What are the growth drivers and gross margin outlook?

  • JCET management said AI remains a key growth driver, with strong demand from AI data centers and automotive and industrial applications; by contrast, smartphone-related demand remains relatively weak.
  • The company expects its gross margin to remain stable or improve, supported by price increases. The price adjustments in 2026 reflect both the passing through of costs and changes in supply and demand, so the increases are not entirely attributable to stronger demand.

Will tight HBM supply slow advanced packaging capacity expansion?

  • Management believes HBM supply constraints have a limited impact on the ramp-up of advanced packaging capacity and expects shortages to ease gradually as procurement sources diversify and customers flexibly adopt different packaging configurations.
  • The company said advanced packaging capacity expansion remains on schedule and expects Jiangyin JME to generate several billion yuan in revenue by 2027.

When will new packaging technologies create business opportunities?

  • Based on customer forecasts, 2.5D packaging is expected to enter commercial production at overseas plants in the first quarter of 2027, with the aim of scaling up in 2028; domestic plants will follow, subject to customer certification.
  • The company has completed technical preparations for mass production of CPO, while NPO adoption is progressing faster than CPO adoption. Morgan Stanley listed the pace of the rollout of 2.5D and 3D advanced packaging as a factor affecting its assessment.
  • Morgan Stanley assigned JCET an Overweight rating and a price target of 90.20 yuan; the closing price listed in the report for 27 October 2026 was 53.29 yuan.