Second-quarter results missed expectations, but memory and advanced logic capacity expansion continues to support NAURA’s order outlook

Overview

The report assesses NAURA’s 2Q26 results, order environment, earnings forecasts, and valuation. Although quarterly revenue and net profit fell short of expectations, Goldman Sachs believes that capacity expansion by memory and advanced logic customers, growth in China’s semiconductor capital expenditure, and rising market share for domestic equipment suppliers will continue to support medium- to long-term orders, and therefore maintains its Buy rating.

Core views

NAURA’s 2Q26 revenue was RMB9.8bn, up 24% YoY but down 5% QoQ, and was 10% and 11% below Goldman Sachs’ forecast and Bloomberg consensus, respectively. Management attributed the sequential decline to two factors: some demand was brought forward to 1Q26, and constrained supplies of semiconductor production equipment components extended delivery lead times. The 2Q26 gross margin was 39.3%, below 40.8% in 1Q26 and 41.3% in 2Q25, mainly due to a one-off impact from the consolidation of Kingsemi. As the operating expense ratio driven by R&D investment was higher than expected, net profit increased by only 7% YoY and was also 10% and 11% below Goldman Sachs’ forecast and Bloomberg consensus, respectively. Despite the quarterly results falling short of expectations, management remains optimistic about full-year order growth. Key support comes from accelerated capacity expansion by domestic memory and advanced logic customers, local demand, and the generative artificial intelligence trend, while domestic semiconductor production equipment suppliers are expected to continue gaining market share. Goldman Sachs expects China’s semiconductor capital expenditure to increase from US$46bn in 2025 to US$51bn in 2026 and US$59bn in 2027, representing YoY growth of 13% and 15%, respectively, and expects continued growth in 2028-30E. NAURA’s equipment covers processes including etching, deposition, cleaning, and thermal processing. The company also owns an in-house equipment components subsidiary and collaborates with third-party suppliers. The report views these capabilities as the foundation for capturing capacity expansion demand and supporting production. After incorporating the 2Q26 results into its forecasts, Goldman Sachs lowered its 2026E earnings forecast by 4%, mainly due to lower mature-node equipment revenue and higher R&D operating expenses than previously expected; its 2027-28E earnings forecasts were largely unchanged. This adjustment indicates that the report primarily reflects the current revenue shortfall and expense pressure in 2026 without changing its medium-term view on subsequent semiconductor capital expenditure and order growth. Regarding valuation, Goldman Sachs continues to use a discounted 2030E P/E methodology to reflect long-term growth opportunities. The target P/E is derived from the correlation between peer P/E multiples and the sum of forward net profit growth and operating margin. Based on NAURA’s 2031E YoY net profit growth and operating margin, Goldman Sachs derives an unchanged 2030E target P/E of 56x. Goldman Sachs applies the 56x P/E to its 2030E forecast and discounts it back to 2027E using an 11% cost of equity, resulting in an unchanged 12-month target price of RMB1,200 and a maintained Buy rating. The report also identifies two major downside risks: further US restrictions on exports to Chinese semiconductor companies could delay customers’ capacity expansion and weaken demand for NAURA’s equipment; and slower-than-expected capacity expansion by mature-node customers could cause revenue growth and earnings to fall below Goldman Sachs’ current forecasts.

Analysis framework

Goldman Sachs first compares NAURA’s quarterly revenue, gross margin, and net profit with the previous quarter, the same period of the prior year, its own forecasts, and Bloomberg consensus, and then combines management’s explanations regarding demand being brought forward, component supply, and R&D spending to identify the sources of the performance variance. The report then assesses order trends based on forecasts for China’s semiconductor capital expenditure, customer capacity expansion, and changes in domestic equipment market share, adjusts earnings forecasts accordingly, and finally determines the target price using a forward P/E derived from peer correlations and discounted at the cost of equity.

Methodology notes

• Valuation MethodPE/PEG valuation

  Discounted 2030E P/E Valuation

  The report applies a target P/E of 56x to NAURA’s 2030E forecast and discounts it back to 2027E using an 11% cost of equity to reflect long-term growth opportunities and derive the 12-month target price.

• Industry/Sector Analysis FrameworkSupply-demand framework

  Capital Expenditure and Equipment Order Demand Analysis

  The report explains equipment order demand through capacity expansion by memory and advanced logic customers, growth in China’s semiconductor capital expenditure, and rising market share for domestic equipment, while treating component supply constraints as a supply-side factor affecting delivery lead times.

Asset mapping & comparison

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

• NAURA (002371.SZ)

  The report’s primary research subject, whose order outlook is directly related to capacity expansion in China’s memory and advanced logic sectors, semiconductor capital expenditure, and rising market share for domestic equipment.

  Strengths

  Its equipment covers multiple processes, including etching, deposition, cleaning, and thermal processing, and it has an in-house equipment components subsidiary and third-party supply partnerships.

  Weaknesses

  2Q26 revenue and net profit fell short of expectations, gross margin declined, the R&D expense ratio was higher than expected, and mature-node equipment revenue was under pressure.

  Comparison

  The 56x target P/E is derived from the correlation between peer P/E multiples and the sum of forward net profit growth and operating margin.

  Risks

  Further tightening of US export restrictions or slower-than-expected capacity expansion by mature-node customers could reduce equipment demand, revenue, and earnings.

Key data

• 2Q26 RevenueRMB9.8bnUp 24% YoY and down 5% QoQ
• 2Q26 Revenue Miss10%/11% belowRelative to Goldman Sachs’ forecast and Bloomberg consensus, respectively
• 2Q26 Gross Margin39.3%40.8% in 1Q26 and 41.3% in 2Q25; the decline was mainly due to a one-off impact from the consolidation of Kingsemi
• 2Q26 Net Profit GrowthUp 7% YoY10% and 11% below Goldman Sachs’ forecast and Bloomberg consensus, respectively
• China Semiconductor Capital Expenditure in 2025US$46bnComparison base for the 2026-27E growth forecasts
• China Semiconductor Capital Expenditure in 2026EUS$51bnExpected to grow 13% YoY
• China Semiconductor Capital Expenditure in 2027EUS$59bnExpected to grow 15% YoY
• 2026E Earnings Forecast RevisionLowered by 4%Mainly due to lower mature-node equipment revenue and higher-than-expected R&D expenses
• Target P/E56x discounted 2030E P/EApplied to the 2030E forecast and discounted back to 2027E, unchanged
• Cost of Equity11%Used to discount the 2030E valuation back to 2027E
• 12-Month Target PriceRMB1,200Unchanged

Impact & implications

The report believes that the second-quarter revenue and net profit misses primarily reduce the 2026 earnings forecast but have not changed the medium-term growth thesis. Capacity expansion by memory and advanced logic customers, rising semiconductor capital expenditure in China, and increasing market share for domestic equipment are expected to continue supporting NAURA’s orders. Meanwhile, component supply, mature-node demand, and external export restrictions could still affect the pace of revenue realization.

Risks

• Further US restrictions on exports to Chinese semiconductor companies could delay customers’ capacity expansion plans and reduce demand for NAURA’s equipment.
• If capacity expansion by mature-node customers progresses more slowly than expected, NAURA’s revenue growth and earnings could fall below Goldman Sachs’ current forecasts.

What to watch

• Watch whether NAURA’s order growth in 2026 delivers on management’s positive outlook.
• Monitor the progress of capacity expansion by Chinese memory and advanced logic customers.
• Watch whether China’s semiconductor capital expenditure reaches US$51bn and US$59bn in 2026 and 2027, respectively.
• Monitor semiconductor production equipment component supply constraints and changes in delivery lead times.
• Monitor the subsequent performance of mature-node equipment revenue and the R&D expense ratio.