Nomura: Piotech’s third-quarter revenue nearly flat as doubled orders and gross margin recovery support Nomura’s higher earnings forecasts

Why did revenue barely grow while the number of units accepted rose markedly?

In the third quarter of 2026, Piotech reported revenue of 2.308 billion yuan, up 1.8% year on year and 28.2% quarter on quarter. Year-on-year growth was subdued partly because acceptances were concentrated in the prior-year period and included a higher share of expensive equipment, and partly because this quarter’s acceptances leaned more toward three-chamber equipment with a lower average selling price.
The number of equipment units accepted rose more than 20% year on year, indicating that revenue growth alone understates growth in equipment volume. Nomura also sees the gross margin improvement as a sign of favorable pricing conditions and strong demand.
The third-quarter gross margin was 42.5%, above 34.4% a year earlier and 40.6% in the second quarter. However, the timing of equipment acceptance can fluctuate and continues to affect the pace of revenue recognition.

Third-quarter net profit was 1.088 billion yuan, up 135.4% year on year; recurring net profit was 561 million yuan, up 33.6%. A recovery in gross margin and lower administrative expenses supported profit, but fair-value gains on financial assets also reached 684 million yuan during the quarter.
Nomura raised its 2026 net profit forecast by 27% to 2.716 billion yuan, mainly reflecting higher third-quarter fair-value gains and lower administrative expenses. The latter was related to a reduction in share appreciation rights expenses following a decline in the share price.
The bank expects 2027 net profit of 2.194 billion yuan, approximately 19% below its raised 2026 forecast. It also raised its 2027 recurring net profit forecast by 9% to 1.815 billion yuan.

According to management, new orders more than doubled year on year in the first three quarters of 2026, and order prices and raw material prices were largely locked in. Nomura believes this improves visibility into the business in 2027.
Memory remains the largest end market: it accounted for more than 70% of orders in 2025. Its share declined in 2026, but the absolute value of its orders continued to grow; orders in logic chips also grew. Cumulative chamber shipments rose from more than 3800 at the end of the second quarter to more than 4400 at the end of the third quarter.
Nomura expects the gross margin to remain above 40% in 2026, while management’s guidance for 2027 is approximately 45%. A slowdown in downstream capacity expansion, customer price pressure and fluctuations in acceptance timing are factors affecting the conversion of these orders.

The new-generation Dione 300 eX wafer-to-wafer hybrid bonding equipment received its first acceptance in the third quarter. Nomura sees hybrid bonding as the next growth driver and expects the company to benefit from memory chip capacity expansion in China and domestic substitution of deposition equipment.
The company announced the acquisition of unlisted Wuxi Shangji, extending its product range into physical vapor deposition (PVD). Nomura believes this will help the company cover more 3D integration processes, including deposition, bonding, thinning and etching; acquisition integration is also a risk.
Given the higher sales share of lower-priced three-chamber products, Nomura lowered its 2027 revenue forecast by approximately 1%, but raised its net profit forecast for that year by 7% because of an improved gross margin outlook. The bank maintained its buy rating and cut its target price from 913 yuan to 900 yuan, using an enterprise value-to-sales valuation of 20 times forecast 2027 revenue.