Zinsemi Surges Toward Hong Kong IPO: Behind 80.4% Net Profit Surge in 2025, Rising Customer Concentration at 41.6% Signals Hidden Risks

Leading Global Provider of PCB Direct Imaging Equipment, Covering All Application Scenarios

Xinqi Microfabrication, as the world’s largest supplier of PCB direct imaging equipment, focuses on R&D, manufacturing, and sales of equipment centered on micro-nano direct writing lithography technology. The company’s main products include PCB direct imaging equipment and automated line systems, semiconductor direct writing lithography equipment and automated line systems, as well as maintenance services. According to data from Zhuoshi Consulting, in 2024, the company held a 15.0% market share, ranking first globally among PCB direct imaging equipment providers.

The company’s core competitive advantage lies in its global technological competitiveness, with key performance indicators in the top tier internationally. It is also the only company worldwide with commercial products covering all applications including PCB, IC substrates, advanced packaging, and mask plates. As of December 31, 2025, the company has supplied nearly 100 types of equipment to over 600 global customers, including all top ten PCB manufacturers worldwide and 70% of the top 100 PCB manufacturers globally.

In terms of business model, the company adopts a dual approach of “standardized production” and “customized production,” ensuring product quality and efficiency while meeting the differentiated needs of high-end clients. The sales model primarily relies on direct sales, supplemented by distribution channels, with direct sales accounting for 95.9% of revenue in 2025.

2025 Revenue Surpasses 1.4 Billion Yuan, Growing at a CAGR of 30.3% Over Three Years

The company’s operating income has maintained strong growth in recent years, rising from 829 million yuan in 2023 to 1.408 billion yuan in 2025, with a three-year compound annual growth rate of 30.3%. Notably, 2025 revenue increased by 47.6% year-over-year, mainly driven by the dual growth in sales of PCB direct imaging equipment and semiconductor direct writing lithography equipment.

Net Profit Surges 80.4% in 2025, Gross Margin Rebounds to 39.1%

The company’s net profit showed a pattern of decline followed by recovery. In 2024, net profit was 161 million yuan, down 10.4% year-over-year, mainly due to decreased gross margin and inventory write-downs. In 2025, net profit rebounded strongly to 290 million yuan, up 80.4% YoY, driven by significant increases in revenue and gross profit.

Gross margin in 2024 was 35.5%, down 5.4 percentage points from 2023, mainly due to longer warranty periods for new models increasing warranty costs and inventory write-downs caused by technological upgrades. In 2025, gross margin recovered to 39.1%, supported by increased high-margin overseas orders and product mix optimization.

Net profit margin followed a similar trend, rising to 20.6% in 2025 from 16.8% in 2024, indicating the company’s profitability has returned to pre-pandemic levels.

PCB Equipment Contributes 76.7% of Revenue; Semiconductor Equipment Grows Rapidly

The company’s revenue mainly comes from PCB direct imaging equipment and automated line systems, which totaled 1.08 billion yuan in 2025, accounting for 76.7% of total revenue, up 39.7% YoY. The semiconductor direct writing lithography equipment and automated line systems performed even better, with 2025 revenue of 233 million yuan, a 112.5% increase YoY, increasing their share to 16.6%. Maintenance service revenue was 84 million yuan, stable at 6.0%.

Regionally, in 2025, overseas revenue reached 275 million yuan, accounting for 19.5%, significantly higher than 7.3% in 2023, reflecting effective international expansion. Thailand contributed 140 million yuan, becoming a major overseas market.

Related Party Transactions Are Small and Have Limited Financial Impact

The prospectus shows transactions with related party Hefei Jiuchuan Intelligent Equipment Co., Ltd., including leasing and procurement, totaling 758,000 yuan, 1.01 million yuan, and 1.18 million yuan from 2023 to 2025, respectively. These are small amounts, representing less than 0.1% of total revenue, with limited impact on financials. Directors believe these transactions are conducted at fair value and do not distort operating performance.

Long Cash Conversion Cycle of 351 Days, Significant Working Capital Pressure

The company faces notable working capital pressure, with a cash conversion cycle of 351.2 days in 2025, improved from 404.4 days in 2024 but still high. Inventory turnover days are 287.2 days, accounts receivable turnover days are 275.2 days, both significantly exceeding accounts payable turnover days of 211.2 days.

Net cash flow from operating activities was -129 million yuan and -72 million yuan in 2023 and 2024, respectively, turning positive to 91.86 million yuan in 2025. The prolonged cash cycle results in reliance on external financing. As of the end of 2025, the company’s asset-liability ratio was 25.9%, current ratio 3.33, quick ratio 2.36, indicating manageable overall debt levels but highlighting the need for better working capital management.

Global Leader in PCB Equipment; Market Share in Semiconductor Still Low

As the world’s largest PCB direct imaging equipment supplier, the company has a significant competitive advantage in the PCB sector, with a market share surpassing major competitors. However, in the semiconductor direct writing lithography equipment market, the company’s share was only 1.5% in 2024, lagging behind international leaders.

The company continues to increase R&D investment, with 131 million yuan spent in 2025, accounting for 9.3% of revenue. It employs 281 R&D personnel, representing 35.0% of total staff, supporting technological advancement. Future efforts should focus on breakthroughs in semiconductor equipment to improve overall market position.

Compared to industry averages, Xinqi Microfabrication exhibits the following characteristics:

• Significantly higher revenue growth: 47.6% in 2025, far above the industry average of 15-20%.
• Gross margin in the mid-range: 39.1%, below industry leaders’ 45-50%, but above the industry average of 35%.
• Relatively lower R&D intensity: 9.3% R&D expense ratio in 2025, below the industry average of 12-15%, which may impact long-term technological competitiveness.

Top Five Customers Contribute 41.6% of Revenue, Risk of Customer Concentration

Customer concentration remains a risk. In 2025, the top five customers contributed 41.6% of revenue, up sharply from 23.5% in 2023, with the largest customer contributing 137 million yuan. This high concentration makes the company vulnerable to major customer order fluctuations.

The top two customers contributed 193 million yuan and 189 million yuan, together accounting for 27.1% of total revenue. Although the company believes its customer base is broadly distributed across industries, reducing risk, reliance on a few large clients remains a concern.

Procurement from Top Five Suppliers Accounts for 42.2% of Total Purchases

Regarding suppliers, the top five accounted for 42.2% of total procurement in 2025, with the largest supplier representing 21.2%. This indicates some dependence on key suppliers, with potential supply chain risks. The main raw materials include lasers and high-precision guides, with 35-40% of procurement from the top five suppliers, including reliance on overseas sources, which could be affected by logistics and trade policies.

Ms. Cheng Zhuo Controls 34.13% of Shares; Experienced Management Team

The actual controller is Ms. Cheng Zhuo, holding a total of 34.13% of shares through direct and indirect holdings, making her the largest shareholder and key decision-maker. She has extensive management experience and has served as chairman since the company’s founding, influencing strategic and operational decisions.

Other major shareholders include the National Integrated Circuit Industry Investment Fund (5.0%) and Hefei Kechuang (3.5%). The shareholding structure is relatively concentrated, with significant influence from the controlling shareholder.

Core Management Team with Strong Backgrounds; Reasonable Compensation

The core management team includes General Manager Fang Lin, CFO Wei Yongzhen, among others, with many years of industry experience. Ms. Cheng Zhuo has 20 years of experience in semiconductor equipment, previously serving as Deputy General Manager at China Electronics Technology Group. Mr. Fang Lin has 15 years of lithography R&D experience, formerly at ASM Pacific.

In 2025, total compensation for directors and senior managers was 2.88 million yuan, generally aligned with company size and industry standards. Ms. Cheng Zhuo received 826,000 yuan; Mr. Fang Lin 763,000 yuan; Ms. Wei Yongzhen 988,000 yuan. Compensation levels are consistent with industry peers but lower than listed companies in the same sector.

Multiple Risks Require Cautious Investment

The company faces several risks, including:

2. Technology Iteration Risk:** Rapid technological updates in direct writing lithography mean failure to keep pace or insufficient innovation investment could adversely affect business. R&D investment remains relatively low at 9.3% in 2025, below industry average, potentially impacting long-term competitiveness.

3. International Trade Policy Risks: Export of products faces US tariffs and export controls. US restrictions on China’s semiconductor industry could impact supply chains and overseas market expansion. Dependence on imported key components makes the company vulnerable to US-China trade tensions.

4. Customer Concentration Risk: Over 40% of revenue from top five customers, with the top two contributing over 25%. Loss of major clients could significantly impact performance.

5. Supply Chain Risks: Heavy reliance on key suppliers, with potential shortages or price fluctuations affecting production and costs. Some critical parts are imported, exposing the company to international logistics and trade risks.

6. Cash Flow Risks: Long cash conversion cycle may cause working capital strain. Continued negative cash flow from operating activities in 2023-2024, though turning positive in 2025, still poses challenges.

7. Overseas Expansion Risks: Expansion in Thailand faces policy, labor, and cultural uncertainties. Large investments and long cycles could impact returns.

8. Liquidity Risks: Declining current and quick ratios indicate rising liquidity risk, with ratios decreasing from 2023 to 2025.

Growth Potential and Risks Coexist; Investors Should Exercise Caution

As a global leader in PCB direct imaging equipment, Xinqi Microfabrication benefits from growing downstream demand in AI servers, automotive electronics, and other sectors. The company’s performance rebounded significantly in 2025, demonstrating strong profitability and growth potential. Its technological strength, broad product portfolio, and initial success in internationalization are notable.

However, investors should be aware of rising customer concentration (41.6%), a long cash cycle (351 days), and low market share in semiconductor equipment (1.5%). Future strategies should include optimizing customer structure, improving working capital management, and increasing R&D in semiconductor equipment to sustain healthy growth.

Additionally, risks such as cash flow divergence from profits, deteriorating liquidity, insufficient R&D investment, and uncertainties in overseas expansion must be carefully considered. Given current valuation levels, investors should weigh the company’s competitive advantages against potential risks before making investment decisions.

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Disclaimer: Market risks exist; investments should be cautious. This article is generated automatically by an AI model based on third-party data and does not represent Sina Finance’s views. All information herein is for reference only and does not constitute personal investment advice. Please refer to official disclosures for accuracy. For questions, contact biz@staff.sina.com.cn.