Nomura Orient International: CFMEE’s third-quarter orders and customer collections improve, while lower valuations drag down target price

How fast did third-quarter results grow?

In the third quarter of 2026, CFMEE’s revenue was 676 million yuan, up 142.13% year on year and 14.42% quarter on quarter. Net profit was 180 million yuan, up 216.66% year on year and 3.92% quarter on quarter. Overall, the results were in line with Nomura Orient International’s expectations.
Revenue for the first three quarters was 1.781 billion yuan, up 90.84% year on year; net profit was 461 million yuan, up 131.98% year on year. Net profit grew faster than revenue, while profitability improved.

In the first three quarters of 2026, the gross margin was 43.55%, up 1.46 percentage points year on year; the net margin was 25.89%, up 4.59 percentage points. Nomura Orient International attributed the improvement mainly to a shift in the product mix toward higher-end products and operating leverage from increased scale.
Combined selling, administrative, research and development, and finance expenses fell to 14.10% of revenue, down 2.75 percentage points year on year. PCB applications of the company’s direct imaging lithography equipment have expanded from single-layer, multilayer and flexible boards to areas including high-density interconnect boards, substrate-like PCBs and IC substrates.

According to the investor relations activity record dated 29 October, the company’s new orders continued to grow quarter on quarter in the third quarter, supported by demand from the PCB and semiconductor industries.
Net cash flow from operating activities in the third quarter was 191 million yuan, up 174.78% year on year and 50.48% quarter on quarter. Higher customer collections and a greater proportion of advance payments drove improvements in operating cash flow and contract liabilities; contract liabilities stood at 180 million yuan at the end of September, up 22.39% from the end of June.
Meanwhile, notes and accounts receivable totaled 1.269 billion yuan at the end of September, up 9.02% from the end of June. Nomura Orient International identified weak receivables collection and inventory impairment as risks.

Nomura Orient International expects equipment upgrades and overseas expansion to support growth in the core PCB equipment business, while semiconductor-related businesses such as advanced packaging and IC substrates will also continue to scale up. The bank maintained its revenue forecasts for 2026 through 2028 at 2.568 billion yuan, 3.76 billion yuan and 4.845 billion yuan, respectively, and its net profit forecasts at 676 million yuan, 1.114 billion yuan and 1.553 billion yuan, respectively.
Citing recent market volatility and lower peer valuations, the bank reduced its target price-to-earnings multiple from 69 times to 49 times, with the latter broadly in line with the average expected 2027 price-to-earnings multiple of peers. Based on its unchanged 2027 earnings per share forecast of 7.60 yuan, it cut the target price from 524.66 yuan to 372.59 yuan.
Nomura Orient International maintained its Buy rating; the new target price implies 54.7% potential upside from the closing price of 240.92 yuan on 4 November 2026. The bank is watching for further breakthroughs in direct imaging lithography equipment for advanced packaging and the pace at which IC substrate equipment scales up.