The landscape of China's semiconductor equipment sector is undergoing a significant transformation, driven by the push for domestic substitution and the explosive demand for AI computing power. Since 2026, domestic semiconductor companies have entered a period of rapid development, with Zhongke Feice standing out as a prominent example.
As of the market close on July 7, 2026, Zhongke Feice shares were priced at 356.6 yuan, giving the company a total market capitalization of 124.9 billion yuan. Earlier, on July 1, the stock price had surged to a peak of 458 yuan, briefly pushing its market value above 160 billion yuan. From the start of 2026 to July 7, the company's stock had accumulated gains exceeding 130%.
Zhongke Feice is a high-end semiconductor quality control equipment company incubated by the Institute of Microelectronics of the Chinese Academy of Sciences. The company is controlled by the husband-and-wife team of Chen Lu and Ha Chengshu.
Chen Lu, a former prodigy from the University of Science and Technology of China's Special Class for the Gifted Young, earned his Ph.D. in the United States and worked for a well-known semiconductor equipment manufacturer. After returning to China, he initially focused on scientific research before pivoting to entrepreneurship. After 12 years of dedicated effort, he has built a leading technology firm.
Amidst strong secondary market interest in hard technology supply chains, Zhongke Feice has joined the ranks of companies on the STAR Market with market capitalizations exceeding 100 billion yuan. It is noteworthy that the company's current valuation exceeds the industry average, yet appears misaligned with its fundamental financial performance, as it has reported consecutive losses in its core, non-GAAP net profit. The company has acknowledged its limited ability to withstand market fluctuations.
Furthermore, there is a gap between Zhongke Feice's market share and that of its international competitors. The company is actively working to enhance its competitiveness and close this gap through measures such as private placements.
The 12-Year Forge: Creating a Tech Titan
Zhongke Feice embarked on a new chapter when it listed on the STAR Market on May 19, 2023. A little over three years later, it has grown into a semiconductor equipment leader with a market cap surpassing 100 billion yuan. The journey from a fledgling startup to a semiconductor giant is a story of a returning scientist breaking through foreign monopolies.
Current Chairman Chen Lu graduated from the Special Class for the Gifted Young at the University of Science and Technology of China. He then pursued a Ph.D. in Physics at Brown University in the United States. During his time abroad, he met his wife, Ha Chengshu, also a top student who earned a Juris Doctor from Washington University in St. Louis.
While in the U.S., Chen Lu held positions as a systems scientist at Rudolph Technologies (now Onto Innovation) and later as a senior scientist at KLA Corporation.
In 2010, Chen Lu chose to return to China, forgoing a comfortable life abroad to serve as a researcher and doctoral supervisor at the Institute of Microelectronics of the Chinese Academy of Sciences. Beyond research, he shifted his focus towards founding a company.
Leveraging the resources of the institute, Chen Lu assembled a research and development team. In 2014, he led the team from Beijing to Shenzhen to enter a market segment dominated by foreign companies—the semiconductor inspection and metrology equipment market, which is considered critical for the entire mass production process of chips.
On December 31, 2014, Chen Lu and his team formally established Zhongke Feice in Shenzhen. The choice to base the company in Shenzhen was strategic, as most domestic integrated circuit equipment manufacturers at the time were clustered in the Yangtze River Delta region.
The growth path was not without challenges. In its early days, the company faced skepticism from the industry regarding the development of domestic inspection and metrology equipment, as well as limited attention from the capital markets for this field.
However, through the determined efforts of its founding team, Zhongke Feice soon began to make progress.
In 2016, the company's first patternless wafer defect inspection equipment entered the production lines of a leading domestic customer for verification. By 2017, its products had been adopted by China's largest advanced packaging factory. In 2019, its full range of equipment entered the domestic front-end integrated circuit and advanced packaging markets. The year 2020 saw it become a supplier of integrated circuit quality control equipment to a leading domestic chip manufacturer, achieving batch shipments. By 2021, it had grown into a leading enterprise for integrated circuit quality control equipment in China.
In 2023, Zhongke Feice successfully listed on the STAR Market. The following year, the company's shipments of semiconductor metrology equipment reached 1,000 units.
Fast forward to 2026, less than four years after its IPO, the company's total market capitalization has broken through the 100-billion-yuan mark.
Behind a 20,000x P/E Ratio: Core Losses and Weak Internal "Vitality"
The semiconductor equipment sector has experienced rising prosperity in 2026. From a secondary market perspective, 14 stocks within the sector have more than doubled in value since the start of the year, including Zhongke Feice.
Zhongke Feice's stock price has risen by 133.1% year-to-date in 2026. As of the July 7 close, its static price-to-earnings ratio and trailing P/E ratio exceeded 2,000x and 20,000x, respectively. During the same period, the average P/E ratio for the semiconductor equipment industry was below 200x. It is evident that some of the company's valuation metrics are significantly higher than the industry average.
Typically, high-valuation stocks require strong earnings data for support. However, in the short term, Zhongke Feice's valuation does not align with its fundamental business performance.
Looking at its financial results, since its 2023 listing, the company's revenue has shown an overall growth trend, increasing from 890.9 million yuan in 2023 to 2.053 billion yuan in 2025. However, profitability has been volatile. From 2023 to 2025, net profit was 140 million yuan, -11.5251 million yuan, and 58.6526 million yuan, respectively, showing an overall decline. More critically, its core, non-GAAP net profit was 31.69 million yuan, -124.1 million yuan, and -122.6 million yuan for those years, recording losses in both 2024 and 2025.
In the first quarter of 2026, the company reported revenue growth without corresponding profit growth. Revenue increased by 34.63% year-over-year to 396 million yuan, but net profit showed a loss of over 60 million yuan, with a non-GAAP net loss of 116.2 million yuan. Zhongke Feice attributed the first-quarter loss to factors including year-over-year increases in research and development and sales-related expenses.
From an overall financial perspective, while the company's revenue is growing and its scale appears to be expanding, its core operating business, as reflected by the loss in non-GAAP net profit attributable to shareholders, remains in a 'loss-making expansion phase.'
In Q1 2026, the company's R&D expenditure as a percentage of revenue soared to 46.26%. While this upfront investment points to future potential, it also implies significant cost pressures that will need to be amortized over time.
Zhongke Feice has frankly stated that the company is still in a continuous development phase and has a relatively limited ability to withstand industry fluctuations.
Another point of focus is the company's cash flow. From 2023 to 2025, the net cash flow from operating activities for Zhongke Feice was consistently negative, with the outflow expanding. In 2025, the net operating cash outflow reached 862 million yuan, and in Q1 2026, the net outflow exceeded 20 million yuan.
Correspondingly, the company's inventory in Q1 2026 stood at a high 3.002 billion yuan, an increase of over 1 billion yuan year-over-year. This surge in inventory has tied up a substantial amount of the company's cash flow, indicating insufficient internal "self-sustaining" capability.
Faced with ongoing R&D investment and cash outflows, Zhongke Feice has turned to private placements for financing. To enhance its capability for the industrialization of high-end advanced process equipment, boost technological innovation, and improve infrastructure, the company completed a 2.5-billion-yuan private placement in October 2025. The proceeds are allocated to projects including the R&D, testing, and industrialization of high-end semiconductor quality control equipment in Shanghai, the upgrade and construction of its headquarters base and R&D center, and supplementing working capital, with 700 million yuan designated for the latter.
In summary, against the backdrop of exploding AI computing demand, the semiconductor industry is enjoying a period of high prosperity. Within the grand narrative of achieving domestic self-sufficiency in semiconductor equipment, Zhongke Feice is undergoing a market-driven revaluation. The company's technological positioning in semiconductor inspection and metrology affords it a significant competitive moat within the industry chain, which is reflected in its soaring market valuation.
However, a closer look at the micro-level reveals areas of caution in the company's financial data and fundamental performance. The high valuation bestowed by the secondary market reflects optimism about Zhongke Feice's future prospects. Yet, the sustainability of this valuation will ultimately depend on consistently improving financial results and the successful delivery of industrial-scale achievements. The company's future operational performance will continue to be a key focus.
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