Profit under pressure ahead of release-film capacity expansion as Nomura Orient International raises Jiemei Technology’s long-term earnings forecasts

Why was profit weak despite third-quarter revenue growth?

In the third quarter of 2026, the company reported revenue of 771 million yuan, up 36.8% year on year and 16.6% quarter on quarter. Net profit was 86 million yuan, up 10.5% year on year but down 5% quarter on quarter. Gross margin was 33.6%, down 0.6 percentage points year on year and 0.2 percentage points quarter on quarter.
The results fell short of Nomura Orient International’s expectations. The bank attributed this mainly to slower-than-expected revenue growth in electronic packaging materials, gross-margin dilution during the initial ramp-up of the release-film business, and higher-than-expected selling expenses for developing new businesses. The selling-expense ratio rose 0.2 percentage points year on year in the first nine months of 2026.

Nomura Orient International cut its 2026 revenue forecast by 5% to 2.807 billion yuan, lowered its overall gross-margin assumption by 0.6 percentage points and raised its selling-expense ratio assumption by 0.2 percentage points. As a result, it cut its net-profit forecast by 16% to 335 million yuan.
Within that, the 2026 revenue forecast for electronic packaging materials fell from 2.242 billion yuan to 2.06 billion yuan, a reduction of 8%; the forecast for electronic-grade film materials rose from 605 million yuan to 635 million yuan.

On 27 October, the company announced plans to add annual release-film capacity of 768 million square metres in Anji, with a gradual ramp-up expected from mid-2028. Nomura Orient International is optimistic about growth in the existing business and the expansion potential, and expects higher release-film shipments to support business growth in 2027–2028.
The bank raised its electronic-grade film materials revenue forecasts for 2027 and 2028 by 20% and 35%, respectively, to 1.011 billion yuan and 1.407 billion yuan. Expecting improved economies of scale, it raised its segment gross-margin assumptions for those years by 4 and 3 percentage points, respectively, to 24% and 28%.
Accordingly, the company’s overall net-profit forecasts for 2027 and 2028 were both raised by 14%, to 520 million yuan and 607 million yuan, respectively. The recovery in downstream demand, the pace of new-product ramp-up and changes in raw-material prices will all affect this earnings trajectory.

Nomura Orient International shifted its valuation base from 2026 to 2027, using forecast earnings per share of 1.15 yuan for 2027 and a price-to-earnings multiple of 48 times. It cut its target price from 66 yuan to 55 yuan; the target implies 26.7% upside to the 27 October 2026 closing price of 43.40 yuan. The rating was upgraded from neutral to buy.
The target price-to-earnings multiple of 48 times exceeds the 2027 peer average of 42.7 times. The bank justified the premium by expecting the company’s compound earnings growth rate over 2026–2028 to exceed the peer average.