NAURA: Advanced semiconductor equipment ramps up, and strong orders plus rising China semiconductor capex support a Buy rating

Overview

This report focuses on NAURA's order and earnings outlook amid rising China semiconductor capex, the development of the domestic supply chain, and accelerating validation of advanced tools. Goldman Sachs believes logic and memory customers are speeding up validation and adoption of domestic semiconductor production equipment, especially in advanced logic, memory, and advanced packaging; NAURA is well positioned to benefit from customer capacity expansion and localization trends with its etching, deposition, and next-generation advanced tool portfolio.

Core views

The core views are: first, China semiconductor capex is expected to stay elevated, at US$44.6bn/US$44.9bn in 2026/2027E, becoming an important driver of equipment demand; second, NAURA's advanced logic, 3D NAND/DRAM, HBM hybrid bonding, and new product categories such as ion implantation are ramping up, helping capture structural growth; third, short-term validation and delivery of new products may create temporary pressure on margins, but product mix upgrades, scale effects, localized component cost reductions, and improved production and delivery efficiency are expected to support gross margin stability; fourth, Goldman Sachs raised earnings forecasts and target valuation while maintaining its Buy rating.

Analysis framework

The report uses a top-down and bottom-up approach: first assessing China semiconductor capex, the domestic AI supply chain, and the expansion trend in advanced process and memory capacity, then mapping these to NAURA's orders for etching, deposition, advanced logic, advanced memory, and advanced packaging tools; on valuation, it uses a near-term P/E approach and references the relationship between P/E and forward earnings growth for global semiconductor production equipment companies.

Methodology notes

• Valuation methodsNear-term P/E valuation

  Derive the 12-month target price using the 2027E P/E multiple

  Goldman Sachs sets NAURA's target 2027E P/E at 44.5x and derives a 12-month target price of Rmb818 accordingly; this multiple is supported by the regression relationship between P/E and forward earnings growth for global semiconductor production equipment companies.

• Fundamental ForecastEarnings forecast revision

  Adjust revenue, gross margin, and expense ratio assumptions

  The report raises 2027/2028E earnings forecasts by 2% each, mainly on higher revenue assumptions for advanced logic and memory equipment; gross margin and expense ratio assumptions are broadly unchanged.

• Factor FrameworkGS Factor Profile

  Growth, financial returns, valuation multiple, and composite factor comparison

  Goldman's factor framework provides an investment context for the stock by comparing growth, financial returns, valuation multiples, and composite metrics against covered stocks and industry peers.

• M&A AssessmentM&A Rank

  Probability score for acquisition

  Goldman discloses that its M&A framework assesses the likelihood of a company being acquired on a 1-to-3 scale; if the M&A Rank is 1 or 2, M&A factors may be incorporated into the target price, while Rank 3 usually does not affect the target price.

Asset mapping & comparison

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

• NAURA (002371.SZ)

  Covered name in the report; Chinese semiconductor equipment supplier

  Strengths

  Benefits from rising China semiconductor capex, domestic supply chain buildout, and faster validation of advanced logic and memory equipment; etching and deposition equipment are core products, and the company is expanding into new categories such as HBM hybrid bonding and ion implantation.

  Weaknesses

  Validation and delivery of new products may temporarily weigh on near-term gross margin; revenue growth depends on customer capacity expansion pace and the speed of advanced equipment adoption.

  Comparison

  On valuation, Goldman references the P/E and forward earnings growth regression for global semiconductor production equipment companies; the chart shows the current 12-month forward P/E above the historical average but below +1 standard deviation.

  Risks

  Further U.S. export restrictions, slower-than-expected capacity expansion among mature-node customers, weaker-than-expected order-to-revenue conversion, and slower-than-expected validation progress for advanced tools.

Key data

• China semiconductor capex forecast2026E US$44.6bn; 2027E US$44.9bnDriven by the development of the domestic AI supply chain and the expansion of local ecosystems in computing, HBM, and related areas.
• RatingBuyGoldman Sachs maintained its Buy rating on NAURA.
• 12-month target priceRmb818.0Previous target price was Rmb719.0.
• Target valuation multiple44.5x 2027E P/EThe previous 2027E P/E target was 39.7x.
• Earnings forecast revisionUp 2% each for 2027E/2028EMainly due to higher revenue assumptions for advanced logic and memory tools.
• Gross margin outlook39.7%-40.9% for 2026-2028E1Q26 gross margin was 40.8%, and is expected to remain broadly stable.
• Current price referenceRmb662.99NAURA price reference shown on the disclosure page.
• Valuation chart informationAbout 45x 12-month forward P/EThe chart shows the current valuation above the roughly 39x average and below the roughly 55x +1 standard deviation level.

Impact & implications

If China's semiconductor capex remains elevated as Goldman Sachs expects, NAURA may benefit from faster domestic equipment validation, advanced process and memory capacity expansion, and demand for HBM-related equipment. The higher target price reflects improved earnings growth expectations and a re-rating of the China semiconductor equipment sector as advanced memory and logic expansion, together with faster validation progress, drive the industry higher. For investors, the key questions are whether orders can convert into revenue, whether advanced tools can ramp successfully, and whether gross margin can remain stable despite pressure from new product deliveries.

Risks

• Further tightening of U.S. export restrictions on Chinese semiconductor companies could delay customer capacity expansion plans and reduce demand for NAURA's equipment.
• Slower-than-expected capacity expansion among mature-node customers could cause revenue growth and earnings to fall below Goldman Sachs' current forecasts.
• Validation, delivery, and mass-production ramp-up of new products could fall short of expectations, weighing on revenue recognition and margins.
• If demand for advanced logic, memory, and advanced packaging equipment is weaker than expected, the re-rating thesis may weaken.

What to watch

• Whether China's semiconductor capex stays at the elevated US$44.6bn/US$44.9bn level in 2026/2027E.
• NAURA's 2026E order momentum, especially orders for etching, deposition, advanced logic, 3D NAND/DRAM, and HBM hybrid bonding equipment.
• New product validation pass rates, customer adoption pace, and delivery efficiency.
• Whether gross margin can remain in the 39.7%-40.9% range during 2026-2028E.
• The impact of U.S. export restrictions and other geopolitical policies on China's semiconductor expansion plans.
• Whether the 44.5x target 2027E P/E can continue to be supported by earnings growth and sector re-rating.