E Town Semis (688729.SS) China AI Tour Factory visits Etcher and surface treatment tools to drive next stage growth

Equity Research 13 September 2026 | 5:53PM HKT

E-Town Semis (688729.SS): China AI Tour: Factory visits: Etcher and surface treatment tools to drive next-stage growth

We visited E-Town’s factory and hosted the management on Sep 10 in Beijing Allen Chang | during our China AI Tour. Key discussions focused on the company’s revenue and Goldman Sachs (Asia) L.L.C. order outlook, as well as its new product expansion in etcher and surface treatment Verena Jeng equipment. Management remains positive on revenue growth in 2H26 and 2027, and | Goldman Sachs (Asia) L.L.C. highlighted etcher and surface treatment as company’s key new product focus. We remain positive on the China Semi supply chain, riding on rising memory and advanced node capacity expansion and the generative AI trend supporting China semis ecosystem development. As a leading supplier of dry strip and RTP with a growing etch portfolio, we expect E-Town to benefit from rising equipment demand, while the ongoing localization of its component supply chain should support further profitability improvement. Maintain Neutral. Read more: CHIPS IV: China Semis self-sufficiency builds.

Key takeaways: Management remains positive on 2H26 and 2027 revenues growth, driven by strong China market, rising overseas demand, and localization trend in China. In 1H26, memory customers remain the major contributor of their orders, followed by logic customers, and specialty foundry customers; by product, photoresist stripping and rapid thermal processing equipment remains the major contributor of their orders, followed by etcher. Management highlights etcher and surface treatment equipment remains the key focus of all new products to the company, and expects shipment to retain strong ramp up in 2027 - 28E. For etcher, the company continues to aim at 10% market share in China in the future, driven by differentiate products, and riding on demand of HBM, Silicon photonics, and advanced packaging. The company’s 1H26 revenues growth was capped by raw materials tight supply; while the company sees gradual recovery and expects better growth in 4Q26 and 1Q27.

Valuation: We derive our 12M TP of Rmb32.9 on a target P/E multiple of 49.9x 2026E EPS. Our target P/E of 49.9x is derived from the correlation between P/E and EPS growth of E-Town’s peers, based on E-Town’s 2027-28E EPS YoY growth.

Key risks: Faster-/slower-than-expected semis capex expansion in China; Milder-/fiercer-than-expected competition; Faster-/slower-than-expected ramp up of RTP and dry etcher’s shipments

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Goldman Sachs E-Town Semis (688729.SS)

688729.SS 12m Price Target: Rmb32.90 Price: Rmb21.85 Upside: 50.6%

Neutral GS Forecast 12/25 12/26E 12/27E 12/28E Market cap: Rmb64.6bn / $9.6bn Revenue (Rmb mn) 5,076.3 6,204.4 8,937.8 10,231.4 Enterprise value: EBITDA (Rmb mn) 777.7 1,324.2 2,195.8 2,579.1 Rmb62.4bn / $9.3bn EPS (Rmb) m ADTV: Rmb1.3bn / $199.4mn P/E (X) China P/B (X) 8.4 6.4 5.3 4.5 Greater China Technology Dividend yield (%) 0.1 0.0 0.0 0.0 M&A Rank: 3 N debt/EBITDA (ex lease,X) (1.8) (1.6) (1.5) (2.0) Leases incl. in net debt & EV?: CROCI (%) Yes FCF yield (%) (0.8) 1.3 1.8 3.0

3/26 6/26E 9/26E 12/26E EPS (Rmb)

Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 11 Sep 2026 close.