#Domestic Substitution

Hanwei Technology: Good Technology, Bad Price

Hanwei Technology is a Shenzhen-listed industrial sensing company whose revenue now centers on smart instruments and integrated monitoring solutions rather than the stand-alone gas sensors it is still best known for, with a pending Hong Kong H-share listing adding a live capital-markets catalyst. Full-year 2025 revenue recovered 8.35% and attributable profit jumped 107.1% to CNY 158.8 million, but non-recurring-excluded profit was only CNY 38.6 million and the stock already trades around 75 times trailing earnings and 4.3 times book, well above its own CNY 16-22 ideal-buy range. Rating Avoid: the sensing technology and portfolio cleanup are real, but the price already assumes a cleaner, more proven earnings run rate than five years of weak cash conversion have delivered.

KINGSEMI: A Scarce Domestic Track Asset, Priced Well Ahead of the Evidence

KINGSEMI is a specialized Chinese semiconductor-equipment maker in front-end coat/develop tracks and single-wafer wet tools, now controlled by NAURA. 2025 revenue grew 11% to CNY 1.95 billion, but attributable profit fell 65% to CNY 71.7 million, and a one-month 79% surge lifted the market cap to CNY 88.5 billion, about 45 times sales. Rating Avoid: a genuinely scarce front-end track franchise, but at CNY 439 the price already assumes a mature cleaning-and-platform business the operating evidence does not yet support.

Anji Microelectronics: A High-Quality Compounder, but a Better Company Than Stock

Anji Microelectronics is China's leading CMP-slurry maker, supplying semiconductor polishing slurries and a widening platform of formulated wet electronic chemicals, with 2025 revenue of CNY 2.50bn (up 36%) and a disclosed global CMP-slurry share that climbed from about 7% in 2022 to 13% in 2025. The usage story is genuine: attributable net profit grew 47% to CNY 784m and functional wet chemicals surged 64%, yet after a roughly 161% one-year run the stock trades near CNY 305, about 88 times 2025 earnings, a price that already capitalizes years of flawless execution. Rating Watch: a real hard-tech compounder, but currently a better company than stock, with a serious re-underwriting zone only back at CNY 190-230.

Beijing Jingyi: A Genuine Semiconductor Subsystem Business at an Increasingly Demanding Price

Leaderdrive: China's Harmonic-Reducer Leader Priced for a Humanoid Future

Leaderdrive is China's domestic leader in harmonic-drive (strain-wave) reducers, the precision part inside robot joints, now extending from stand-alone components into mechatronic actuators. 2025 revenue jumped 47.3% to RMB 570.7 million with harmonic-reducer unit sales up 72.5%, yet at RMB 381.60 the stock trades near 123x sales and roughly 562x trailing earnings, pre-spending a humanoid-scale future that filings have not yet disclosed. Rating Avoid: a genuinely improving component leader at a speculative price, with every valuation scenario implying a loss from today's level until the humanoid ramp is proven or the price resets.

NAURA Technology Group SUN-R Investment Analysis

NAURA is China's broadest listed domestic wafer-fab equipment platform, selling into etch, deposition, cleaning and more, with 2025 process-equipment revenue of CNY 36.73 billion. Real usage clearly carries the story, with two tool families each topping CNY 10 billion in 2025, yet at roughly 48x forward earnings the stock already discounts years of near-flawless execution. Rating Watch: a genuine national champion worth owning on pullbacks into the CNY 500-580 fair-buy band, not chasing because the localization story is true.