AMEC escaped the Pentagon blacklist by suing; Rmb1.98 billion of its quadrupled profit was investment gains
Goldman lifted its target to Rmb582 and Nomura resumed at Buy with Rmb480, both against the October 8 close of Rmb313 on a stock already up 71%. Nearly Rmb2 billion of the quadrupled first-half profit was investment gains, not tool sales.
Vincent Jiang · 3 min read
Two banks stamped upside on a 71% runner
Goldman Sachs+0.21% — Goldman Sachs, up 0.21 percent today raised its AMEC target−0.72% — AMEC target, down 0.72 percent today to Rmb582 from Rmb577 on October 5; two days later Nomura resumed coverage at Buy with Rmb480 12. Both are chasing a Shanghai etch-tool maker already up 71% this year 3. The backstory is stranger than the upgrades: AMEC sued the Pentagon in August 2024 to escape its Chinese-military-companies list, and won removal that December 45.
The numbers behind the chase are preliminary, per the August 4 filing: first-half net profit of Rmb2.7 billion to Rmb2.9 billion, up 282% to 311%, on revenue up 35% at Rmb6.7 billion 65. A 21-analyst consensus sits at Rmb462.03 against the October 8 close of Rmb313.24 3.
All four published targets sit 47% to 86% above the October 8 close
- Estimate
Data
| Value | |
|---|---|
| Goldman Sachs (estimate) | Rmb582 |
| Jefferies (estimate) | Rmb490 |
| Nomura (estimate) | Rmb480 |
| 21-analyst consensus (estimate) | Rmb462.03 |
The quadruple is partly accounting
Strip the headline before trusting it. Investment and fair-value gains, including sold Piotech shares, reached Rmb1.98 billion against Rmb168mn a year earlier 65. The core tool business grew a still-explosive 86% to 122%, to Rmb1.0 billion to Rmb1.2 billion 5.
Paper gains were bigger than AMEC's entire core first-half profit
- Estimate
Data
| Value | Range | |
|---|---|---|
| Headline net profit (estimate) | Rmb2.8bn | Rmb2.7–2.9bn |
| Investment and fair-value gains (estimate) | Rmb1.98bn | — |
| Core adjusted profit (estimate) | Rmb1.1bn | Rmb1.0–1.2bn |
Export curbs became the sales pitch
Goldman sees China wafer-fab-equipment spending rising 13%, 20% and 15% through 2028 to US$61 billion 1; Bernstein puts 2028 at US$77 billion on ChangXin and Yangtze Memory buildouts 6. Chinese chipmakers' first-half earnings grew more than 600% on AI demand and the self-sufficiency campaign 8.
AMEC attacked that pool on September 2 with six tools at once, from extreme high-aspect-ratio etch to molybdenum ALD and silicon-carbide epitaxy 17. Nomura's Buy rests on etch share gains 2, and those points come out of someone's China book: Lam Research−0.05% — Lam Research, down 0.05 percent today and Applied Materials−0.06% — Applied Materials, down 0.06 percent today are AMEC's primary Western competitors, and their access is increasingly restricted 5.
Beijing now requires at least 50% domestic equipment on new fab capacity 9. Applied Materials still drew US$4.18 billion, 28% of first-half revenue, from China, while trackers put domestic tools at 40% to 50% of CXMT's lines, above 60% in etch 9. Samsung and SK Hynix are evaluating AMEC gear for their China fabs; no orders are confirmed 10. The fence Washington built to keep AMEC out now keeps its customers in.
The bill sits in the fine print
Goldman, bullish target and all, trimmed its 2026 net income forecast about 3% to Rmb5.09 billion on new-product ramp costs 1. A shareholder sold a Rmb6.23 billion stake into the rally in early September 7. TSMC−0.54% — TSMC, down 0.54 percent today decided in 2025 to phase Chinese-made tools out of its 2nm fabs over pending US legislation, and founder Gerald Yin concedes on state television that customers still default to foreign equipment "out of habit" 5.
October 31 separates the two profits
Third-quarter results land on October 31, the first read on shipments since the six tools launched 7. The list fight continues without AMEC: CXMT sued the Pentagon on August 28 11, and a judge blocked the WuXi AppTec designation in August, calling the list a "scarlet letter" 12. Paper gains fade; order books do not, and Q3 will show which is carrying the stock.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
