HSBC Maintains Buy Rating on NAURA Technology and Raises Target Price to RMB1,031.90

Overview

This report is an update of company research on NAURA Technology by HSBC Qianhai Securities. The core conclusion is that although expansion-phase expenses, consolidation of Kingsemi, and price competition in certain segments depress short-term profit margins, domestic semiconductor equipment capex expansion, broader product portfolio coverage, and glass substrate equipment opportunities continue to support mid-term growth, so HSBC maintains a Buy rating and significantly raises the target price.

Core views

The report believes NAURA Technology's growth drivers come from three main lines: first, raised capital expenditure by domestic storage manufacturers creates semiconductor equipment order opportunities; second, the company captures storage, logic, and emerging packaging-related customer demand with a broader product portfolio; third, glass substrate-related equipment such as TGV ECP could become a stock catalyst. In the short term, staff expansion and R&D investment will weigh on net profit, but over the long term they help improve R&D capability and service quality.

Analysis framework

HSBC applies a price-to-sales valuation approach instead of a valuation method centered on near-term net profit because rising operating expenses during the expansion phase distort profit. The report uses a 2027e revenue per share of RMB88.20, applies a target 2027e PS multiple of 11.7x, which is in line with the average of global peers, and derives a target price of RMB1,031.90.

Methodology notes

• Valuation frameworkPS valuation

  2027e 11.7x PS target multiple

  Because expanding operating expenses in the expansion phase affect net profit, the report continues to use PS valuation; the target multiple was raised from 7.5x to 11.7x to align with the average multiple of global peers.

• Earnings forecastRevenue and earnings forecast revisions

  2026-2028e forecast roll-forward

  The report lowered 2026/2027 EPS and net profit forecasts to reflect higher operating expenses, lower gross margin after consolidating Kingsemi, and price competition in some areas, while adding 2028 revenue and net profit forecasts.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• NAURA Technology 002371.SZ

  Research coverage name

  Strengths

  Broad product portfolio coverage; benefits from domestic storage, advanced logic, and glass substrate investments; expected to sustain high growth in 2026-2028e revenue and net profit.

  Weaknesses

  Short-term profit performance may be pressured by rising staffing and R&D spending during expansion, lower margins after consolidating Kingsemi, and price competition in certain segments.

  Comparison

  The stock rose 57% in the past two months, below the Wind Semiconductor Equipment Index's 72% rise in the same period; HSBC believes the relative lag already reflects some market concerns.

  Risks

  Domestic semiconductor equipment capex slowdown, slower-than-expected progress in new equipment development, and glass substrate designs below expectations for implementation.

Key data

• Target priceRMB1,031.90Raised from RMB528.40, implying about 22.6% upside.
• Current stock priceRMB841.82As of close on July 2, 2026.
• 2026-2028e revenue CAGR27%Approximately close to the 26% average revenue CAGR of global peers.
• 2028e revenue forecastRMB81,302mAdded 2028 forecast in the report.
• 2028e net profit forecastRMB14,204mAdded 2028 forecast in the report.
• 2026e revenue forecastRMB50,468m2026 revenue forecasted year-on-year growth is 28.2%.
• 2026e net profit forecastRMB6,980m2026 net profit forecast is about 10% below Wind consensus expectations.
• 2026e EPSRMB9.62Lowered by about 30.6% versus previous forecast.
• 2027e EPSRMB13.41Lowered by about 24.7% versus previous forecast.
• Market capCNY610,900mDisclosed in the report market-data table.

Impact & implications

For investment implications, the report treats short-term profit pressure as an expansion-phase investment burden rather than a deterioration of core growth logic. If domestic semiconductor equipment capex continues to expand, and the company wins more orders in storage and advanced logic customers while advancing glass substrate-related equipment launches, valuation rerating and earnings growth are expected to support the stock jointly. Conversely, if capex slows, R&D progress falls short of expectations, or glass substrate design ramp is below expectation, revenue and valuation assumptions face downward revision risk.

Risks

• A slowdown in domestic semiconductor equipment capex would affect IC equipment sales prospects.
• Slower-than-expected progress in new equipment R&D may constrain expansion of product coverage and revenue growth.
• If glass substrate-related design implementation or investment comes in below expectations, it would create downside risk to revenue assumptions.
• Lower gross margin after consolidating Kingsemi and price competition in some segments may depress consolidated gross margin.
• In 2026-2027, expanding headcount, administrative expenses, and R&D expenses may continue to suppress net profit.

What to watch

• Rollout of TGV ECP equipment and its catalytic effect on the stock.
• The direction of capex revisions from domestic storage and advanced logic customers.
• Execution pace of the expense outflow for adding 4,000 to 5,000 employees over 2026.
• Whether the 2026 full-year incremental revenue of about RMB10.5bn and net profit of about RMB1.6bn are achieved.
• Progress in glass substrate technology investment and design ramp.
• Whether the profit gap versus Wind consensus expectations narrows.