New Stock Prospects| A tipping point in profitability has arrived, is it time for Suzhou UIGreen Micro&Nano Technologies (688661.SH) to be revalued?

Recently, Suzhou UIGreen Micro&Nano Technologies Technology Co., Ltd. (referred to as Suzhou UIGreen Micro&Nano Technologies, 688661.SH) once again submitted an application for listing on the main board of the Hong Kong Stock Exchange, with GUOTAI JUNAN I and China Securities Co., Ltd. International serving as joint sponsors. This is the company's second attempt after its initial application failed on September 26, 2025. In recent times, Suzhou UIGreen Micro&Nano Technologies has performed extremely well in the capital market: since December 2025, the stock price has risen from around 40 yuan, breaking through the 100 yuan mark and closing at 109.5 yuan on April 24, 2026, with a cumulative increase of over 200%. Against the backdrop of the soaring A-share stock price and the successful turnaround in the 2025 annual report, Suzhou UIGreen Micro&Nano Technologies' journey to the Hong Kong stock market has attracted market attention. However, behind the impressive performance, concerns such as a significant decline in the traditional main business gross profit margin, high customer concentration, risks associated with absorbing new production capacity, among others, have cast a shadow over the company's prospects. Turnaround in annual reports, differentiated performance in two main business segments Public information shows that Suzhou UIGreen Micro&Nano Technologies is one of the world's leading suppliers of micro and nano manufacturing solutions, providing a comprehensive product portfolio mainly covering Micro-Electro-Mechanical Systems (MEMS) micro and nano manufacturing components, semiconductor test probes, and miniature transmission systems, widely used in consumer electronics, semiconductors, medical devices, smart Siasun Robot & Automation, and other fields. The company's business model is centered around customer customization, deeply engaging in joint research and development with customers in the supply chain, and providing one-stop solutions from design to mass production. Benefiting from the accelerated domestic substitution of semiconductors and the explosion in demand for AI chips, Suzhou UIGreen Micro&Nano Technologies showed remarkable revenue performance in 2025. Data shows that from 2023 to 2025, the company's revenue surged from 286 million yuan to 864 million yuan, with a high annual compound growth rate of 74.0%. However, the profit recovery was clearly lagging behind: in 2023 and 2024, the company reported losses of 20.907 million yuan and 8.639 million yuan, respectively, and it was not until 2025 that it achieved an annual profit of 29.795 million yuan, successfully turning losses into profits. The company stated that the 2025 profits were mainly driven by cost optimization brought about by economies of scale and the increased proportion of high-margin semiconductor test probe revenue. However, looking at the overall gross profit margin, it was 20.9%, 15.8%, and 18.3% in 2023, 2024, and 2025, respectively, still not recovering to the 2023 level, and the improvement in profit quality is not yet stable. The company's main products include MEMS micro and nano manufacturing components, semiconductor test probes, and miniature transmission systems. Looking at the revenue structure, the two main business segments are showing a clear differentiation trend: From 2023 to 2025, the semiconductor test probe business saw a sharp increase from 57.818 million yuan in 2023 to 258 million yuan in 2025, with the revenue proportion jumping from 20.3% to 29.9%, with a high gross profit margin of 43.5%, an increase of 22.7 percentage points; On the other hand, the company's traditional main business, MEMS micro and nano manufacturing components, saw its revenue proportion decrease from 70.1% in 2023 to 40.6% in 2025, with the gross profit margin dropping significantly from 24.6% to 7.1%, mainly due to continued soft demand in downstream consumer electronics, intensifying industry competition, and a decline in product pricing power. In addition, although the miniature transmission system business continues to grow, it currently has a small volume, with limited impact on overall performance. It is understood that semiconductor test probes are critical consumables for chip design verification, wafer testing, and post-packaging testing. With the evolution of semiconductor processes to 3nm and below, as well as the widespread adoption of advanced technologies such as chiplets and 3D packaging, test probes are developing towards higher frequencies and higher accuracy. Suzhou UIGreen Micro&Nano Technologies is one of the few leading Chinese companies that export semiconductor final test probes to overseas markets and the first Chinese company to achieve large-scale production of coaxial probes. In the global final semiconductor test (FT) probe market, Suzhou UIGreen Micro&Nano Technologies ranks first among Chinese companies and fourth among all suppliers, with a market share of 6.6%. Although the performance is showing signs of improvement, Suzhou UIGreen Micro&Nano Technologies still faces challenges such as high customer concentration and underutilization of production capacity. From 2023 to 2025, the revenue contributions of the top five customers accounted for 46.9%, 54.6%, and 52.8% of total revenue, with the largest customer contributing revenue shares of 13.2%, 25.4%, and 18.0%, respectively. In February 2026, Suzhou UIGreen Micro&Nano Technologies initiated the Micro Precision Manufacturing Industry Headquarters project in the Suzhou New District Hi-Tech Industrial Zone, planning to add annual production capacity of 240 million mobile optical lens components and 36 million semiconductor packaging test probes, among others. However, it is worth noting that the prospectus shows that the production capacity utilization rates of the company's three main businesses in 2025 were not saturated: MEMS components at 67.3%, semiconductor test probes at 56.5%, and miniature transmission systems at only 42.6%. With about four to five-tenths of the existing capacity idle, the expansion of new capacity on a large scale, if future orders grow less than expected in the next 12 months, the depreciation pressure brought by the new fixed assets will directly erode the company's profits, becoming a "double-edged sword" for performance. Mixed demand downstream, semiconductor recovery trend evident Looking at Suzhou UIGreen Micro&Nano Technologies' two main businesses, the industry's "uneven warmth" situation is apparent. In the semiconductor industry, with the increasing penetration of global new energy vehicles, mass production of human-shaped Siasun Robot & Automation, low altitude economy, and the explosion of AI demand, multiple factors are driving the industry's continued high prosperity. Data from Donghai Securities shows that in February 2026, global semiconductor sales surged by 61.74% year-on-year, with a cumulative year-on-year growth of 53.79% in January-February, indicating a strong recovery trend. Specifically in the test probe market, the global semiconductor test probe market has shown a cyclical growth pattern in recent years, with a compound annual growth rate of 3.0% from 2021 to 2025. In 2025, the global semiconductor test probe market revenue reached 121 billion yuan. Looking ahead, the market is expected to maintain strong growth momentum, with a forecasted compound annual growth rate of 6.6% from 2026 to 2030. Driven by the acceleration of domestic substitution, the Chinese FT probe market has shown even more impressive performance, with a forecasted compound annual growth rate of 11.0% from 2026 to 2030, and the market size expected to increase to 13.84 billion yuan by 2030. As a leading local probe company, Suzhou UIGreen Micro&Nano Technologies is undoubtedly a core beneficiary of this trend. In terms of funding, public funds still have a strong inclination towards the semiconductor sector. In the fourth quarter of 2025, the electronics industry ranked first in the market value of public fund holdings (6735.74 billion yuan), with semiconductors accounting for as high as 65.18%, totaling 4735.74 billion yuan, and representing 13.18% of the total market value of public fund holdings. This reflects institutional investors' positive expectations for the long-term development space of the domestic semiconductor industry. In contrast to the heat in the semiconductor industry, the downstream consumer electronics industry still shows signs of weakness in market demand. Data from IDC's Global Quarterly Smartphone Tracking Report shows that in 2025, the shipment volume of smartphones in China was about 285 million units, representing a year-on-year decrease of 0.6%. In February 2026, the shipment volume of smartphones in mainland China saw a 14.61% year-on-year decline, with a cumulative year-on-year decline of 15.46% in January and February 2026. Looking at the long term, the annual demand for smartphones in China has decreased from 560 million units in 2016 to 307 million units in 2025, with a lengthening replacement cycle and weak economic expectations suppressing consumers' willingness to upgrade. Affected by this, although Suzhou UIGreen Micro&Nano Technologies ranks second in the global MEMS acoustic module micro-nano manufacturing component market (market share of 12.4%), its traditional main business still cannot escape the dilemma of a significant decline in gross profit margin. However, some industry views point out that structural opportunities still exist in the consumer electronics industry. On one hand, Apple's pricing strategy has shown a trend towards affordability, with plans to launch new products such as iPhone 17E, foldable screen iPhones, and AI glasses in 2026, which are expected to boost market demand; on the other hand, features such as Dou Bao AI smartphones, quark AI glasses, Apple Apple Intelligence, and other end-side AI hardware functions gradually landing, may bring new growth points for MEMS components. It can be seen that Suzhou UIGreen Micro&Nano Technologies is currently at a critical juncture of "transitioning from old to new momentum": the semiconductor test probe business, driven by domestic substitution and the AI wave, has replaced traditional MEMS components as the company's core growth engine and successfully contributed to the profit turnaround in 2025. However, challenges such as a significant decline in the gross profit margin of the traditional main business, high customer concentration, and the pressure of absorbing new production capacity objectively exist, adding a level of uncertainty to future profitability. Overall, with its scarce leading position in the global semiconductor test probe field, Suzhou UIGreen Micro&Nano Technologies has positioned itself in a highly prosperous track. In the background of continuous release of domestic semiconductor substitution and AI demand, the company's growth potential is worth the market's active attention.