Guotai Haitong: Domestic and international companies are expanding into cleanrooms; focus on order quality and profit realization

Guotai Haitong released a research report, focusing on order quality and profit realization. Overseas, UMC has launched the expansion of its Singapore P4 cleanroom; domestically, companies are successively laying out new plant and production line construction. The bank believes that new wafer fab construction and capacity expansion are driving demand for cleanroom system integration, facility systems, and hook-up engineering, and that project construction progress determines the pace of order delivery and revenue recognition for related companies. Guotai Haitong's main views are as follows: Facility systems: In the first three quarters of 2026, most companies achieved revenue growth, but improvement in recurring profitability still takes time In the first three quarters of 2026, Shanghai Gentech, MayAir Technology, and Kunshan Kinglai Hygienic Materials reported revenue growth of +16.64%, +14.38%, and +11.70% year-on-year, respectively; in Q3 alone, 6 of 7 companies achieved year-on-year revenue growth. On the profitability side, gross margins of most companies declined year-on-year. Shanghai Gentech's net profit attributable to shareholders rose +281.11% year-on-year, but its non-recurring net profit attributable to shareholders posted a loss of RMB48 million, mainly due to the delivery of earlier low-gross-margin orders; PNC Process Systems and Shanghai Shengjian Technology also recorded losses. MayAir Technology showed relatively prominent improvement in gross margin and non-recurring profit. Cleanroom system integration companies: Project execution drives revenue growth, high-gross-margin overseas projects drive profit release In the first three quarters of 2026, L&K Engineering and Both Engineering Technology reported revenue growth of +29.14% and +36.49% year-on-year, respectively. Among them, Both Engineering Technology's Q3 single-quarter revenue rose +113.51% year-on-year, mainly driven by concentrated construction of newly awarded projects. L&K Engineering's net profit attributable to shareholders rose +78.76% year-on-year, with gross margin up 3.91 pct, benefiting from relatively good gross margins on construction projects and effective control of subcontracting costs; Acter Technology Integration Group's net profit attributable to shareholders rose +58.61% year-on-year, with high-gross-margin overseas projects contributing significantly. On the order side, L&K Engineering's unfinished contract amount at the end of the first half was RMB7.898 billion; Acter Technology Integration Group and Both Engineering Technology's order backlogs at the end of Q3 grew +72.64% and +153.43% year-on-year, respectively, providing project reserves for subsequent performance. Industry chain summary: Order demand continues to be released; project structure and realization efficiency become key to profit growth In the first three quarters of 2026, order demand in the semiconductor cleanroom industry chain maintained growth, but order expansion and current-period performance improvement were not synchronized. Facility system companies, affected by delivery of earlier low-gross-margin orders, project execution cycles, and changes in business structure, have seen revenue growth at some companies not yet effectively profit; cleanroom system integration companies, affected by project revenue recognition pace, overseas business share, and cost control capabilities, show differences in profitability. Looking ahead, continued semiconductor capital expenditure, advancement of high-gross-margin overseas projects, and expansion of OPEX and high-end component businesses are expected to provide growth momentum for the industry chain. The bank believes that order quality, revenue recognition efficiency, and cash collection capability will become core indicators for judging the sustainability of corporate profitability. Risk warnings: Risk of downstream semiconductor capital expenditure falling short of expectations; risk of project delivery and revenue recognition falling short of expectations; risk of intensified industry competition and declining profitability; risk of accounts receivable collection and operating cash flow; risk of new product expansion and domestic substitution progress falling short of expectations.