provides a durable competitive advantage that is difficult for pure-play competitors to replicate.

1. First-Mover Advantage in 12-Inch SiC: The Company’s breakthrough in 12-inch conductive SiC crystals is a game-changer. As the industry moves towards larger wafers to reduce costs, Jingsheng is ahead of the curve. This technological lead translates into pricing power and preferred supplier status for next-generation applications, including AI advanced packaging.
2. Dual-Engine Growth Model: The Company effectively balances a mature, cash-generating PV business with a high-growth, high-potential SiC business. The cash flows from PV fund the R&D and CapEx for SiC, reducing reliance on external financing. As the SiC business scales, it will increasingly contribute to overall profits, improving the quality of earnings.
3. Global Supply Chain Resilience: The establishment of a production base in Malaysia demonstrates strategic foresight. It mitigates geopolitical risks and opens doors to international customers who are diversifying their supply chains. This global footprint enhances the Company’s long-term sustainability and market access.
4. Strong Execution Track Record: Jingsheng has a proven history of executing complex technology projects and scaling production. The successful commercialization of its PV equipment and the rapid progress in SiC validate its management’s execution capabilities.

Strategic Implications for Institutional Investors

For institutional portfolios, Jingsheng offers exposure to several megatrends:
* Electrification: Through SiC in EVs.
* Artificial Intelligence: Through SiC in advanced packaging for GPUs.
* Semiconductor Sovereignty: Through domestic equipment localization.

The current market pricing reflects skepticism about the near-term earnings dip. However, this skepticism creates an entry point for long-term investors who recognize the structural value of the Company’s SiC assets. The risk-reward ratio is skewed positively, given the limited downside supported by the PV cash cow and the significant upside potential from the SiC breakout.

Actionable Recommendations

1. Accumulate on Weakness: Given the expected earnings trough in 2025, any market-induced price weakness could provide an attractive entry point.
2. Monitor Key Metrics: Investors should closely track:
   • SiC Substrate Yields: Improvements in yield are the key driver of margin expansion.
   • International Customer Wins: Announcements of new batch orders from global IDMs.
   • Equipment Backlog Conversion: The rate at which the CNY 3.7 billion backlog converts to revenue.
   • PV Market Stabilization: Signs of recovery in PV capex could provide an additional upside surprise.
3. Long-Term Hold: Jingsheng is a core holding for investors seeking exposure to the Chinese semiconductor supply chain. The Company’s technological moats and strategic positioning suggest it will be a long-term winner in the compound semiconductor space.

Conclusion

Jingsheng Electromechanical is at the cusp of a major transformation. By leveraging its expertise in crystal growth to dominate the emerging SiC substrate and equipment markets, the Company is positioning itself as a critical enabler of the next generation of electronic devices, from electric vehicles to AI supercomputers. While near-term financials may appear volatile, the underlying business fundamentals are strengthening. The successful development of 12-inch SiC technology, the aggressive global capacity expansion, and the strong order backlog in semiconductor equipment provide a solid foundation for future growth. We believe the market has not fully appreciated the long-term value creation potential of Jingsheng’s SiC strategy. Therefore, we maintain our BUY rating, confident that the Company will deliver superior returns to shareholders over the medium to long term.

Appendix: Financial Data Summary

Profit and Loss Forecast

Key Financial Ratios

Balance Sheet Highlights

Cash Flow Highlights

Disclaimer: This report is based on information available as of the date of publication. Forecasts are subject to change based on market conditions and company performance. Investors should conduct their own due diligence before making investment decisions.