Naura Technology (002371 CH)

Naura reported FY25 revenue of RMB39.4bn, up 31% YoY and broadly in line with our and Bloomberg consensus, while net profit declined 1.8% YoY to RMB5.5bn, below expectations due to heavier R&D investment and opex associated with increased hiring and Kingsemi consolidation. While 4Q margin came under pressure, we view this primarily as a result of intensified product validation rather than deterioration in end demand. Encouragingly, the Company continued to deliver strong top-line momentum on robust IC equipment growth (50%+ YoY) and ongoing product expansion into higher-value process steps. We remain positive on Naura's positioning as a core beneficiary of China's WFE localization trend and domestic foundry capex expansion. Maintain BUY and raise TP to RMB540, based on 35x 2027E P/E (prev. 35x 2026E P/E), as we look through near-term margin headwinds and focus on the sequential recovery and the anticipated earnings inflection in 2027E.

Naura's etching and deposition segment revenue both exceeded RMB10bn in FY25, driving IC equipment revenue growth of more than 50% YoY, per mgmt. We believe this performance shows Naura's strengthening position in China's domestic WFE supply chain. Looking ahead, new product offerings such as 12-inch PVD, vertical furnace systems and HBM-related hybrid bonding solutions should support deeper penetration into logic, memory and advanced packaging, providing a broader and higher-quality growth runway into 2026E and beyond. We expect IC equipment sales to grow by over 40% YoY in 2026E.

Near-term profitability softened on investment and validation but should improve as scale benefits emerge. Naura's 4Q margins were pressured by elevated component upgrade costs during client validation for new products and weaker profitability in non-IC segments such as PV. At the same time, Naura continued to invest aggressively for future growth, with R&D expenses up 46% YoY and admin expenses rising 102% YoY following the Kingsemi consolidation and headcount expansion. We expect profitability to improve progressively as validated tools move into volume production, product mix shifts further toward IC equipment, and operating leverage strengthens into 2H26.

Maintain BUY with TP revised to RMB540, based on its three-year historical forward average P/E. We remain bullish on China's WFE sector, as accelerating domestic substitution and sustained capex from logic and memory foundries continue to reinforce a strong multi-year growth backdrop. With the most comprehensive WFE portfolio among domestic peers, Naura is positioned to capture this opportunity across a broadening range of process steps. We expect margin expansion to reaccelerate from 2027E onward, driven by a more favorable mix shift toward higher-margin advanced-node products and stronger operating leverage as scale continues to build.

Building for the next leg of WFE growth

Earnings Summary

(YE 31 Dec)

FY24A

FY25A

FY26E

FY27E

FY28E

Revenue (RMB mn)

30,075

39,353

51,977

65,752

81,559

YoY growth(%)

36.2

30.9

32.1

26.5

24.0

Gross margin(%)

42.9

40.1

40.1

41.5

43.0

Net profit (RMB mn)

5,621.8

5,522.0

7,739.4

11,048.9

15,594.7

YoY growth(%)

44.2

(1.8)

40.2

42.8

41.1

EPS(Reported)(RMB)

7.83

7.64

10.71

15.30

21.59

P/E(x)

60.2

61.6

44.0

30.8

21.8

ROE(%)

20.3

16.1

18.7

22.1

25.0

Source: Company data, Bloomberg, CMBIGM estimates

BUY (Maintain)

Target Price RMB540.00

(Previous TP RMB460.00)

Up/Downside 14.6%

Current Price RMB471.23

China Semiconductors

Kevin ZHANG

(852)37618727

kevinzhang@cmbi.com.hk

Aaron GUO

(852) 3916 3715

aaronguo@cmbi.com.hk

Stock Data

Mkt Cap (RMB mn)

340,387.8

Avg 3 mths t/o (RMB mn)

3,682.8

52w High/Low (RMB)

523.88/299.42

Total Issued Shares (mn)

722.3

Source: FactSet

Shareholding Structure

Beijing Sevenstar Huadian Technology Gro

33.6%

Beijing Electronics Holding

9.4%

Source: Bloomberg

Share Performance

Absolute

Relative

1-mth

0.5%

-5.8%

3-mth

-8.4%

-11.2%

6-mth

17.8%

3.2%

Source: FactSet

12-mth Price Performance


Source: FactSet


Figure 1: Earnings revision

New

Old

Diff(%)

RMBmn

FY26E

FY27E

FY28E

FY26E

FY27E

FY28E

FY26E

FY27E

FY28E

Revenue

51,977

65,752

81,559

49,588

59,236

N/A

4.8%

11.0%

N/A

Gross profit

20,851

27,316

35,082

21,174

25,649

N/A

-1.5%

6.5%

N/A

Net profit

7,739

11,049

15,595

9,399

11,502

N/A

-17.7%

-3.9%

N/A

EPS(RMB)

10.71

15.30

21.59

13.03

15.95

N/A

-17.8%

-4.1%

N/A

Gross margin

40.1%

41.5%

43.0%

42.7%

43.3%

N/A

-2.6ppt

-1.8ppt

N/A

Net margin

14.9%

16.8%

19.1%

19.0%

19.4%

N/A

-4.1ppt

-2.6ppt

N/A

Source: Company data, CMBIGM estimates

Figure 2: CMBIGM estimates vs. BBG consensus

CMBIGM

BBG Consensus

Diff(%)

RMBmn

FY26E

FY27E

FY28E

FY26E

FY27E

FY28E

FY26E

FY27E

FY28E

Revenue

51,977

65,752

81,559

51,002

65,354

82,362

1.9%

0.6%

-1.0%

Gross profit

20,851

27,316

35,082

20,560

26,047

32,777

1.4%

4.9%

7.0%

Net profit

7,739

11,049

15,595

8,225

11,062

15,554

-5.9%

-0.1%

0.3%

EPS(RMB)

10.71

15.30

21.59

11.35

15.27

19.59

-5.6%

0.2%

10.2%

Gross margin

40.1%

41.5%

43.0%

40.3%

39.9%

39.8%

-0.2ppt

1.7ppt

3.2ppt

Net margin

14.9%

16.8%

19.1%

16.1%

16.9%

18.9%

-1.2ppt

-0.1ppt

0.2ppt

Source: Bloomberg consensus, CMBIGM estimates

Figure 3: Forward P/E chart


Source: Bloomberg data, CMBIGM estimates

Figure 4: P/E band


Source: Bloomberg data, CMBIGM estimates

Figure 5: Peers table

Mkt Cap

(US$mn)

P/E(x)

FY26E

GPM%

FY26E

GPM%

FY27E

GPM%

FY28E

Domestic peers

AMEC

688012 CH

28,873

62.0

44.3

32.8

41.0

41.5

40.7

PIOTECH

688072 CH

16,185

67.3

46.7

31.5

41.2

43.2

41.7

ACMR

688082 CH

11,085

37.4

29.9

20.9

48.5

48.9

48.2

Average

55.6

40.3

28.4

43.6

44.6

43.5

Overseas peers

ASML

ASML NA

569,721

40.2

30.8

26.7

52.6

54.0

55.1

TEL

8035 JT

131,337

30.4

26.1

22.9

45.2

47.2

48.1

Lam Research

LRCX US

334,171

42.9

32.6

28.9

49.6

49.7

50.2

Average

46.7

35.1

27.3

46.4

47.4

47.3

Source: Bloomberg consensus as of 17 Apr 2026, CMBIGM


Financial Summary

INCOME STATEMENT

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec (RMB mn)

Revenue

22,079

30,075

39,353

51,977

65,752

81,559

Cost of goods sold

(13,005)

(17,162)

(23,571)

(31,127)

(38,435)

(46,477)

Gross profit

9,075

12,913

15,782

20,851

27,316

35,082

Operating expenses

(4,627)

(6,366)

(9,980)

(12,322)

(14,911)

(17,729)

Selling expense

(167)

(179)

(237)

(287)

(330)

(369)

SG&A expense

(2,836)

(3,265)

(5,069)

(5,925)

(6,970)

(7,993)

R&D expense

(2,475)

(3,699)

(5,435)

(7,173)

(9,074)

(11,255)

Others

852

777

762

1,063

1,462

1,887

Operating profit

4,448

6,546

5,802

8,528

12,405

17,353

Other income

22

22

51

0

0

0

Other expense

(4)

(35)

(8)

0

0

0

Pre-tax profit

4,466

6,533

5,845

8,528

12,405

17,353

Income tax

(433)

(819)

(436)

(636)

(926)

(1,295)

After tax profit

4,033

5,714

5,409

7,892

11,480

16,058

Minority interest

134

92

(113)

152

431

463

Net profit

3,899

5,622

5,522

7,739

11,049

15,595

BALANCE SHEET

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec (RMB mn)

Current assets

38,226

46,669

59,321

67,285

81,490

105,909

Cash & equivalents

12,451

12,396

17,337

15,718

21,620

35,134

Account receivables

3,767

6,236

8,217

10,296

13,123

15,926

Inventories

16,992

23,635

28,627

36,185

39,633

46,954

Prepayment

1,480

909

863

980

1,168

1,466

Other current assets

3,535

3,494

4,277

4,106

5,946

6,429

Non-current assets

15,399

19,696

30,480

34,667

40,030

46,648

PP&E

3,352

6,314

7,568

7,795

8,132

8,551

Right-of-use assets

215

241

268

224

209

203

Deferred income tax

450

712

1,239

1,406

1,676

2,104

Intangibles

2,547

4,710

10,520

13,008

15,944

19,395

Goodwill

27

38

2,386

2,386

2,386

2,386

Other non-current assets

8,808

7,681

8,498

9,848

11,683

14,008

Total assets

53,625

66,366

89,801

101,952

121,521

152,556

Current liabilities

19,083

23,805

26,180

38,792

45,978

58,330

Short-term borrowings

23

94

319

7,920

9,711

13,759

Account payables

6,117

10,276

11,803

16,339

18,411

23,609

Tax payable

209

384

586

665

792

995

Other current liabilities

3,418

5,577

7,491

7,078

8,970

9,806

Contract liabilities

8,317

6,220

4,291

4,872

5,807

7,290

Accrued expenses

999

1,253

1,690

1,919

2,287

2,871

Non-current liabilities

9,717

10,021

19,693

11,910

13,636

17,415

Long-term borrowings

5,835

3,946

12,973

4,390

4,827

6,562

Bond payables

0

0

0

0

0

0

Deferred income

4

1

487

487

487

487

Other non-current liabilities

3,877

6,074

6,233

7,034

8,323

10,367

Total liabilities

28,800

33,826

45,873

50,702

59,614

75,745

Share capital

530

534

725

725

725

725

Retained earnings

8,776

13,895

18,802

25,940

36,167

50,608

Other reserves

15,061

16,653

18,200

18,231

18,231

18,231

Total shareholders equity

24,367

31,082

37,726

44,896

55,122

69,563

Minority interest

458

1,458

6,202

6,354

6,785

7,248

Total equity and liabilities

53,625

66,366

89,801

101,952

121,521

152,556


CASH FLOW

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec (RMB mn)

Operating

Profit before taxation

4,466

6,533

5,845

8,528

12,405

17,353

Depreciation & amortization

730

1,071

1,567

2,453

3,071

3,829

Tax paid

(433)

(819)

(436)

(636)

(926)

(1,295)

Change in working capital

(3,409)

(6,364)

(6,766)

(5,508)

(4,311)

(4,704)

Others

1,012

1,152

1,923

(1,386)

(1,411)

(1,036)

Net cash from operations

2,365

1,572

2,133

3,450

8,829

14,147

Investing

Capital expenditure

(1,980)

(2,046)

(3,436)

(4,382)

(5,346)

(6,386)

Acquisition of subsidiaries/ investments

(81)

(173)

0

0

0

0

Net proceeds from disposal of short-term investments

3

0

0

0

0

0

Others

0

8

(3,645)

1,244

1,408

1,624

Net cash from investing

(2,058)

(2,212)

(7,081)

(3,138)

(3,937)

(4,762)

Financing

Dividend paid

(388)

(615)

(822)

(936)

(1,175)

(1,613)

Net borrowings

1,888

132

8,677

(982)

2,227

5,783

Proceeds from share issues

212

1,280

1,730

0

0

0

Others

(66)

(68)

(41)

(17)

(48)

(48)

Net cash from financing

1,647

729

9,544

(1,936)

1,004

4,122

Net change in cash

Cash at the beginning of the year

10,261

12,229

12,385

17,183

15,565

21,466

Exchange difference

14

5

(14)

5

6

7

Others

1,954

33

4,812

(1,623)

5,896

13,506

Cash at the end of the year

12,229

12,267

17,183

15,565

21,466

34,980

GROWTH

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec

Revenue

50.3%

36.2%

30.9%

32.1%

26.5%

24.0%

Gross profit

40.9%

42.3%

22.2%

32.1%

31.0%

28.4%

Operating profit

55.1%

47.2%

(11.4%)

47.0%

45.5%

39.9%

Net profit

65.7%

44.2%

(1.8%)

40.2%

42.8%

41.1%

PROFITABILITY

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec

Gross profit margin

41.1%

42.9%

40.1%

40.1%

41.5%

43.0%

Operating margin

20.1%

21.8%

14.7%

16.4%

18.9%

21.3%

Return on equity (ROE)

17.7%

20.3%

16.1%

18.7%

22.1%

25.0%

GEARING/LIQUIDITY/ACTIVITIES

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec

Current ratio (x)

2.0

2.0

2.3

1.7

1.8

1.8

VALUATION

2023A

2024A

2025A

2026E

2027E

2028E

YE 31 Dec

P/E

86.4

60.2

61.6

44.0

30.8

21.8

Source: Company data, CMBIGM estimates. Note: The calculation of net cash includes financial assets.



Disclosures & Disclaimers

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CMBIGM Ratings

BUY : Stock with potential return of over 15% over next 12 months

HOLD : Stock with potential return of +15% to -10% over next 12 months

SELL : Stock with potential loss of over 10% over next 12 months

NOT RATED : Stock is not rated by CMBIGM

OUTPERFORM : Industry expected to outperform the relevant broad market benchmark over next 12 months

MARKET-PERFORM : Industry expected to perform in-line with the relevant broad market benchmark over next 12 months

UNDERPERFORM : Industry expected to underperform the relevant broad market benchmark over next 12 months

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