Comatech 1Q Earnings Miss Expectations; Capacity Expansion Continues

Overview

Goldman Sachs released a 1Q26 earnings commentary on Comatech, noting that while revenue grew YoY, it missed expectations primarily due to a slower-than-expected ramp-up in ceramic heater shipments. Gross margin declined significantly due to changes in product mix, leading to a sharp YoY drop in net profit. The company's new Suzhou plant has commenced operations and is continuing to expand capacity. The long-term growth thesis remains supported by rising domestic semiconductor capex. The Buy rating is maintained, but the target price has been lowered.

Core views

Performance: 1Q26 revenue was RMB 271 million, up 9% YoY but 11% below Goldman Sachs' expectations. Gross margin fell from 57.1% in the same period last year to 46.1%, mainly due to an increased proportion of lower-margin ceramic component products. Net profit was RMB 46 million, down 47% YoY and 62% below expectations, reflecting gross margin pressure and increased operating expenses. Capacity Progress: The new Suzhou production base has commenced operations, focusing on ceramic heater production. Current monthly capacity has reached 200 units and continues to expand. The company is upgrading production lines to improve efficiency, with optimizations in cleaning and testing stages driving output improvements. R&D investment has increased, with over 40 types of 12-inch ceramic heaters developed, covering various deposition and laser annealing equipment. Earnings Adjustments: Based on actual results for 4Q25/1Q26, Goldman Sachs has lowered its 2025-2030 earnings forecasts by 4%-24%, primarily due to slower growth in ceramic module revenue and lagging progress in production efficiency improvements. However, the report emphasizes a positive outlook on the company's capacity expansion and rising demand from domestic semiconductor equipment customers. Valuation Logic: Using a discounted P/E valuation method, based on an expected 2029 P/E of 46x (linked to peer growth-valuation relationships) and discounted to 2026 at a 10.7% cost of equity, the new target price is RMB 164 (previously RMB 171). This implies a 2027 P/E of 77x, which lies between the company's historical average of 68x and +1 standard deviation of 86x.

Analysis framework

The report adopts a dual-thread analysis framework of 'Capacity-Demand': firstly, decomposing the reasons for the earnings miss through quarterly financial data (product mix, ramp-up progress); secondly, tracking capacity expansion progress (Suzhou plant, production line upgrades) to validate long-term supply capabilities. On the valuation level, combining industry cyclicality (China semiconductor capex) with the company's development stage, a forward P/E discounting method is used to capture growth potential, with target valuation multiples determined through peer comparison.

Methodology notes

• Valuation MethodPE/PEG valuation

  Discounted P/E Valuation Method

  Discounts the forward target P/E ratio (46x for 2029) to the current point in time using the cost of equity, suitable for valuing high-growth companies. The report determines the target multiple through peer growth-valuation relationships and validates rationality by comparing against historical valuation ranges.

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Capacity Expansion and Demand Matching Analysis

  Tracks the company's capacity construction progress (Suzhou plant) and downstream semiconductor equipment demand (China capex) to judge whether the pace of supply release synchronizes with demand growth, assessing mid-to-long-term growth certainty.

Key data

• 1Q26 RevenueRMB 271 million+9% YoY, 11% below expectations
• 1Q26 Gross Margin46.1%Significant decline from 57.1% in 1Q25
• 1Q26 Net ProfitRMB 46 million-47% YoY, 62% below expectations
• Monthly Ceramic Heater Capacity200 unitsAchieved after the new Suzhou plant commenced operations
• Target PriceRMB 164Lowered from previous RMB 171; implies 2027E P/E of 77x

Impact & implications

Short-term earnings pressure reflects product ramp-up and mix challenges, but the realization of capacity expansion strengthens long-term supply capabilities. The report believes that rising domestic semiconductor equipment capex will drive demand for structural components, and the gradual volume ramp-up of ceramic heaters and electrostatic chucks (ESC) is expected to improve profitability. The target price cut mainly reflects short-term earnings forecast adjustments and does not alter the long-term growth logic.

Risks

• Expansion of China semiconductor capex slower than expected
• Lagging progress in product line expansion into modules
• Slow progress in diversification of the local supply chain

What to watch

• Efficiency of ceramic heater capacity ramp-up
• Progress in customer validation of new 12-inch products
• Changes in domestic procurement policies for semiconductor equipment