Investment Highlights:

Event: On December 18, 2024 (Eastern Time), the U.S. Department of Defense officially removed AMEC from the Chinese Military Companies List (hereinafter referred to as the "CMC List").

In 2021, the U.S. Department of Defense included AMEC in the CCMC list, and then voluntarily removed it after communication with AMEC. On January 14, 2021, the U.S. Department of Defense included AMEC in the CCMC list (Communist Chinese MilitaryCompanies), and after active and effective communication with AMEC, the U.S. Department of Defense removed AMEC from the CCMC list on June 3, 2021.

In January this year, the U.S. Department of Defense included AMEC in the CMC list, and AMEC successfully launched a lawsuit in August to protect its rights. On January 31, 2024, the U.S. Department of Defense included AMEC in the CMC list, and the active communication of AMEC failed to take effect, and on August 14, 2024, AMEC formally sued the U.S. Department of Defense in the U.S. District Court for the District of Columbia, alleging that the U.S. Department of Defense's decision lacked factual basis and violated due process.

In December this year, the U.S. BIS issued a new round of export control measures, and AMEC was not included in the "Entity List". On December 2, 2024, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) revised the Export Control Regulations, a new rule on export control measures against Chinese semiconductors, to include 140 Chinese semiconductor-related companies in the "Entity List", including more than 100 semiconductor equipment-related companies.

AMEC focuses on legal compliance and has strong overseas rights protection capabilities, and is expected to expand overseas markets in the future. According to AMEC's official account, in the past 17 years, AMEC has won four of its five legal battles with U.S. equipment companies and the U.S. government, and successfully settled twice. Since 2021, AMEC has successfully defended its rights and interests against the backdrop of the United States' continued increase in trade restrictions in the semiconductor field with China, and is expected to expand its sales scale in the global market in the future with R&D progress and product performance improvement.

Investment Analyst Opinion: Maintain earnings forecast, maintain "buy" rating. The company continues to benefit from the expansion of downstream storage plants, and at the same time, the localization rate of the company's etching equipment is expected to be further improved, and the verification and signing of thin film deposition equipment is progressing smoothly, maintaining the company's profit forecast, and the company's revenue in 2024~2026 is expected to be 82.5, 116.2, and 14.92 billion respectively, with a year-on-year growth rate of 31.7%, 40.8%, and 28.5%, respectively, and a net profit attributable to the parent company of 18.1, 24.4, and 3.22 billion, with a year-on-year growth rate of 1.2%, 35.1%, and 31.8% respectively , corresponding to dynamic P/E ratios of 68, 50, and 38 times, respectively. Maintain "Buy" rating.

Risk warning: lower-than-expected demand will affect the pace of fab expansion; The device verification results are not as expected.