Shenzhen Qingyi Photomask Ltd.

Qingyi Photomask is the oldest and largest independent photomask maker in mainland China. It produces quartz and soda-lime master patterns that panel makers and chipmakers use to transfer circuit images onto glass and silicon. About four-fifths of revenue comes from flat-panel-display masks for TFT-LCD, AMOLED and LTPS lines, where Omdia ranked it fourth worldwide and first in China by 2024 sales. The rest comes mainly from semiconductor masks for power devices, foundry and advanced packaging. Here it is in volume production at 180nm, in small batches at 150nm, and in qualification at 55nm. It has plants in Shenzhen and Hefei and a RMB 3.5 billion Foshan campus that started up in late 2025. Its investment case rests on substituting imports in high-precision AMOLED, HTM and PSM masks, and on climbing the semiconductor node ladder toward 28nm. Japanese, US and Korean incumbents still dominate both markets.

What the company does. A photomask, also called a mask or reticle (掩膜版/光罩), is a high-precision plate that carries a circuit or pixel pattern. Downstream lithography tools project the pattern repeatedly onto wafers or display glass. Qingyi designs (data processing), writes (laser or electron-beam lithography), develops, etches, inspects, repairs and pellicles these masks to customer specifications. Each mask is custom, so the company works on a made-to-order basis ("以销定产"). Production is fully in-house with no outsourced processing, and the company sells directly to manufacturers. Market development combines its own sales force with agents.

Company's own description (FY2025 annual report). The company describes itself as engaged in the R&D, design, production and sale of photomasks. It calls itself one of the earliest-established and largest photomask manufacturers in China. Its products are high-precision tools that serve as the pattern "negative" in downstream manufacturing. They are classified by substrate into quartz masks and soda-lime masks. They are applied in flat-panel displays, semiconductor chips, touch panels and circuit boards. End devices include televisions, smartphones, notebooks, tablets, wearables, automotive electronics, AI hardware, network communications, home appliances, LED lighting and industrial electronics.

Revenue model. Revenue is almost entirely product sales of custom masks; there is no subscription or licensing income of note. Pricing is per mask set or per plate. Price rises steeply with substrate size (panel generation), critical-dimension (CD) tolerance, registration accuracy, layer complexity and technology type: binary, half-tone (HTM) or phase-shift (PSM). Because every new display model or chip design needs a new mask set, demand follows design starts and model refreshes as much as end-unit volumes. This gives the business partly recurring, consumable-like characteristics.

Value-chain position. The company sits between material and equipment suppliers and fab operators. Upstream, it buys quartz and soda-lime substrates and resist-coated mask blanks, mostly from Japan, invoiced in yen. It buys laser writers, e-beam writers and inspection tools, mostly imported and invoiced in US dollars. Downstream, it sells to panel makers, chip foundries, IDMs, bumping and advanced-packaging houses, touch-panel makers and PCB makers. It has begun moving upstream: Hefei Qingyi's mask-blank coating line is ramping and reduces purchased-blank costs.

Customer types and named customers (FY2024–FY2025 annual reports):

Flat-panel display: Named customers: BOE, Visionox, HKC, Tianma, CSOT (TCL Huaxing), Truly, InfoVision, Innolux, HJC (Huajiacai)

Semiconductor chips: Named customers: United Nova Technology (芯联集成), CRRC Times Electric, BYD Semiconductor, Sanan Optoelectronics, JCET, Tongfu Microelectronics, Amkor, Silan Microelectronics, Global Power Technology (泰科天润), GTA Semiconductor (积塔), Jiejie Microelectronics, StarPower, Sai MicroElectronics

Touch: Named customers: BOE, Tianma

Circuit boards: Named customers: Career Technology (紫翔电子), Avary Holding (鹏鼎控股)

Independent characterisation. Qingyi is a capital-intensive, mid-scale specialist. It is still predominantly a display-mask company: flat-panel masks were 79.5% of FY2025 main-business revenue. Its rising mix of AMOLED/LTPS masks (RMB 516 million in FY2025, up 42.75%) has driven gross-margin expansion. The semiconductor business is strategically important but small: RMB 204 million in FY2025, about 17% of revenue. Its customers are mostly 6-inch and 8-inch lines making power devices, MEMS, compound semiconductors and bumping layers, rather than leading-edge 12-inch logic. Its competitive edge comes from three things: scale and long relationships with BOE and other Chinese panel majors, plants located near panel clusters in Hefei and the Pearl River Delta, and policy tailwinds for domestic substitution. Its weaknesses are reliance on imported writers and blanks, customer concentration, and a technology gap of several node generations to Toppan, DNP, Photronics and Hoya in semiconductor masks.

All figures are in RMB under PRC Accounting Standards and come from audited annual reports (FY2022–FY2025) and unaudited interim reports for 2026. Fiscal year is the calendar year.

Income statement

FY2022 revenue growth is measured against the FY2021 base. FY2021 attributable net profit was about RMB 44.5 million, implied by the RMB 16.0 million dividend being 35.95% of profit. FY2020 revenue was about RMB 487 million.

The 2022–2025 revenue CAGR was 17.6%. Attributable net profit compounded at 23.8% over the same period.

EBITDA. The company does not report EBITDA. Using depreciation and amortisation from its statements, sell-side models put FY2025 EBITDA at about RMB 389 million (31.4% margin). Trailing EBITDA margin to mid-2026 is about 30.6%. Operating margin on a trailing basis was about 18.3% and gross margin about 31.6%.

Commentary. The FY2022–FY2024 period was a strong upswing. Display-panel capacity in China kept migrating toward AMOLED/LTPS, and Hefei capacity ramped. The semiconductor subsidiaries added capacity: cleaning tools and AOI in H1 2023 and a new writer in Q3 2023. Profit growth outpaced revenue every year from 2022 to 2024, with three consecutive years above 25%. FY2025 shows clear deceleration: revenue +11.5%, profit +8.9%. Three drags on the bottom line explain most of it. First, Shenzhen hit capacity limits. Second, Foshan pre-operating costs, interest and depreciation began to flow through, with the overhead build-up already visible from Q3 2024. Third, yen and dollar swings created foreign-exchange losses. The fall in ROE from 12.07% to 8.03% is mostly arithmetic from the April 2025 equity raise, which nearly doubled shareholders' equity.

Quarterly profile

2026 year to date.

• H1 2026: revenue RMB 653.61 million (+5.08%); attributable net profit RMB 117.95 million (+28.16%); recurring net profit RMB 108.12 million (+30.43%); gross margin 32.64%; operating cash flow RMB 266.53 million (+75.79%). Profit growth benefited from a large swing to FX gains in financial expenses and from margin improvement.

• 9M 2026: revenue about RMB 974 million (+4.90%); attributable net profit about RMB 160 million (+11.02%); recurring net profit about RMB 145 million (+11.55%); basic EPS RMB 0.51.

• Q3 2026 on its own (9M less H1) shows revenue up about 5% but attributable profit down about 19% year on year. The quarter compares against an unusually strong Q3 2025 (+63.87%) and absorbs Foshan ramp costs.

Balance sheet

At 30 June 2026, total assets were RMB 4,286.43 million (+9.10% year to date) and parent equity RMB 2,868.38 million, or RMB 9.11 per share. Interest-bearing debt was about RMB 871 million and cash about RMB 621 million, giving net debt of about RMB 250 million.

At 31 March 2025, before the placement proceeds were fully deployed, fixed assets were RMB 974.2 million, construction in progress RMB 341.1 million, intangible assets (largely Foshan land use rights) RMB 80.0 million, inventories RMB 190.6 million and other equity investments RMB 13.0 million. The company has made no acquisitions, so the balance sheet carries no material goodwill. Intangibles are dominated by land use rights.

Interest-bearing liabilities were about 20% of total assets in mid-2026. The parent had RMB 412.9 million of distributable retained profit at end-2025. The 2026 bank-facility envelope is RMB 1.9 billion across the parent and five subsidiaries. A further RMB 1.5 billion of subsidiary guarantees was authorised. Approved guarantees, used plus unused, totalled RMB 1,243.6 million in April 2025, equal to 83.8% of then net assets.

Working capital (operating, as tracked by data vendors) was about RMB 291 million in FY2023, RMB 273 million in FY2024 and RMB 220 million in FY2025. It has fallen even as revenue grew, which reflects improving collection and supplier terms. Receivables still need watching. Q1 2026 receivables rose 22% from year-end, and trailing receivables were about 1.7 times net profit.

Cash flow

Operating cash generation has been excellent, and cash conversion improved every year. Free cash flow, however, turned sharply negative from 2024 because of capital spending on Foshan. The RMB 3.5 billion project began construction in March 2024, and roughly RMB 1.19 billion of the 2025 placement was allotted to it. The company funded the gap with bank borrowings in 2024 and then with placement equity in 2025. The 2024 share buyback was RMB 30.0 million, and none was carried out in 2025. Since listing, cumulative cash dividends reached about RMB 245 million by mid-2026, of which RMB 152 million came in the last three years.

Ratios

Return on invested capital. By data-vendor calculation, ROIC was about 7% in FY2025. The post-IPO median is 9.0%, and the low was 3.9% in FY2021.

Leverage. Net debt to EBITDA was under 1x at mid-2026 (about 0.6x on trailing EBITDA). Financial expenses fell 80% year on year in Q1 2026 to RMB 2.38 million as interest expense halved to RMB 4.09 million. Interest cover is therefore comfortably above 20x.

Asset turnover. Turnover has dropped to about 0.3x as Foshan assets sit on the balance sheet ahead of full revenue. This is the single biggest swing factor for future ROE.

7. Segmental and Geographic Revenue Mapping

The company's sales are concentrated on panel and chip clusters in mainland China. Its disclosure is organised by application industry and substrate, and the plant footprint offers the clearest geographic map of where value is created. Country-level revenue by customer location is not publicly disclosed. Overseas customers such as Innolux in Taiwan and Amkor account for a small share of sales.

Fastest-growing and declining areas. AMOLED/LTPS masks are the fastest-growing line: +42.75% in FY2025, served mainly from Hefei. Demand comes from BOE, Visionox and Tianma OLED lines and the new G8.6 IT-OLED fabs. Semiconductor masks have slowed from +34% in FY2024 to under +6% in FY2025 and about +1% in H1 2026. The Shenzhen Micro plant is capacity-bound, and Foshan semiconductor capacity has yet to be qualified. Soda-lime masks (PCB and touch) and the Shenzhen parent site are in structural decline.

There were no layoffs, litigation or regulatory sanctions in the period.