The performance growth pressure for North Huachuang under a high base is also coming, and how the terminal demand in various fields unfolds may be an important factor in the increase of domestic semiconductor equipment penetration.
With the recently disclosed 2024 annual report and 2025 Q1 report achieving historical best levels, North Huachuang plans to distribute a cash dividend of 566 million yuan in 2024, while the company proposed a capital increase distribution plan for the first time in nearly a decade, intending to increase 3.5 shares for every 10 shares. As of the latest closing date, North Huachuang’s total market value is 242.1 billion yuan, with a stock price of 453.28 yuan, situated in the historical highest price range, and the stock price has risen nearly 16% this year.
On the evening of April 25, North Huachuang (002371.SZ) released its 2024 annual report and 2025 Q1 report. In the first quarter of this year, North Huachuang maintained growth on the basis of last year’s record high revenue and net profit, achieving an operating income of 8.206 billion yuan, a year-on-year increase of 37.9%, and a net profit attributable to the parent company of 1.57 billion yuan, a year-on-year increase of 38.8%. Both revenue and net profit set historical records for the same period, with the growth attributed to breakthroughs in multiple equipment and an expansion of market share.
After several years of steady performance growth, North Huachuang’s revenue scale approached 30 billion yuan last year, and the performance growth pressure under a high base has also emerged. The semiconductor industry’s prosperity is likely to maintain an upward trend in 2025, and how terminal demand unfolds may be an important factor in the increase of domestic semiconductor equipment penetration.
Last Year, Semiconductor Equipment Revenue Exceeded 20 Billion
The global integrated circuit market size reached 626 billion dollars, with global integrated circuit equipment sales reaching 116.1 billion dollars, both figures hitting historical highs. Mainland China remains the largest demand market for global integrated circuit equipment, with annual sales reaching 49.1 billion dollars.
Against this backdrop, North Huachuang achieved its best historical performance in 2024, with an operating income of 29.838 billion yuan, a year-on-year increase of 35.14%; net profit attributable to the parent company was 5.621 billion yuan, a year-on-year increase of 44.1%. In the fourth quarter of last year, North Huachuang’s quarterly revenue scale first broke through 9 billion yuan, reaching 9.485 billion yuan, with a net profit attributable to the parent company of 1.158 billion yuan, a quarter-on-quarter decrease of 26.52%. In terms of profit distribution, North Huachuang plans to distribute a cash dividend of 10.6 yuan for every 10 shares and increase 3.5 shares, with a total annual dividend of 566 million yuan.
North Huachuang’s main products include two categories: electronic process equipment and electronic components. Among them, electronic process equipment includes semiconductor equipment, vacuum, and new energy equipment. In 2024, this business achieved an operating income of 27.706 billion yuan, a year-on-year increase of 41.28%, with a gross profit margin of 41.5%, an increase of 3.83 percentage points year-on-year, driving total revenue growth through dual growth in revenue and gross profit margin. The revenue from electronic components was 2.094 billion yuan, a year-on-year decrease of 13.91%, with a gross profit margin of 60.32%, a year-on-year decrease of 5.33 percentage points.
The financial report disclosed that in 2024, North Huachuang’s semiconductor equipment achieved revenue exceeding 21 billion yuan, accounting for 70.4% of total revenue. This business includes five categories: etching, thin film deposition, thermal processing, wet processing, and ion implantation, with etching and thin film deposition equipment being the main market demand. According to third-party agency data, etching equipment and thin film deposition equipment account for 15.7% and 22.1% of integrated circuit equipment capital expenditure, respectively.
Among North Huachuang’s semiconductor equipment, the revenue scale of etching equipment and thin film deposition equipment is the highest, and the year-on-year growth rate is also the fastest. Last year, the company’s etching equipment revenue exceeded 8 billion yuan (nearly 6 billion yuan in 2023), and thin film deposition equipment revenue exceeded 10 billion yuan (over 6 billion yuan in 2023), with a combined revenue exceeding 18 billion yuan, accounting for 85.71% of semiconductor equipment revenue.
It is worth noting that thin film deposition equipment is North Huachuang’s first semiconductor major equipment category to exceed 10 billion yuan in revenue. The company stated that by the end of 2024, it had formed a full series layout of physical vapor deposition (PVD), chemical vapor deposition (CVD), atomic layer deposition (ALD), epitaxy (EPI), and electroplating (ECP) equipment, with last year’s thin film deposition equipment revenue growing by 66.67% year-on-year. Additionally, etching equipment revenue grew by over 30% year-on-year.
In semiconductor equipment, North Huachuang’s thermal processing equipment and wet processing equipment revenue exceeded 2 billion yuan and 1 billion yuan last year, respectively. Ion implantation equipment is a new market entered by the company in March 2025 and did not contribute to the 2024 performance.
Outside of semiconductor equipment, North Huachuang’s vacuum and new energy equipment includes crystal production equipment, vacuum thermal equipment, and new energy photovoltaic equipment. In 2024, the photovoltaic sector entered a phase of capacity reduction, and the pace of expansion has significantly slowed. The annual report did not disclose whether this would affect North Huachuang’s related equipment business.
2025 Performance Growth Depends on Terminal Demand
The demand for equipment largely depends on the prosperity of the industry. In 2024, the global semiconductor cycle is on the rise, benefiting from the rapid development of artificial intelligence (AI), high-performance computing (HPC), and the recovery of automotive electronics and consumer electronics, the semiconductor industry is entering a new growth cycle.
Entering 2025, the rapid development momentum of AI shows no signs of slowing down, with major global manufacturers increasing capital expenditure for AI deployment. The electrification, intelligence, and connectivity of new energy vehicles are further accelerating, and the demand for chips in higher-end smart cars is expected to increase to 3000 chips per vehicle.
With the improvement of industry prosperity, North Huachuang’s Q1 performance set a historical record for the same period, achieving an operating income of 8.206 billion yuan, a year-on-year increase of 37.9%, a quarter-on-quarter decrease of 13.49%, and a net profit attributable to the parent company of 1.57 billion yuan, a year-on-year increase of 44.75%, and a quarter-on-quarter increase of 36.42%. The company stated that the main reason for the Q1 performance growth was that several new products in the integrated circuit equipment field, such as capacitive coupling plasma etching equipment (CCP), atomic layer deposition equipment (ALD), and high-end single-wafer cleaning machines achieved key technological breakthroughs, while the market share of several mature products steadily increased, and the company’s market share continued to expand.
Since 2020, North Huachuang’s performance scale has steadily increased, with operating income growing from about 6 billion yuan to nearly 30 billion yuan, and net profit attributable to the parent company growing from about 300 million yuan to about 5.6 billion yuan. As the performance base continues to expand, the company also faces pressure on performance growth rates. On one hand, the base for new energy photovoltaic, lithium battery, and hydrogen energy equipment is relatively small, and significant revenue growth is expected to be difficult, especially as the photovoltaic industry is still in a stage of supply-demand mismatch, with the entire industry reducing production to maintain prices, leading to a decline in equipment demand.
On the other hand, after several years of development, domestic equipment manufacturers have significantly increased their local market share. Although there is still considerable upward space, it depends on the specific situation of downstream demand changes.
“The consensus among market participants is that the semiconductor industry’s prosperity will maintain an upward trend in 2025, with AI and automotive electronics expected to become the ‘main force’ driving semiconductor demand this year. Whether the consumer electronics market demand can further increase may depend on the actual progress of AI smartphones, with specific developments likely to be revealed in the second half of the year,” said a TMT analyst. “The major categories of semiconductor equipment have basically achieved domestic substitution, with etching, cleaning, and thin film deposition equipment having relatively prominent coverage rates. It is expected that with the growth of downstream demand, leading domestic equipment manufacturers can maintain certain performance growth based on their technological advantages and market share advantages. However, from the perspective of the recovery rhythm of the semiconductor cycle, the fastest growth phase for equipment is at the initial stage of prosperity recovery, and as prosperity begins to rise to its peak, equipment growth tends to gradually slow down.”
“However, the current situation is different from the past. AI and automotive electronics are in a stage of rapid development, with the former involving GPU, HPC, and the latter involving various types of storage, sensors, analog chips, and power chips. The chip process iteration requires more precise manufacturing equipment, but from the perspective of the development of downstream application fields, the time cycle for chips from research and development to large-scale application in terminal products is uncertain. Overall, the trend of expanding local market share for domestic equipment manufacturers has a high degree of certainty, with leading equipment manufacturers benefiting the most. In the short to medium term, changes in terminal demand growth are the ‘deciding factor’ for the semiconductor industry’s performance,” the analyst added.
Editor on duty: Yulin