Goldman Sachs E-Town Semiconductor (688729.SS): China AI Tour: Factory Visit: Etch and Surface Treatment Equipment to Drive the Next Phase of Growth
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Goldman Sachs visited E-Town Semiconductor's Beijing plant on September 10, 2026, during its China AI tour, discussing revenue and order outlooks and new-product expansion in etch and surface treatment equipment. The bank maintains Neutral with a 12-month target of RMB32.90, derived from a 49.9x target P/E on 2026E EPS (peer P/E-to-EPS-growth relationships applied to 2027-28E EPS growth), implying 50.6% upside versus the September 11 close of RMB21.85; market capitalization is RMB64.6 billion. Management is optimistic on revenue growth in 2H26 and 2027, driven by strong China demand, rising overseas demand and localization. In 1H26 orders, memory customers contributed most, followed by logic and specialty foundries; photoresist strip (dry strip) and rapid thermal processing (RTP) tools led by product, ahead of etchers. Etch and surface treatment equipment is the focus of all new products, with shipments expected to ramp strongly through 2027-28 and a future 10% China etch share target supported by HBM, silicon photonics and advanced packaging demand. 1H26 revenue growth was constrained by tight raw material supply, with better growth expected in 4Q26 and 1Q27. Goldman forecasts revenue rising from RMB6,204 million (2026E) to RMB10,231 million (2028E) and EPS from RMB0.42 to RMB0.78. Key risks: capex timing, competition intensity, and RTP/dry-etch ramp pace.