Goldman Sachs Raises Naura Technology Target Price to Rmb719, Maintains Buy

Overview

Goldman Sachs issued a research report maintaining its 'Buy' rating on Naura Technology (002371.SZ) and raising its 12-month target price from Rmb638 to Rmb719. The core logic of the report is that the generative AI trend in China is accelerating capital expenditure by local chip manufacturers, thereby driving demand for domestic semiconductor equipment suppliers. As a leading domestic equipment supplier, Naura Technology is well-positioned to benefit continuously due to its R&D capabilities in advanced node applications and the expansion of its new product lines.

Core views

Demand-side drivers: The report points out that influenced by the generative AI trend in China's market demand, domestic integrated circuit production increased by 21% YoY in March 2026. With the accelerated adoption of domestic GPU chipsets (such as underlying hardware for models like Alibaba's Tongyi Qianwen and SenseTime's SenseNova) in AI foundation models, customer demand for advanced node applications is rising. This directly benefits domestic semiconductor equipment suppliers with strong R&D capabilities, with Naura Technology as the industry leader being the primary beneficiary. Product and Technology Breakthroughs: Naura Technology continues to expand in the field of advanced node semiconductor equipment (SPE). The company launched ion implanters/plating tools in March 2025, 12-inch Low Pressure Chemical Vapor Deposition (LPCVD)/Metal Organic Chemical Vapor Deposition (MOCVD) tools in July 2025, and released next-generation Inductively Coupled Plasma (ICP) tools and hybrid bonding tools in March 2026. In particular, the new 12-inch ICP etcher NMC612H launched during SEMICON 2026 aims to meet critical etching process requirements for advanced logic and memory chips. Goldman Sachs believes these enhanced product specifications will align with customers' increasingly elevated technical and manufacturing demands. Earnings and Valuation Re-rating: Based on increased revenue contributions from new products and the upgrade of the product mix towards advanced nodes, Goldman Sachs has raised its earnings forecasts for Naura Technology for 2026-2028 by 1%, 4%, and 4% respectively. Meanwhile, gross margins for 2027 and 2028 are expected to improve by 0.2 percentage points and 0.1 percentage points respectively. Regarding valuation, considering the re-rating of China's semiconductor equipment industry driven by advanced node expansion and AI demand, Goldman Sachs has raised its target 2027 Price-to-Earnings (P/E) multiple from 36.5x to 39.7x, deriving the new target price of Rmb719.

Analysis framework

Goldman Sachs' analytical approach follows the logical chain of 'Macro Industry Prosperity -> Company Micro Product Competitiveness -> Financial Model Revision -> Valuation Reconstruction'. First, it confirms the rapid growth of China's IC output through data from the National Bureau of Statistics, attributing it to an AI-driven capex cycle, establishing a background of upward industry Beta. Second, it thoroughly reviews Naura Technology's product launch cadence, especially key equipment for advanced nodes (such as ICP, LPCVD, etc.), to verify whether its technological Alpha can capture industry demand. Finally, combining revenue growth expectations and gross margin improvements, it raises earnings forecasts and assigns a higher valuation multiple based on regression analysis of P/E ratios and forward earnings growth of global semiconductor equipment companies, thereby arriving at the target price.

Methodology notes

• Valuation MethodPE/PEG valuation

  Determining target multiples based on regression analysis of Price-to-Earnings (P/E) ratios and forward earnings growth of global semiconductor equipment companies

  The report does not look at the P/E ratio in isolation but references global peer companies to analyze the statistical relationship between 'valuation multiples' and 'future earnings growth rates'. When a company's growth certainty strengthens, the market is willing to assign a higher P/E multiple, which is a common variant of PEG thinking in growth stock valuation.

• Industry/Industrial Analysis FrameworkUpstream-Midstream-Downstream Supply Chain Transmission

  AI Large Model Applications -> Domestic GPU Chip Demand -> Foundry Capex -> Upstream Equipment Supplier Orders

  The report demonstrates a typical supply chain transmission logic: the explosion of downstream AI applications (such as Tongyi Qianwen) drives demand for computing power chips, prompting midstream foundries to expand capacity and upgrade processes, ultimately translating into orders and revenue for upstream equipment suppliers (such as Naura Technology).

Asset mapping & comparison

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

• Naura Technology (002371.SS)

  Direct Beneficiary: As China's leading domestic semiconductor equipment supplier, it directly benefits from increased capital expenditure by domestic foundries due to AI demand and the domestic substitution of advanced node equipment.

  Strengths

  Comprehensive product line, strong R&D capabilities, and has achieved breakthroughs and launched new products in key advanced node equipment such as ion implantation, LPCVD, and ICP etching.

  Comparison

  Compared to other domestic suppliers, Naura Technology has a leading advantage in platform layout and advanced node coverage.

  Risks

  Further tightening of US export controls may delay customer expansion progress; slower-than-expected expansion by mature node customers.

Key data

• YoY Growth Rate of China's IC Output in March 202621%Source: National Bureau of Statistics, reflecting industry prosperity
• Magnitude of Earnings Forecast Upgrade for 2026-20281% / 4% / 4%Primarily 得益于 revenue contributions from new products and product mix upgrades towards advanced nodes
• Expected Gross Margin Improvement for 2027/20280.2ppts / 0.1pptsReflecting profitability improvement driven by product mix optimization
• Target PriceRmb719.0Previously Rmb638.0
• Target 2027E P/E Multiple39.7xPreviously 36.5x, reflecting valuation re-rating

Impact & implications

The report believes that Naura Technology is in a critical period of expanding from mature process equipment to advanced process equipment, and the AI wave provides a rare window of opportunity for Chinese domestic equipment suppliers. As the penetration rate of the company's products in advanced logic and memory chip manufacturing increases, its growth ceiling will be opened, and its valuation system is also expected to align more with high-growth technology stocks rather than traditional cyclical stocks. For investors, this means the company not only enjoys the dividends of industry growth but can also achieve excess returns through technological breakthroughs.

Risks

• Further intensification of US export restrictions on Chinese semiconductor enterprises could lead to delays in customer capacity expansion plans, thereby reducing demand for Naura Technology's equipment.
• Slower-than-expected capacity expansion progress by Naura Technology's mature node customers could lead to slowed revenue growth, causing actual earnings to fall below current estimates.

What to watch

• The adoption speed of domestic Chinese GPU chipsets in AI foundation models and the subsequent realization of capital expenditure.
• Customer validation progress and order acquisition status for Naura Technology's new generation of advanced node equipment (such as the NMC612H ICP etcher).
• Latest developments in US export control policies and their actual impact on the expansion pace of domestic foundries.