SVG Tech Group's Adjusted Net Profit Rises 222.54% in H1

Suzhou Weigu recently released its half-year report. In the first half, the company posted revenue of 1.035 billion yuan, up 5.39% year on year; net profit attributable to shareholders of 49.7604 million yuan, up 62.29%; and net profit excluding non-recurring items of 41.8230 million yuan, up 222.54%.

Profit growth far outpaced revenue, indicating a qualitative shift in the business mix — the contribution of high-value-added semiconductor equipment to earnings is now fully emerging. The core engine of this change is Weipu Semiconductor.

On January 20 this year, when Suzhou Weigu hosted a research visit by 16 institutions including CITIC Securities and Hundon Investment, it disclosed that the acquisition of a 51% stake in Changzhou Weipu (the predecessor of Weipu Semiconductor) had been completed. The company, which specializes in photomask and wafer defect inspection equipment, is one of very few domestic manufacturers to achieve volume production of photomask defect inspection equipment. Its core technologies and components are all developed in-house and localized, and, according to the company, its products have entered production lines at leading customers including SMIC, Luwei Optoelectronics and Qingyi Photoelectric.

In its first full half-year under consolidation, Weipu Semiconductor delivered an outstanding performance: revenue of 94.2204 million yuan, up 524.78% year on year; net profit of 50.6827 million yuan, swinging to profit and surging 1384.23%, implying a net margin as high as 53.8% — clear evidence of the high value added by high-end inspection equipment. Its contribution to Suzhou Weigu's net profit attributable to shareholders reached 24.7773 million yuan, or 49.79% of the company's total.

In addition, the high-end intelligent equipment business posted a gross margin of 77.73%, far above the 23.91% of micro-nano optics products and 16.03% of reflective materials, directly lifting the company's overall gross margin from 20.05% in the same period last year to 28.34%. Semiconductor equipment has become the company's largest source of profit.

Beyond the domestic substitution market, Weipu Semiconductor's overseas breakthroughs also offer upside expectations. According to the company, during the reporting period Weipu made its first export to a Korean plant of a global industry leader, and has also secured orders from a leading customer in China's Taiwan region, with shipments expected in the second half. If these orders are delivered as planned, it will mark the initial recognition of the company's product performance and quality by high-end international customers.

In the domestic market, shipments of Weipu's batch supplies to leading wafer and mask makers continue to climb. Combined with SVG's own laser direct-write lithography equipment and Weipu's inspection tools, this forms a full-industry-chain loop of "mask manufacturing + defect inspection," and the company has explicitly designated lithography equipment as its future strategic development direction.

On August 17, the company disclosed that actual controller Chen Linsen and shareholder Yu Zhangxing would transfer a combined 5% stake to Hede Business School Growth Private Fund. The transferee voluntarily extended the lock-up period from 12 months to 18 months — a detail that to some extent reflects institutional investors' recognition of the long-term growth logic of its semiconductor equipment business.

Beneath the bright spots of the transition, however, weakness in the traditional core business and a strained financial structure cannot be ignored. Excluding consolidation effects, revenue from the company's micro-nano optics core business fell about 4.93% year on year. Demand for anti-counterfeiting films for vehicle licenses and cards remains under pressure, and the tobacco and liquor packaging industry is still in a cyclical adjustment phase. In reflective materials, subsidiary Huarisheng remains loss-making, with no clear relief in overall operating pressure. Although the company has repeatedly stated it will "effectively dispose of inefficient assets with poor profitability," no substantive action had been taken as of the release of the half-year report.

Overall, from micro-nano optics to semiconductor equipment, SVG is undergoing a profound strategic shift. For SVG, the main narrative going forward may center on the rapid advance of its semiconductor equipment business, but whether it can properly dispose of inefficient assets, balance financial risks and keep converting orders in overseas markets will be the key variables determining the ultimate success of this transformation.

The leap from "materials" to "equipment" is an opportunity, but also a dual test of strategic resolve and execution efficiency. OFweek Optics will continue to track its subsequent market progress.