New Stock Preview | Semiconductor Material Business Takes the Lead, How Well Can Hubei Dinglong Perform in its Hong Kong Stock Debut?

From wafer manufacturing to advanced packaging, from display panels to lithography processes, more and more domestic materials companies are entering the capital market, hoping to improve their technical layout further through financing. Against this background, A-share listed company Hubei Dinglong (300054.SZ) has also chosen to list in Hong Kong. Looking back at Hubei Dinglong's development history, the biggest change in this company is not the growth of income scale, but the shift in business focus. In the past, the market's perception of Hubei Dinglong was more focused on being a consumables company for printing and copying, but now, the company has gradually grown into a semiconductor materials platform enterprise covering multiple fields such as CMP polishing materials, OLED display materials, lithography photoresists, advanced packaging materials, and more. This semiconductor materials company that successfully transformed from traditional consumables, how exactly is its high growth attributed to the stage dividend of domestic substitution wave, or does it possess underlying capabilities to persist through the cycle? By betting on domestic substitution, how will Hubei Dinglong open up its growth ceiling? It is understood that Hubei Dinglong started with specialty chemicals in 2000, initiated the research and development of color polymerized toner (CPT) in 2006, and achieved commercialization in 2012. However, the strategic turning point that truly determined the fate of the company occurred in the same year when the company started the independent research and development of CMP polishing pads. The key reason why Hubei Dinglong was able to upgrade its business is that it did not limit itself to a specific product but continuously expanded its capabilities around material science. According to the prospectus, the company has now developed multiple product lines including CMP solutions, semiconductor display materials, advanced semiconductor materials, and key materials for printing and copying. Among them, CMP polishing pads, CMP polishing slurries, and cleaning solutions constitute the most important business segment for the company, and it is also the fastest-growing direction in terms of revenue. According to Frost & Sullivan data, based on 2025 revenue figures, the company has become the largest domestic supplier of CMP polishing pads, with a market share of 38.5%, and also the third largest CMP materials supplier in China. Although CMP materials may not attract as much market attention as chip design does, they are indispensable critical consumables in the wafer manufacturing process. With each additional layer of wafer manufacturing process, there are more polishing steps involved, leading to an increased demand for CMP materials. In recent years, as domestic wafer fabs continue to expand production capacity and the proportion of advanced process nodes continues to rise, the local CMP materials market has maintained rapid growth, and the localization of material supply chains has become an important direction for industry development, providing Hubei Dinglong with substantial growth space. In addition to the CMP business, the company has also made rapid progress in the field of OLED display materials in recent years. Currently, the company's main products include yellow polyimide (YPI) for flexible displays, photosensitive polyimide (PSPI), and thin film encapsulation inks, among other key materials. According to the prospectus, the company has become the largest supplier of OLED coating functional materials in China, with a market share of 38.5%. With the increasing penetration of flexible OLEDs in smartphones, tablets, automotive displays, and other fields, the demand for related materials is expected to continue growing, thereby benefiting from the incremental market brought about by the upgrading of the display industry. However, compared to the established scale of CMP and display materials businesses, the market is more focused on Hubei Dinglong's layout in high-end semiconductor materials. In recent years, the company has continued to invest in the research and development of KrF, ArF photoresists, and advanced packaging materials, with its photoresist production base in Qianjiang completing its first phase of construction and progressing the second phase project. At the same time, the company is also expanding into advanced packaging materials such as polyimides for packaging and temporary bonding adhesives, hoping to further cover more stages of wafer manufacturing and advanced packaging. The prospectus shows that the company has established seven major technical platforms including organic synthesis, polymer synthesis, physical chemistry, inorganic non-metallic materials, engineering equipment design, and material evaluation, with over 1,000 research and development personnel and over 600 registered patents. This implies that when the company enters new materials sectors in the future, it can rely more on existing technical platforms for extension, rather than building a new research and development system every time it enters a new field. This is also where platform-type material enterprises have a competitive advantage compared to single-product enterprises. At the same time, the company's research and development investment in recent years has remained at a high level, with cumulative research and development investment reaching 1.4 billion yuan during the reporting period, accounting for about 20.5% of continuous operating income. For the semiconductor materials industry, customer certification cycles are typically several years long, and once they enter the supply system, customer stickiness is relatively high. However, being technologically advanced does not mean that market competition has ended. For a long time, the semiconductor materials industry has been dominated by international leading companies, with high market shares. Whether it is in the field of CMP materials or photoresists, there are high technical barriers to entry. While Hubei Dinglong is currently leading in some areas of domestic substitution, there is still a certain gap to bridge when compared to the top international companies. In the future, it will still need to rely on continued research and development investment and customer validation to drive product upgrades and further expand market share. At the moment of performance release, long-term value still needs to be verified over time. In terms of financial performance, the company's revenue grew from 13.05 billion yuan in 2023 to 24.68 billion yuan in 2025, a cumulative growth of nearly 90% over two years; during the same period, net profit from continuous operations increased from 2.30 billion yuan to 7.43 billion yuan, and the net profit margin rose from 17.6% to 30.1%, showing a continuous improvement in profitability. In the first four months of 2026, the company achieved continuous operating revenue of 10.90 billion yuan, a year-on-year growth of over 50%, with a further increase in the net profit margin to 32.3%, continuing the fast-growing momentum. Overall, the company's operating quality, from revenue scale to profit level to gross margin, is showing an upward trend, reflecting the gradual entry of its semiconductor materials business into a stage of scale release. As the proportion of CMP solutions in revenue continues to increase, the company's overall gross margin increased from 57.1% in 2023 to 66.7% in 2025, with the gross margin of the semiconductor materials business reaching close to 70%, significantly higher than the traditional printing and copying key materials business. For a materials company, this means that the company has gradually moved away from low-value-added product competition and has begun to enter a stage of growth driven by technology. Nevertheless, it is important to note that high growth does not necessarily mean there are no challenges in the future. First of all, the semiconductor materials industry has typical long-term certification characteristics. Whether it is CMP polishing materials, OLED functional materials, or photoresists, entering the customer supply system requires undergoing lengthy testing, validation, and small-scale introduction. Even if the product meets the technological requirements, it may not quickly achieve scale sales. Therefore, there is often a long time lag between research and development results and commercial income, implying that some of the company's new products will still need to undergo market validation in the future. Taking the highly anticipated photoresist business as an example, Hubei Dinglong has now built KrF and ArF photoresist production lines and continues to advance its industrial layout. In terms of industry development, high-end photoresists have always been an important direction for domestic substitution, with a wide market space, but also one of the highest-technology barriers in the global semiconductor materials market. Compared to products like CMP polishing pads, photoresists not only involve material formulation but also require a high degree of alignment with exposure equipment, process nodes, and customer production processes, making their certification much more challenging. Therefore, although the company has completed capacity construction, the future scale commercialization of its products will depend on the progress of customer validation and the pace of domestic substitution, which also remains an important variable that the market will continue to pay attention to in the coming years. Currently, although Hubei Dinglong has established a relatively complete product matrix, many businesses are still in the stage of continuous investment. High research and development investment help to solidify technical advantages, but also means that the company will need to continuously maintain funding in the future to support the development of new businesses such as photoresists, advanced packaging materials, and new energy materials. Looking ahead, this is a necessary investment to build competitive barriers, but in the short term, it will also pose certain pressure on cash flow and capital expenditures. This Hong Kong listing is seen by the market as an important step for the company to further strengthen its capital strength, support subsequent research and development, and global expansion. In addition, in the future, Hubei Dinglong will also need to face the pressure brought by international competition. Despite the continuous trend of domestic substitution in recent years, the global semiconductor materials market is still dominated by a few international leaders, who hold a leading position in technology accumulation, customer resources, and global supply capacity, all of which form deep moats. For Hubei Dinglong, while it has built a domestic leading advantage in some specific areas, if it hopes to further increase market share in the future, it will still need to continuously improve product performance, expand customer coverage, and narrow the gap with international manufacturers. This not only tests research and development capabilities but also the ability to sustain industrialization and scale delivery. Overall, Hubei Dinglong's listing in Hong Kong this time appears to be a new start for a company that has completed its transformation. From being a consumables company for printing and copying to becoming a platform enterprise covering CMP materials, OLED functional materials, photoresists, and advanced packaging materials, the company has shifted its business focus, benefiting from the trends of domestication of semiconductors and the development of high-end materials that are domestically controllable. If the company can continually translate its technological advantages into market share and further enhance its global competitiveness, its positioning as a platform-type semiconductor materials enterprise is expected to be further strengthened; conversely, if the industrialization progress of some new businesses falls below expectations, the market may reassess its growth trajectory.