New Stock Interpretation | From the Science and Technology Innovation Board to the Hong Kong Stock Exchange, Circuit Fabology Microelectronics Equipment (09630)s New Globalization Chess Game.

In the current trend of reshaping the global semiconductor industry driven by artificial intelligence (AI) and high-performance computing (HPC), lithography equipment, as the core link in chip manufacturing, is facing a critical window of technological iteration and market structure change. Against this background, Hefei Circuit Fabology Microelectronics Equipment Co., Ltd. ("Circuit Fabology Microelectronics Equipment" (09630)) initiated its IPO from June 17 to June 23, intending to globally issue approximately 12.8387 million shares, and is expected to be listed on June 26. This company, which had already debuted on the Shanghai Stock Exchange's Sci-Tech Innovation Board in 2021, is now seeking a dual listing in both A-shares and H-shares, aiming to expand its global presence and production capacity. The prospectus shows that based on 2024 revenue calculations, Circuit Fabology Microelectronics Equipment has become the world's largest supplier of PCB direct imaging equipment, with a market share of 15.0%. What are the highlights of Circuit Fabology Microelectronics Equipment's Hong Kong IPO? Crossing from PCB to semiconductor It is understood that since its establishment in 2015, Circuit Fabology Microelectronics Equipment has been focusing on the research and industrialization of micro/nano direct writing lithography technology. Direct writing lithography technology is a lithography process that does not require the use of physical masks and directly transfers patterns to the substrate through digital control of the light beam. Compared to traditional mask lithography, this technology has significant advantages in compatibility, flexibility, and shortening the process chain, particularly suitable for PCB manufacturing, advanced packaging, and IC carrier board applications. The company's main product line is divided into two main segments: PCB direct imaging equipment and automatic line systems, and semiconductor direct writing lithography equipment and automatic line systems. From a revenue structure perspective, the PCB business is the company's absolute backbone. By 2025, PCB direct imaging equipment and automatic line systems will contribute revenue of RMB 1.08 billion, accounting for 76.7% of total revenue, a further increase from 71.2% in 2023. The revenue from semiconductor direct writing lithography equipment and automatic line systems is RMB 233 million, accounting for 16.6%, although much smaller than the PCB business, the gross profit margin is significantly higher - the semiconductor equipment gross margin is 53.8% in 2025, while the PCB equipment gross margin is 34.5%. This structure of "PCB business contributing to scale, semiconductor business contributing to profit" has remained stable over the past three years. It is also noted that Circuit Fabology Microelectronics Equipment is the only company globally with commercial products covering all PCB, IC carrier board, advanced packaging, and mask applications. As of December 31, 2025, the company has provided nearly 100 types of equipment to over 600 customers, including all top ten PCB manufacturers worldwide and seventy percent of the top 100 PCB manufacturers globally. In the field of advanced packaging, the company has served 16 customers. The top five customers in 2025 contributed 41.6% of revenue, an increase from 23.5% in 2023, reflecting the deepening cooperation and increasing customer stickiness, forming a stable top customer ecosystem. Financial resilience under high growth backdrop In terms of regional distribution, the company exhibits a positive development trend of "based on domestic demand, accelerating international expansion." In 2025, revenue from mainland China was RMB 1.134 billion, accounting for 80.5% of total revenue, with a stable domestic base. The Thai market, which did not exist before, contributed RMB 140 million in revenue in 2025, accounting for 10.0%, while revenue from the Japanese market increased from RMB 17.58 million in 2023 to RMB 56.51 million. This change aligns well with the industry trend of global PCB capacity shifting to Southeast Asia - over 30 of the top 40 PCB manufacturers worldwide have announced plans to establish production bases in Thailand, Vietnam, or Malaysia. The company has established a wholly-owned subsidiary in Thailand and obtained BOI investment promotion incentives, demonstrating the initial success of its global layout. Looking at the revenue growth curve, Circuit Fabology Microelectronics Equipment is in a phase of rapid expansion. From 2023 to 2025, the company's revenue increased from RMB 829 million to RMB 954 million, then leaped to RMB 1.408 billion, with a three-year compound annual growth rate of 30.3%. The year-on-year growth rate in 2025 reached 47.6%, indicating strong growth momentum. Net profit was RMB 179 million in 2023, temporarily falling to RMB 161 million in 2024, but rebounding strongly to RMB 290 million in 2025, an 80.4% year-on-year increase, positioning the profit capacity back on a high growth track. In terms of gross margin, the comprehensive gross margin was 40.9% in 2023, adjusted to 35.5% in 2024, then rose to 39.1% in 2025. The temporary decline in gross margin in 2024 was due to increased costs from providing longer warranties for newly launched models and inventory optimization adjustments due to technological and product upgrades, a normal operational rhythm adjustment during a period of rapid growth. With continuous optimization of product structure and the release of scale effects, the company's gross margin has shown a clear upward trend, with profit capacity expected to continue strengthening. Accelerated global layout amid vast market space Looking at the industry competitive landscape, the top five suppliers in the global PCB direct imaging equipment market have a combined market share of about 55.1%, with Circuit Fabology Microelectronics Equipment leading globally at 15.0%, establishing an industry-leading position. While the gap with the second-place 13.7% is not substantial, the company has built systematic competitive advantages in research and development investment, customer resources, product matrix, etc., and is expected to continue consolidating its leading position. In the higher value field of semiconductor-related direct writing lithography equipment, the company currently has a market share of 1.5%, although there is a gap with international giants in the industry concentration of over 70%, this actually signifies broad growth potential. In the field of advanced packaging, IC carrier boards, and other semiconductor segments, direct writing lithography technology, with core advantages like no mask requirement and suitability for large-size substrates, is entering a period of rapid penetration. As one of the only two companies in China with commercial products covering advanced packaging applications and one of the only three companies covering mask applications, Circuit Fabology Microelectronics Equipment has gained a favorable starting position in this wave of domestic substitution. To seize this historic market opportunity, the company plans to allocate a considerable portion of the IPO funds to strengthen research and development capabilities, expand production capacity, and strategic acquisitions. Of particular interest is the overseas expansion plan to add 50 to 100 units of capacity in Thailand, with an expected capacity utilization rate of about 80% to 90%. Considering that the production capacity utilization rate at the Hefei base has already exceeded 170%, the production capacity bottleneck has become a significant factor restricting the company's ability to further unleash performance potential. Overseas expansion is not only an effective measure to solve production capacity bottlenecks but also a strategic choice to get closer to Southeast Asian customers and deepen global supply chain layout. Looking at downstream demand, the growth logic of Circuit Fabology Microelectronics Equipment closely aligns with the demand for high-end PCB and advanced packaging driven by emerging technologies such as AI, HPC, 5G, etc. Zhihui Consulting predicts that the global AI server market size will increase from RMB 754.8 billion in 2024 to RMB 2.8 trillion in 2030, with a compound annual growth rate of 24.4%; the global advanced packaging market size is expected to increase from RMB 306.4 billion in 2024 to RMB 546.4 billion in 2030, with a compound annual growth rate of 10.1%. These high-growth sectors' demand for high-end PCB and advanced packaging processes is the ideal application scenario for Circuit Fabology Microelectronics Equipment's equipment products, positioning the company to benefit directly from this industry upgrading dividend. In summary, the H-share prospectus of Circuit Fabology Microelectronics Equipment paints a picture of a Chinese high-end equipment manufacturer with core technology, leading advantages in niche fields, and in a phase of rapid growth with a dominant position in the PCB industry. In the era of the rise of domestic semiconductor equipment, Circuit Fabology Microelectronics Equipment is steadily moving towards the goal of becoming a global leader in micro/nano direct writing lithography equipment with solid technological accumulation and a clear strategic vision.