Changzhou Fusion New Material Overview
Fusion New Material is the world's largest supplier of photovoltaic (PV) conductive paste. By CIC data it had the highest PV-paste sales of any manufacturer worldwide in the first nine months of 2025, with a 27% share. Its silver-based front and rear pastes metallise TOPCon, PERC, HJT and back-contact (X-BC) solar cells. In 2025 the company shipped 1,867 tonnes and reported CNY 14.59 billion in revenue. Because pricing is "silver plus processing fee", revenue moves with the silver price and margins run thin, at single-digit gross margin. To diversify away from a PV business that was 99.44% of 2024 revenue, Fusion bought SK enpulse's DUV blank-mask business, now Lumina Mask. That business supplies ArF/KrF binary and phase-shift blank masks for 14–90 nm nodes and is qualified at SK hynix and at Taiwanese and Chinese mask shops. Fusion is building 40,000 pieces a year of blank-mask capacity in Shanghai, aimed at a Chinese market that depends almost entirely on Japanese imports. Its stated long-term goal is more than 50% share of China's blank-mask market.
What the company does. Fusion develops, manufactures and sells electronic pastes and related functional materials. Its core business is conductive paste used to form the metal electrodes (fingers and busbars) of crystalline-silicon solar cells. The company describes itself as an R&D-driven advanced-materials company in China and a leading global provider of complete metallisation solutions for PV cells. Its capabilities span synthesis of inorganic and organic materials, formulation, process engineering, analysis and application development. In 2025 and 2026 the company added a second business, semiconductor materials: photomask blank substrates (Lumina Mask) and, at an incubation stage, electron-beam photoresist (Shanghai Juxinguang New Materials, established 28 February 2026).
Business model and revenue model. The business is almost entirely product sales. PV paste is quoted at the silver price plus a processing fee. Silver makes up more than 99% of direct material cost, according to the 2022 cost structure cited by brokers. Movements in the silver price therefore pass through to revenue but not to gross profit per kilogram. The processing fee, which depends on product generation, overseas mix and technology route, drives profitability. Service, subscription and licensing revenue is not material. On the latest reported mix, PV conductive silver paste was 98.07% of main business revenue, other (supplementary) products 1.30%, and scrap and other sales 0.62%. In 2024, PV conductive paste was 99.44% of revenue.
Value-chain position. In PV, Fusion sits between silver ingot and powder suppliers upstream and cell makers downstream. It has integrated backward into electronic-grade silver powder (1,000 t/yr at Jiangsu Delijv) and glass frit (300 t/yr). In semiconductors, Lumina Mask is a tier-2 materials supplier. It coats polished synthetic-quartz substrates with chromium or MoSi absorber and phase-shift films plus resist, and sells the resulting blank masks to captive mask shops at fabs (such as SK hynix) and to merchant photomask makers (such as Taiwan Mask Corporation and Chinese mask houses). Those customers write circuit patterns onto the blanks to make reticles.
Customer types and end-markets.
Crystalline-silicon PV cells (TOPCon, PERC, HJT, BC): Customer type: Integrated module makers and specialist cell makers in China and overseas (Southeast Asia, Middle East, India, Turkey, US supply chains); Named customers (as disclosed): Tongwei Solar, Risen Energy, Hengdian DMEGC, JA Solar, Jolywood, Runergy, Canadian Solar, Jinzhai Jiayue, Yingfa Ruineng (IPO-era list)
Semiconductor lithography (DUV ArF/KrF): Customer type: Captive mask shops at memory and logic fabs; merchant photomask makers; Named customers (as disclosed): SK hynix, Taiwan Mask Corporation (TMC), DiSiWei (迪思微), Zhongwei Mask (中微掩模); Chinese fabs in vendor-code setup and qualification
- Electronics (5G filters, semiconductor packaging pastes, MLCC pastes, 0BB module adhesives) — Customer type: Component and module makers; Named customers (as disclosed): Not individually disclosed
Independent characterisation. Fusion is in substance a high-turnover, working-capital-heavy materials converter. Its competitive edge is formulation speed when cell architectures change (PERC to TOPCon/LECO to BC/HJT), procurement scale in silver, and balance-sheet strength for financing customers' receivables. That last point matters more when silver prices rise, because each tonne of paste ties up more capital. The Lumina Mask acquisition is a deliberate move into a higher-margin, qualification-gated market. The comparison point is S&S Tech, the Korean blank-mask peer, which reported a 34.6% gross margin and a 20.7% operating margin in 2025. For 2026–2027, however, semiconductor revenue will be immaterial to group results, and group earnings will remain a function of PV paste volumes, processing fees and silver-price accounting effects.
Strategy
Stated strategy themes (FY2025 annual report and the 2026 "Improve Quality, Raise Efficiency, Return to Shareholders" action plan). The company frames its strategy around four themes. The first is to deepen its core PV metallisation leadership by covering all cell technology routes (TOPCon, HJT, BC, perovskite-tandem readiness). The second is to lead the "reduce silver – replace silver – silver-free" transition: base-metal pastes (silver-nickel, silver-copper, pure copper), low-solid-content pastes, and fine-line or zero-busbar printing. The third is vertical integration into core raw materials ("powder, paste, adhesive"): silver powder, glass frit and adhesives, for supply security and cost. The fourth is to globalise the customer base as PV supply chains move offshore. Above these sits a platform strategy of becoming an "advanced materials platform enterprise". Semiconductor materials are positioned as the second growth curve, under the slogan "paste secures the base, masks open the new" (浆料固本、掩膜拓新).
Strategic initiatives, last 24 months.
Lumina Mask acquisition: Date: Announced 9 Sep 2025; closed 31 Mar 2026; Detail: DUV ArF/KrF blank masks; KRW 65 billion paid (CNY 298 million); Targets / status: Main domestic customers' vendor codes established; annual framework orders signed with some; aim to complete qualification at leading customers in 2026
Shanghai blank-mask base: Date: Groundbreaking July 2026; Detail: About CNY 1.1 billion; 40,000 pcs/yr in two phases; Targets / status: Phase I (20,000 pcs/yr) equipment ordered; capacity build 1H 2027, ramp 2H 2027; Phase III depends on demand
Korean capacity upgrade: Date: 2026 onward; Detail: Retrofit plus 10,000 pcs/yr added to the existing 10,000; Targets / status: Timing not publicly disclosed
E-beam photoresist (Shanghai Juxinguang): Date: 28 Feb 2026; Detail: Resist for mask writing, synergistic with blanks; Targets / status: R&D team and product definition done; pilot line, scale-up and sampling to fabs
Shanghai Guoju Tonghui investment platform: Date: 15 Sep 2026; Detail: CNY 300 million for 31.58% of a CNY 950 million partnership; co-investor Juhe Zhiyuan is controlled by the actual controller; Targets / status: Focus on semiconductor-materials investments and incubation
H-share listing: Date: Plan 3 Nov 2025; filed 14 Jan 2026; lapsed 14 Jul 2026; Detail: Up to 15% of enlarged capital plus a 15% over-allotment option; Targets / status: Intended use of proceeds: domestic blank-mask facility, R&D, strategic investment and M&A, working capital
Upstream materials integration: Date: Completed Dec 2025; Detail: Delijv 1,000 t silver powder; 300 t glass frit; Targets / status: In production
Base-metal and copper metallisation: Date: 2025–2026; Detail: Silver-nickel, silver-coated copper, seed layer plus copper paste; Targets / status: Customer-specific development with integrated module makers and equipment vendors
Overseas expansion: Date: Ongoing; Detail: Thailand plant (600 t); overseas channel building; Targets / status: Overseas revenue above CNY 2 billion in 2025 (+129%)
Shareholder return plan 2025–2027: Date: Dec 2025; Detail: Formal three-year dividend policy; Targets / status: FY2025 dividend CNY 4.32 per 10 shares
ESG and decarbonisation: Date: 2025 ESG report (Apr 2026); Detail: Dual-carbon goals built into strategy; on-site solar; zero-discharge reclaimed water; Targets / status: Unit energy consumption down year on year in 2025
Medium-term targets and guidance. Fusion does not publish formal numeric revenue or profit guidance. Its stated operational targets are: more than 50% long-term share of China's blank-mask market; completing qualification at the main domestic customers within 2026; Shanghai Phase I production ramp from 2H 2027; and sustaining over 30% overall global PV-paste share (with over 40% in its strongest products, per Q1 2026 commentary).
Products & Services
PV conductive pastes
| Product | Description / capability | Target customer | Generation / timing | Pricing |
|---|---|---|---|---|
| P-type PERC main-grid and fine-grid silver paste | Front-side silver paste for mono PERC cells; high-aspect-ratio fine-line printing | PERC cell makers (now a declining installed base) | Flagship of 2017–2022 | Silver price + processing fee |
| TOPCon front and rear main/fine-grid silver paste sets (including LECO-compatible) | Complete paste sets for N-type TOPCon, including laser-enhanced contact optimisation. About 80% of shipments were TOPCon by Q2 2024 | TOPCon cell majors (Tongwei, JA, Jinko-type integrated players) | Mass production from 2023; current core | Silver price + higher processing fee than PERC |
| HJT low-temperature silver paste | Ultra-low bulk-resistance low-temperature curing paste | Heterojunction cell makers | Ongoing; shipments rising | Silver price + fee |
| X-BC (back-contact) pastes | Pastes for back-contact cell architectures | BC cell makers (LONGi/Aiko-type routes) | Shipments rising since 2025 | Silver price + fee |
| Silver-nickel paste | Reduced-silver base-metal paste | Cost-focused cell makers | Launched 2025–2026 | — |
| Silver-coated-copper paste | Reduced-silver paste for HJT and others | HJT and TOPCon makers | Launched; in customer integration | — |
| "Seed layer + copper paste" solution | Copper metallisation with suppression of high-temperature copper oxidation; described as an industry first | TOPCon makers pursuing silver-free routes | Development / pilot | — |
| "Ultra-fine-line printing + low solid content + zero-busbar" solution | Paste–screen–print co-optimisation to cut silver laydown | All cell makers | 2025–2026 | — |
| Pastes for space and satellite PV | Products for extreme-environment, low-temperature-sintering applications | Commercial space PV integrators | Under development | — |
Upstream materials and other electronic materials
| Product | Description | Capacity / status |
|---|---|---|
| Electronic-grade silver powder | Spherical and flake powders, nano silver, copper and silver-coated copper powders | 1,000 t/yr at Jiangsu Delijv (completed 2025) |
| Glass frit | Functional frit for paste contact formation | 300 t/yr (completed 2025) |
| 0BB module encapsulation positioning adhesive | Adhesive for zero-busbar module stringing | In customer supply-chain validation |
| Semiconductor electronic paste | Pastes for chip and packaging applications; entered several leading chip customers' supply chains | Small volumes |
| 5G filter / MLCC pastes | Conductive pastes for passive components | Small volumes |
Semiconductor materials (Lumina Mask and Juxinguang)
| Product | Description / specification | Target customer | Status |
|---|---|---|---|
| DUV-ArF attenuated phase-shift blank mask (Att-PSM) | MoSi-based phase-shift film on synthetic quartz for 193 nm lithography. Covers 14–90 nm nodes; benchmarked against Japanese products | Captive mask shops at memory and logic fabs; merchant mask makers | In mass production in Korea; qualified at SK hynix, TMC, DiSiWei and Zhongwei Mask |
| DUV-ArF binary blank mask | Chromium-based light-shielding blank for ArF layers | Same | Mass production |
| DUV-KrF blank masks (binary and PSM) | 248 nm lithography blanks for mature-node layers | Fabs and mask shops in Korea, mainland China and Taiwan | Mass production |
| Electron-beam photoresist (Juxinguang) | Resist coated on blank masks for e-beam mask writing; synergistic with the blank-mask line | Mask makers and Chinese fabs | Core team in place and product defined; pilot line and sampling under way |
Lumina Mask's Korean capacity is about 10,000 pieces a year, with retrofits and a further 10,000 pieces planned. The Shanghai base is planned at 40,000 pieces a year in two 20,000-piece phases. Phase I equipment orders are signed and ramp-up is expected from the second half of 2027.
Financial Narrative
All figures are in CNY million unless stated, consolidated, PRC Accounting Standards for Business Enterprises. Sources: annual reports FY2021–FY2025 as summarised in sell-side research and exchange filings. FY2025 is audited by Rongcheng.
Income statement
The FY2022 gross-margin cell is shown as 0 for charting because no FY2022 gross margin was available; use 2023–2025 only.
Basic EPS for FY2025 was CNY 1.82, because shares held in the repurchase account are excluded from the denominator. The 2025 preliminary results (28 February 2026) showed net profit of CNY 409 million and revenue of CNY 14,599 million. The audited annual report gives CNY 419.68 million and CNY 14,593 million. The audited figures are used throughout.
Revenue CAGR. From FY2021 to FY2025 revenue grew at a compound 29.6% a year (5,084 to 14,593). Net profit grew at a compound 14.2% a year over the same period (247 to 420).
Commentary. The five years divide into three phases. In 2021–2023, volume drove growth. Fusion's share gains in PERC, then its early lead in TOPCon paste, took shipments from about 944 t to 2,003 t. Revenue roughly doubled again from 2021 to 2023 as installations boomed. Net margin peaked at 6.0% in 2022. That year processing fees for front-side silver were still high and Fusion was the first company to ship more than 1,000 t.
In 2023–2024, margins compressed. Revenue kept rising (+58% in 2023, +21% in 2024), but net profit stalled. Three causes stand out. First, PERC-era products went through a price war while TOPCon's higher processing fees were only partly offsetting. Second, sales and R&D headcount grew. Third, the 2024 PV cell-sector shakeout forced large bad-debt provisions, which drove a Q4 2024 net loss of CNY 2.2 million. Gross margin fell from 9.82% in 2023 to 8.70% in 2024.
In 2025–2026, silver drove the numbers. Silver's surge to record highs, near CNY 11,000/kg at end-September 2025 and above that in 2026, lifted revenue (+16.9% in 2025) while volume fell 7.7%. Net profit was flat at CNY 420 million. Q4 2025 was the strongest quarter (gross margin 8.61%, net margin 4.51%) because of overseas mix and first-in-first-out inventory gains. Q1 2026 set a record: CNY 290 million net profit and a 10.58% gross margin, helped by low-cost silver inventory, direct ingot purchasing and higher overseas share.
Q2 2026 then reversed. The company lost CNY 376 million at the parent-attributable level, and Q2 gross margin was about -0.2%. Causes were silver-related inventory write-downs (about CNY 130 million of asset impairment in H1), derivative and silver-lease fair-value losses, and the change in export tax rebates. Q3 2026 returned to a CNY 99 million net profit, but deducted net profit was only CNY 5 million and gross margin 0.8%.
2026 interim and quarterly results
For 9M 2026, deducted net profit fell 62.6% year on year and parent-attributable net profit fell 94.8%. Operating expenses were CNY 414 million (+20.2%), an expense ratio of 2.8%. Q3 operating expenses were CNY 160 million, up 53% year on year, mainly from financial and R&D costs as the semiconductor business was consolidated.
Balance sheet
End-2025 working-capital detail (CNY M): cash and equivalents 1,598.5; trading financial assets 1,064.0; notes receivable 2,362.7; accounts receivable 3,026.2 (gross 3,357.7 less a 331.5 bad-debt allowance); receivables financing 692.9; inventory 1,110.1. Management describes end-2025 cash on hand as about CNY 2.6 billion including liquid financial assets.
31 March 2026 (CNY M): cash 1,908.7; trading financial assets 307.2; notes receivable 1,991.3; accounts receivable 4,421.1; inventory 1,727.1.
30 September 2026: cash CNY 1,516 million; inventory CNY 1,476 million (+32.9% versus end-2025); liabilities/assets 64.07%; book value per share CNY 19.88 at 30 June 2026.
Goodwill and intangibles. The Lumina Mask acquisition was paid in cash at CNY 298 million, below the KRW 68 billion agreed price. The resulting goodwill and identified intangibles (technology, customer relationships) are recorded from Q2 2026. Their breakdown is not publicly disclosed, and the company has flagged goodwill-impairment risk.
Commentary. The balance sheet expanded by 50% in 2025 almost entirely through receivables and notes, which follow the silver price. Fusion chose to fund this growth with its own bank credit lines rather than supplier credit, because it judged that cheaper. Gearing therefore rose from 42% to 58% in a year and to 64% by Q3 2026. All debt is short-term; there were no long-term borrowings or bonds at end-2025. Equity is close to flat over four years because dividends and the 2024 share repurchase have absorbed most retained earnings. The 2024 dip in parent equity reflects buybacks and distributions.
Cash flow
The FY2024 operating cash flow is derived from the disclosed per-share figure × 242.03 million shares.
The 9M 2025 cell gives H1 2025 operating cash flow (−1,098); 9M 2025 capex is derived from the 9M 2026 figure and its −4.4% YoY change. The H1 2026 capex cell is shown as 0 because only the 9M total is disclosed.
Commentary. Operating cash flow turned deeply negative because of silver. Each tonne of paste carries roughly the value of a tonne of silver, and customers pay later than Fusion pays for silver. Rising silver prices, faster revenue growth and the export-tax-rebate change in 2026 (which raised taxes paid) widened the outflow. Q3 2026 operating cash flow was −CNY 1,069 million, a smaller outflow than in Q2. Capex is modest (CNY 180 million for 9M 2026) relative to the CNY 1.1 billion Shanghai blank-mask project. Most of that project's spending falls in Q4 2026 and 2027. Free cash flow was therefore strongly negative in 2025 and 9M 2026. Buybacks: the company holds shares in a repurchase account. The size of the programme and the amount spent in 2024–2025 are not publicly disclosed.
Ratios
ROIC, the current ratio, net debt/EBITDA and the cash conversion cycle require short-term borrowing and payables detail that is not publicly disclosed.
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Income Statement and Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Revenue (CNY Mn) | 5,084 | 6,504 | 10,290 | 12,488 | 14,593 |
Revenue growth (%) | 103.1 | 27.9 | 58.2 | 21.4 | 16.9 |
Net profit attributable to parent (CNY Mn) | 247 | 391 | 442 | 418 | 420 |
Net profit growth (%) | 98.6 | 58.5 | 13.0 | -5.4 | 0.4 |
Net margin (%) | 4.86 | 6.01 | 4.30 | 3.35 | 2.88 |
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View Subscription PlansIncome Statement and Margin Analysis (%) (FY2022–FY2025)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
Net profit excluding non-recurring items (CNY Mn) | 359 | 396 | 406 | 390 |
Gross margin (%) | 0 | 9.82 | 8.70 | 7.32 |
Income Statement and Margin Analysis (%) (FY2024–FY2025)
| Metric | FY2024 | FY2025 |
|---|---|---|
Total profit before tax (CNY Mn) | 481 | 478 |
Income tax (CNY Mn) | 71 | 66 |
Financial expense (CNY Mn) | 41 | 35 |
Depreciation & amortisation (CNY Mn) | 62 | 65 |
EBITDA, pre-tax profit + financial expense + D&A (CNY Mn) | 584 | 578 |
EBITDA margin (%) | 4.68 | 3.96 |
EPS, diluted on 242.03 M shares (CNY) | 1.73 | 1.73 |
Income Statement and Margin Analysis (%) (Quarterly)
| Metric | Q1 2026 | Q2 2026 | Q3 2026 | 9M 2026 |
|---|---|---|---|---|
Revenue (CNY Mn) | 5,615 | 4,987 | 4,233 | 14,835 |
Revenue YoY (%) | 87.5 | 44.9 | 0.7 | 39.4 |
Net profit attributable (CNY Mn) | 290 | -376 | 99 | 12 |
Deducted net profit (CNY Mn) | 250 | -153 | 5 | 101 |
Gross margin (%) | 10.58 | -0.2 | 0.8 | 4.2 |
Balance Sheet
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
Equity attributable to parent (CNY Mn) | 4,547 | 4,920 | 4,642 | 5,000 |
Balance Sheet and Margin Analysis (%)
| Metric | FY2024 | FY2025 |
|---|---|---|
Total assets (CNY Mn) | 7,976 | 11,978 |
Total liabilities (CNY Mn) | 3,334 | 6,978 |
Current liabilities (CNY Mn) | 3,297 | 6,936 |
Long-term borrowings and bonds (CNY Mn) | 0 | 0 |
Liabilities / assets (%) | 41.8 | 58.3 |
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View Subscription PlansCash Flow and Per-Share Data
| Metric | FY2024 | FY2025 |
|---|---|---|
Operating cash flow (CNY Mn) | -896 | -3,069 |
Operating cash flow per share (CNY) | -3.70 | -12.68 |
Cash Flow
| Metric | 9M 2025 | H1 2026 | 9M 2026 |
|---|---|---|---|
Operating cash flow (CNY Mn) | -1,098 | -3,582 | -4,651 |
Capex (CNY Mn) | 188 | 0 | 180 |
Margin Analysis (%) and Financial Ratios (x)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
ROE, attributable, diluted (%) | 8.99 | 9.00 | 8.38 |
Metric | FY2025 | — | — |
ROA, net profit / average total assets (%) | 4.20 | — | — |
Asset turnover, revenue / average total assets (x) | 1.46 | — | — |
Liabilities / equity (x) | 1.39 | — | — |
Interest coverage, EBIT / financial expense (x) | 14.5 | — | — |
Accounts receivable + notes / revenue (%) | 37.0 | — | — |
Inventory / revenue (%) | 7.6 | — | — |
Revenue by Region and Revenue by Region (%)
| Metric | FY2024 | FY2025 |
|---|---|---|
Overseas revenue, approx. (CNY Mn) | 873 | 2,000 |
Mainland China revenue, approx. (CNY Mn) | 11,615 | 12,593 |
Overseas share of revenue (%) | 7.0 | 13.7 |
Overseas revenue growth (%) | 0 | 129 |
Share Price & Returns
| Date | Close / quote (CNY) | Market cap (CNY Bn) | Context |
|---|---|---|---|
9 Dec 2022 | 110.00 (IPO price) | 17.1 (day-one intraday) | STAR listing, before later capitalisation of reserves |
13 Sep 2024 | 26.35 | — | Cycle low area (52-week range 24.80–78.19) |
10 Sep 2025 | 60.73 | — | SKE deal announcement |
4 Nov 2025 | about 55.4 | 13.4 | H-share plan |
5 Jan 2026 | 62.83 | — | First trading day of 2026 |
30 Apr 2026 | 102.97 | 24.92 | After Q1 results |
17 Aug 2026 | 95.68 | 23.16 | 20% limit-up |
31 Aug 2026 | 77.85 | 18.84 | After interim results |
6 Nov 2026 | 48.36 | 11.70 | Latest |
Margin Analysis (%)
| Metric | 1-year (to 6 Nov 2026) | Year to date 2026 |
|---|---|---|
Share price change (%) | -12.7 | -23.0 |
Valuation Multiples
| Multiple | Fusion | Basis |
|---|---|---|
P/E, trailing 12 months (x) | 60.6 | TTM net profit about CNY 193 million (FY2025 420 − 9M 2025 239 + 9M 2026 12) |
P/E, FY2026E consensus range (x) | 34–84 | Broker FY2026E net profit CNY 140–345 million (Soochow 140, Guojin 160, Guosen 345) |
P/E, FY2027E (x) | 13–23 | Broker FY2027E CNY 520–874 million |
P/B (x) | 2.43 | BVPS CNY 19.88 (30 Jun 2026) |
P/S, TTM (x) | 0.62 | TTM revenue about CNY 18,787 million |
Analyst Ratings & Targets
| Broker (date) | FY2026E NP (CNY Mn) | FY2027E NP (CNY Mn) | FY2028E NP (CNY Mn) | Rating |
|---|---|---|---|---|
Soochow (29 Oct 2026) | 140 | 520 | 710 | Buy |
Guojin (28 Oct 2026) | 160 | 540 | 680 | Buy |
Guosen (9 Oct 2026) | 345 | 874 | 1,287 | Outperform |
Per-Share Data and Returns & Leverage Ratios (%)
| Metric | FY2025 |
|---|---|
Cash dividend per share (CNY) | 0.432 |
Payout on attributable net profit (%) | 24.9 |
Analyst Conclusions
Management guidance. No numeric earnings guidance is given. Operating targets are: complete qualification at the leading domestic blank-mask customers in 2026; build Shanghai Phase I in 1H 2027 and ramp it in 2H 2027; reach more than 50% of China's blank-mask market long term; and maintain over 30% global PV-paste share while leading silver-reduction technologies.
Consensus expectations. Consensus assumes FY2026 is a trough year: net profit of CNY 140–345 million versus CNY 420 million in FY2025. It then expects recovery to CNY 520–874 million in FY2027 as silver-accounting effects fade, overseas mix improves and semiconductor revenue starts to contribute. Revenue is expected to stay at CNY 19–22 billion if silver prices hold.
Bull case
-
Blank masks re-rate the group. Domestic demand of CNY 7.6 billion by 2029 and a share target above 50% imply an addressable revenue pool many times Lumina Mask's current scale. Blank-mask gross margins (S&S Tech: 34.6%) are roughly five times PV paste margins.
-
PV earnings power is understated by silver accounting. Q1 2026 showed CNY 290 million in a single quarter when inventory and overseas mix worked. Deducted net profit was positive in 9M 2026 (CNY 101 million) despite the hedging losses.
-
The balance sheet can carry both businesses. There is no long-term debt, and at CNY 11.7 billion market cap the stock trades at 2.4x book and 0.6x sales.
Bear case
-
Silver-free metallisation and lower silver per cell erode the core franchise. Volumes already fell in 2025, and DK is ahead in high-copper paste production.
-
Cash burn and leverage are structural while silver stays high. Operating cash flow was −CNY 4.65 billion in nine months, gearing is 64%, and CNY 1.1 billion of Shanghai capex is still to come.
-
Semiconductor execution risk is long-dated. Qualification takes at least six months per customer, Shanghai output starts only in 2H 2027, and Japanese incumbents can respond on price and supply.
Key catalysts (next 12 months)
- Completion of blank-mask qualification at leading Chinese fabs and mask shops — Expected timing: Q4 2026 – 1H 2027
FY2026 preliminary results and annual report: Expected timing: Feb–Apr 2027
Shanghai Phase I equipment move-in and commissioning: Expected timing: 1H 2027
Refiling or abandonment of the H-share listing: Expected timing: Unscheduled
Deals through the Guoju Tonghui platform: Expected timing: Unscheduled
Silver-price direction and export-rebate policy: Expected timing: Ongoing
Commercial production of copper and silver-reduction pastes: Expected timing: 2027
- Juxinguang e-beam resist samples and first small-batch supply — Expected timing: 2027
Monitorables: quarterly paste shipments and overseas share; gross margin excluding inventory effects; operating cash flow and gearing; blank-mask revenue (disclosed qualitatively as rising quarter on quarter in Q3 2026); goodwill carrying value; further insider share sales.
Analyst verdict. Changzhou Fusion is two companies at different stages of their lives. The larger one is the world's leading PV paste supplier, with about 27–30% global share and a strong overseas franchise. It is also exposed to the structural squeeze facing every silver-paste maker: silver prices are high, cell makers are cutting silver per cell, and they are moving towards copper. That business still makes money in an average quarter. However, its earnings are now set as much by silver-inventory accounting and hedging as by processing fees. The swing from a CNY 290 million profit in Q1 2026 to a CNY 376 million loss in Q2 shows how volatile it has become. Silver-driven receivable growth also uses so much cash that gearing has risen to 64%.
The smaller company is Lumina Mask, a DUV blank-mask maker. Fusion bought it from SKC for less than CNY 300 million, a modest price for an asset that has passed volume-production qualification at SK hynix and at Taiwanese and Chinese mask shops. Its strategic value is clear: China depends almost entirely on Japanese suppliers for ArF blanks, and domestic demand is expected to grow at about 25% a year to CNY 7.6 billion by 2029. Its financial contribution, though, sits mostly beyond 2027. The Shanghai plant does not ramp until the second half of that year, and each Chinese customer qualifies for at least six months before switching.
At CNY 48 the shares are down more than 60% from their 2026 peak. They trade at about 2.4x book and 0.6x sales, while consensus 2026 earnings have been cut to a trough. The market has largely stopped paying for the semiconductor option. The investment case rests on three things: whether PV earnings stabilise above CNY 500 million once silver effects normalise, whether working capital can be financed without straining liquidity, and whether 2027 brings firm domestic blank-mask orders.
Overall view: a credible but slow-burning semiconductor transformation sits on top of a volatile, cash-hungry core. The risk-reward is now balanced to favourable for patient holders. Execution evidence in Shanghai, together with silver-price behaviour, will decide the outcome.
Sources: Changzhou Fusion FY2025 annual report and summary (30 Mar 2026); FY2025 preliminary results (28 Feb 2026); Q1, interim and Q3 2026 reports; announcements 2025-049, 2025-056/057, 2026-003, 2026-005, 2026-006, 2026-013, 2026-023, 2026-031, 2026-032, 2026-042; 2025 ESG report; 2025 AGM materials; IR activity record 2026-001; HKEX H-share application (14 Jan 2026); broker research from Guojin, Soochow, Guosen, Industrial Securities, Changjiang, CITIC Securities, Minsheng, Tianfeng, Southwest, Zheshang, Cinda, Huajin and Shanghai Securities (2022–2026); Yicai Global (10 Sep 2025); Cailian Press / STAR Market Daily (10 Sep 2025; 26 Jun 2026); 21st Century Business Herald (18 Aug 2026); Zhitong Finance (14 Jul 2026); Ruicaijing (Nov 2025; Mar 2026); Securities Times data (Nov 2026); Asia Business Daily, ANI and TheElec on SKC / SK enpulse (2023–2025); S&S Tech February 2026 IR deck; DK Electronic Materials FY2025 results (Huachuang); Market Publishers / GIR blank-mask report listings; Changzhou municipal government and PVTIME releases.
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View Subscription PlansExecutive Leadership
Executive Leadership Team
| Name | Title | Background | Age | Compensation (pre-tax) |
|---|---|---|---|---|
Liu Haidong (刘海东) | Founder, Chairman, executive director; actual controller | About 14 years at Samsung SDI (to senior manager); MSc Applied Chemistry, East China University of Science and Technology (2002) | Not publicly disclosed (16 years younger than Okamoto Kuninori) | FY2024 CNY 8.91 million; FY2023 CNY 15.01 million; about CNY 74.35 million cumulatively over five years |
Ao Yiwei (敖毅伟) | Director, General Manager (previously Director and Vice President) | Co-founding executive | — | FY2022 CNY 10.08 million |
Okamoto Kuninori (冈本珍范 / OKAMOTO KUNINORI) | Executive director, Vice President, Chief Technology Officer; core technical staff | About 13 years at Samsung | 65 | — |
Li Hao (李浩) | Director, Deputy General Manager (CFO at IPO) | Finance and operations | — | — |
Yao Jian (姚剑) | Director (manufacturing head at IPO) | Manufacturing | — | — |
Li Ning (李宁) | Employee director | — | — | — |
Ju Wenbin (鞠文斌) | Vice President | — | — | — |
Lin Chunnan (林椿楠) | CFO and Board Secretary | Finance and capital markets | — | — |
Wang Li (王莉) | Independent director | — | — | — |
“—” = not publicly disclosed.
Major Shareholders
| Holder | Stake (%) | Nature |
|---|---|---|
Liu Haidong | 11.20 | Direct |
Pengji LP (鹏季有限合伙) | 6.79 | Employee platform, GP Liu Haidong |
Pengyi LP (鹏翼有限合伙) | 1.14 | Employee platform, GP Liu Haidong |
Pengxi LP (鹏曦有限合伙) | 0.22 | Employee platform, GP Liu Haidong |
Pengqi LP (鹏骐有限合伙) | 0.22 | Employee platform, GP Liu Haidong |
Controlled by Liu Haidong | 19.57 | — |
Competitive Landscape
Key Competitors
| Competitor | Profile | Relative positioning versus Fusion |
|---|---|---|
DK Electronic Materials (帝科股份, 300842.SZ) | Main Chinese rival. FY2025 revenue CNY 18,046 million (+17.6%), net loss CNY 276 million (deducted net profit CNY 163 million); 2024 paste volume 2,037.69 t | Comparable volume; ahead in high-copper paste (GW-scale production); added a memory-chip business (Jiangsu Jingkai) |
Suzhou iSilver Materials (晶银新材, Goodark subsidiary) | Front-side silver paste supplier | Smaller scale |
Heraeus Photovoltaics | German incumbent | Lost share to Chinese suppliers |
Samsung SDI (legacy paste) | Former "big four" supplier | Exited and lost share; origin of Fusion's founders |
Other Chinese specialists (HJT low-temperature paste makers) | HJT niche suppliers | Narrower route coverage |
HOYA Corporation (Japan) | Global leader; dominant in EUV and DUV blanks | Scale and technology leader |
Shin-Etsu Chemical (Japan) | Integrated synthetic-quartz substrates; OMOG and ArF/KrF Att-PSM; invested USD 125 million to raise capacity 30% | Vertical integration in quartz |
AGC Inc. (Japan) | Blanks including EUV | Leading |
S&S Tech (Korea, KOSDAQ 101490) | 2025 revenue KRW 243.7 billion (+38.5%), operating profit KRW 50.4 billion; 335 employees; Yongin EUV centre | Most direct Korean peer; larger and ahead in EUV |
ULVAC Coating (ULCOAT, Japan) | Display and semiconductor blanks | Mature-node and display focus |
Telic (US) | Blanks and coated substrates | Niche |
ShenZhen Longtu Photomask (China) | Photomask maker; blanks were 53–64% of its purchases in 2021–2023 | Potential customer rather than competitor |
Anhui Hechen New Material (China) | Display and semiconductor polishing pads and photomask blanks; VC-funded | Emerging Chinese rival |
Peer Comparison FY2025
| Company | FY2025 revenue (M, local) | FY2025 revenue growth (%) | Profitability metric FY2025 (%) |
|---|---|---|---|
Changzhou Fusion (CNY) | 14,593 | 16.9 | 2.88 (net margin) |
DK Electronic Materials (CNY) | 18,046 | 17.6 | -1.53 (net margin) |
S&S Tech (KRW) | 243,733 | 38.5 | 20.7 (operating margin) |
