Chengmei Materials has narrowed its losses in the first three quarters, and semiconductor materials will increase in volume next year

Chengmei Materials (4960) held a corporate briefing today. By reducing the proportion of low-margin products, adjusting product mix and controlling costs, the loss per share in the first three quarters narrowed from 2.11 yuan in the same period last year to 1.01 yuan. The company has also accelerated the deployment of packaging application film materials and advanced packaging materials, with the goal of starting to increase volume and contribute revenue in 2027 and 2028 respectively.

Chengmeicai's consolidated revenue in the third quarter was 1.861 billion yuan, a quarterly decrease of 9.2% and an annual decrease of 13.8%. The after-tax net loss was 235 million yuan, and the loss per share was 0.41 yuan. The cumulative revenue for the first three quarters was 5.732 billion yuan, an annual decrease of approximately 10%. The net loss attributable to the parent company was 573 million yuan, and the loss per share was 1.01 yuan. The loss was significantly reduced compared with the same period last year.

Chief Financial Officer Yang Chaozhi said that the company has implemented a "subtraction strategy" in the polarizing plate industry, gradually reducing the proportion of general-purpose TV products with fierce competition and low gross profit, adjusting the configuration of notebook products with weak demand, and concentrating resources on the development of automotive, industrial control and high-value IT applications.

In the first three quarters, the revenue of high-value products increased by 15% annually, and the proportion increased from 20% in 2025 to 25%, of which the proportion of automotive products increased from 7% to 10%. Chairman Song Yanyi pointed out that in the future, automotive, compensation film and OLED applications will be the three main axes, with the goal of increasing the revenue share of high-value products to 40% in the fourth quarter of 2027, and integrating production lines and centralized production to improve the cost structure.

However, the gross profit margin in the third quarter fell to minus 0.1% from 2.5% in the previous quarter. Yang Chaozhi said that mainly due to the weak demand for consumer electronics, declining production capacity utilization and rising raw material costs, the cost is difficult to completely pass on. Looking forward to the fourth quarter to the first quarter of next year, we will still maintain a conservative attitude towards the demand for consumer products and will continue to adjust our product mix and control costs.

In terms of new semiconductor businesses, packaging application film materials have entered customer verification in the first quarter of this year, and are targeted to contribute substantial revenue from next year; advanced packaging materials are being promoted through strategic cooperation and vertical integration. The clean room project has started in August this year. It is expected that equipment will be moved in the first quarter of next year and samples will be delivered in the second half of the year. The goal is to pass certification and contribute revenue starting in 2028.

Chengmeicai said that the net cash inflow from operating activities in the first three quarters was 404 million yuan, and it will continue to improve the operation of the polarizing plate industry and provide financial support for the research and development and capital expenditure of new semiconductor businesses.