{"text":[[{"start":8.18,"text":"Using intense lasers or particle beams, these machines carve intricate patterns that form the basis of modern electronics and enable the fast evolution of AI. Spurred by rising demand for imaging tools, one of China’s leading makers of lithography equipment for the semiconductor industry is seeking to list on the Hong Kong stock market, bringing international ambitions and an interesting back story. In China’s semiconductor equipment industry, founders typically come from technical backgrounds. But Circuit Fabology Microelectronics Equipment Co. Ltd. (688630.SH) was set up by a former accountant turned entrepreneur, who came into the lithography business by chance."}],[{"start":54.97,"text":"Cheng Zhuo began her career as an accountant at an Anhui machinery factory after graduating from a vocational school. When the factory shut down in the 1990s, she entered the auction business and later moved into bulk commodity trading."}],[{"start":71.66,"text":"In 2013, she was asked to participate in the debt restructuring of lithography equipment maker Hefei Advantools Semiconductor. Although the restructuring failed, the company’s technology and its engineering team became the foundation for Cheng to establish Circuit Fabology in 2015."}],[{"start":93.75999999999999,"text":"Essential tools"}],[{"start":95.58999999999999,"text":"Circuit Fabology focused on developing and manufacturing equipment for high-precision lithography. These direct-imaging tools are used to make printed circuit boards (PCB), substrates for integrated circuits and advanced packaging platforms for microchips."}],[{"start":113.32999999999998,"text":"Direct-writing lithography uses computer-controlled light beams to trace complex circuit patterns, eliminating the need for photomask templates. The resolution is typically measured in microns, rather than the nanometers required for wafer fabrication, but it suffices for printed circuit boards (PCBs) and advanced packaging processes."}],[{"start":134.95999999999998,"text":"The company has built a strong position in this specialized market. According to third-party data in its listing application, Circuit Fabology became the world’s largest supplier of PCB direct-imaging equipment in 2024, measured by revenue, with a market share of 15%. Its customers include the world’s top 10 PCB manufacturers and about 70% of the 100 leading PCB companies. Its products include equipment for PCB direct imaging and direct-writing lithography tools for semiconductors. The PCB segment accounted for about 76% of revenue last year, remaining the main income source. The firm’s semiconductor equipment, mainly used in wafer-level and advanced packaging, typically carries higher gross margins than the PCB business."}],[{"start":185.89999999999998,"text":"The company’s revenue rose about 15% to 954 million yuan ($139 million) in 2024 from the prior year. Net profit was 179 million yuan in 2023, before slipping slightly to 161 million yuan in 2024, as a higher proportion of lower-margin PCB equipment sales weighed on earnings. As a result, overall gross margin fell from 40.9% to 35.5%."}],[{"start":221.83999999999997,"text":"As demand for semiconductor lithography tools increased, the company’s revenue surged 47.6% in 2025 to 1.41 billion yuan, while net profit jumped 80.4% to 289 million yuan. Gross margin also rebounded to 39.1%. Sales of higher-margin advanced packaging and semiconductor equipment began to scale up, lifting the segment’s revenue share from 11.5% in 2024 to 16.6% in 2025."}],[{"start":257.52,"text":"Government subsidies and other income also feature in the company’s annual accounts, contributing meaningfully to earnings, although at a decreasing rate. From 2023 through 2025, other income and net gains totaled 56.86 million yuan, 53.03 million yuan and 43.99 million yuan, accounting for roughly 32%, 33% and 15% of net profit in those years."}],[{"start":292.21,"text":"Receivables challenge"}],[{"start":295.06,"text":"Despite its market position, the company faces cash flow pressure. The IPO application shows that accounts and bills receivable have remained relatively high in recent years. From 2023 to 2025, the amounts were around 850 million yuan, 1.02 billion yuan and 1.09 billion yuan, equivalent to about 102.5%, 106.6% and 77% of annual revenue. Although the ratio has declined, it remains higher than for most manufacturing companies."}],[{"start":332.75,"text":"Meanwhile, the turnover time for accounts receivable was 318 days in 2023, rising to 361 days in 2024 before falling to 275 days in 2025. Such a pattern is not uncommon in the semiconductor equipment sector. Some clients are granted credit terms of six to 12 months, while major customers can enjoy terms of up to 20 months, due to long production and customer acceptance cycles, Circuit Fabology said. The company’s operating cash flow registered a negative 129 million yuan in 2023 and a 71.55 million yuan deficit in 2024, before returning to positive territory in 2025."}],[{"start":382.64,"text":"Circuit Fabology listed on the Shanghai Stock Exchange’s STAR Market in 2021. Over the past six months, its share price has risen about 23%, giving the company a forward price-to-earnings ratio of roughly 114 times. By comparison, chip equipment and services supplier KLA Corp. (KLAC.US) trades at a multiple of about 42 times, whilesemiconductor hardware firm ASMPT (0522.HK) is valued at around 41.3 times. The comparison suggests mainland investors place a premium on technology companies associated with China’s push for self-reliance in critical industries by substituting domestic products for imports."}],[{"start":432.77,"text":"The company said it planned to use the IPO proceeds to develop high-resolution technology, optimize its processes using artificial intelligence, expand its offshore production facilities in Thailand, and boost global sales. Equipment manufacturing is inherently a capital-intensive business. As competition intensifies, investors will keep a close eye on whether Circuit Fabology can maintain its technological edge while improving its cash flow in the years ahead."}],[{"start":474.59000000000003,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1774005143_7604.mp3"}