Nomura upgrades Anji Microelectronics Technology to Buy and raises target price to CNY320

Overview

This report is Nomura's rating-upgrade report on Anji Microelectronics Technology. The core conclusion is that the company's progress in sub-10nm advanced nodes, its full-category CMP slurry platform, and upstream raw-material self-sufficiency will support revenue growth, margin improvement, and valuation re-rating.

Core views

Nomura believes the company's long-term benefits come from three areas: first, advanced processes and advanced packaging are increasing demand for CMP slurry; second, new products such as copper, copper barrier layer, and cobalt interconnect slurries are moving from validation to mass production or customer adoption; third, in-house abrasive R&D and capacity expansion should help maintain slurry gross margin at 55% to 58%. The report expects the company's revenue CAGR from 2025 to 2028 to be 21%, with 2026 revenue reaching CNY3.13bn. Its global market share is expected to rise from about 10% in 2024 to about 15% in 2026, with five-year potential to reach 25% to 30%.

Analysis framework

The report combines upward earnings revisions, P/E valuation, industry total demand sizing, and product-validation progress analysis, with a focus on comparing advanced-node demand, capacity ramp-up, raw-material self-sufficiency, gross margin, and peer competition risks.

Methodology notes

• Valuation methodP/E valuation

  Based on 2026F EPS, the report assigns 50x 2026F P/E, corresponding to a target price of CNY320.

  The 50x target P/E is above the historical average of 26x, which the report believes is supported by a 25% earnings CAGR from 2025 to 2028 and the advanced-process growth story.

• Industry demand sizingTAM analysis

  It estimates that China's CMP slurry market will reach CNY10.5bn by 2028.

  Incremental demand mainly comes from sub-10nm logic processes, CoWoS advanced packaging, high-layer 3D NAND, and HBM, with advanced packaging alone adding about 20% to CMP slurry demand.

Asset mapping & comparison

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

• 688019.SS

  Report subject; Anji Microelectronics Technology is a semiconductor materials company primarily engaged in CMP slurry and photoresist solvents.

  Strengths

  Its main strengths are advanced-node product positioning, a full-category CMP slurry platform, cross-selling capabilities to tier-1 wafer fabs, upstream abrasive self-sufficiency, and capacity expansion.

  Weaknesses

  Ultra-high-purity silica sol still relies on Fuso, and some advanced products are still in the customer-validation stage.

  Comparison

  The report states that the company's slurry gross margin could reach 55% to 58% in 2025, above peers at around 52% to 55%; it is currently trading at 39x 2026F P/E.

  Risks

  Weak demand from key customers, delays in customer capacity expansion, intensifying competition from Dinglong, wafer-fab vertical integration, and dependence on core raw materials.

• 300054.SS

  Industry competitor; the report mentions Dinglong as one of the competitive risks facing Anji Microelectronics Technology.

  Strengths

  It has a competitive presence in related semiconductor materials fields.

  Weaknesses

  The report does not provide detailed weaknesses.

  Comparison

  The report lists Dinglong as a potential source of competitive pressure rather than the valuation subject of this report.

  Risks

  Intensifying competition from it could compress Anji Microelectronics Technology's market share and margins.

Key data

• Rating changeBuy from NeutralNomura upgraded Anji Microelectronics Technology from Neutral to Buy.
• Target priceCNY320The previous target price was CNY175.
• Closing priceCNY245As of April 17, 2026.
• Implied upside+30.6%Based on the target price of CNY320 and closing price of CNY245.
• 2026F net profit forecastCNY10.72亿The previous forecast was CNY8.35亿.
• 2027F net profit forecastCNY13.03亿The previous forecast was CNY9.62亿.
• 2026F revenue forecastCNY31.30亿The report expects revenue CAGR of 21% from 2025 to 2028.
• 2028F China CMP slurry market sizeCNY105亿Nomura estimates growth will be concentrated in advanced logic, advanced packaging, and high-end memory.
• Gross margin view55%-58%The report believes a higher revenue mix from advanced nodes and self-developed abrasives will support strong slurry gross margin.
• Current valuation39x 2026F P/EThe report states the stock is currently trading at 39x 2026F P/E.

Impact & implications

This rating upgrade reflects a more constructive sell-side view on rising penetration of domestic semiconductor materials in advanced processes, advanced packaging, and high-end memory. If Anji Microelectronics Technology can continue advancing customer validation, mass production, and upstream abrasive self-sufficiency, its revenue growth, gross margin, and global market share may all be supported; however, valuation already reflects high growth expectations, and the pace of subsequent validation and the competitive landscape will determine whether the upside can be realized.

Risks

• Ultra-high-purity silica sol still relies on Fuso, leaving shortcomings in raw-material self-sufficiency and controllability.
• Competitors such as Dinglong may intensify competition, affecting market share and pricing.
• Wafer fabs may push vertical integration, potentially reducing opportunities for external materials suppliers.
• Demand from key customers may fall short of expectations.
• Capacity expansion plans of key customers may be delayed.
• Customer validation or mass-production ramp-up of advanced-node products may be slower than expected.

What to watch

• Mass-production progress of copper and copper barrier layer slurry at key customers.
• Progress of 7nm cobalt interconnect slurry expanding from validation at leading wafer fabs to follow-on customers.
• Capacity ramp-up at upstream material bases in Shanghai Jinqiao, Ningbo Beilun, and the Shanghai Chemical Industry Park.
• The rising share of self-developed abrasives and how strongly it supports the 55% to 58% gross margin range.
• Whether China's CMP slurry market can approach CNY10.5bn by 2028.
• Whether global market share can rise from about 10% in 2024 to about 15% in 2026.