A 340 billion yuan market leader sees net profit decline after 10 years! Why did NAURA's four major expenses surge? Company responds

Source: Era Weekly Report, Authors: Song Yiting, Han Xun

After a decade, the semiconductor equipment giant NAURA (002371.SZ) has once again experienced a situation of 'increased revenue but decreased profits'.

On the evening of April 17, NAURA announced that its revenue for 2025 reached 39.353 billion yuan, a year-on-year increase of 30.85%; net profit attributable to shareholders was 5.522 billion yuan, a year-on-year decrease of 1.77%; non-recurring net profit was 5.336 billion yuan, a year-on-year decline of 4.22%.

NAURA stated that the revenue growth was mainly due to the continued rise in the domestic semiconductor equipment market and the acceleration of localization substitution, leading to a year-on-year increase of over 50% in integrated circuit equipment revenue. The year-on-year decline in net profit attributable to shareholders was attributed to the increase in R&D expenses and equity incentive costs, as well as the year-on-year decline in the company’s gross margin.

Reporters from the Times Weekly observed that in 2025, NAURA Technology Group experienced a significant year-over-year increase in its 'four expenses' (i.e., sales expenses, administrative expenses, financial expenses, and R&D expenses). The company's workforce also surged by 4,747 employees year-over-year, reaching a total of 21,101 employees. Despite the substantial expansion in business scale, the company’s gross margin dropped by 2.83 percentage points year-over-year to 40.10%.

On April 20, NAURA Technology Group told reporters from the Times Weekly: 'Compared with leading international companies, our company still lags behind in terms of R&D investment scale, number of R&D personnel, and their structure. There is also room for improvement in product technology levels and full-category coverage capabilities. The company will continue to maintain high-intensity R&D investment, steadily expand the R&D team, and optimize the composition of R&D personnel.'

On April 20, NAURA Technology Group's stock price plummeted more than 5% at one point but closed up 0.28% at 471.23 yuan per share, giving the company a market value of 341.6 billion yuan.

Image source: Tuchong

Revenue growth exceeded 30%, while net profit declined after a decade.

As the leading domestic semiconductor equipment company, NAURA Technology Group, after maintaining double-digit revenue and net profit growth for 10 consecutive years, saw 'revenue growth without profit growth' in 2025.

According to the financial report, in 2025, the company's revenue increased by 30.85% year-over-year, but the net profit attributable to shareholders slightly decreased by 1.77%. The last time such 'revenue growth without profit growth' occurred was in 2014.

Behind the revenue growth is the rapid expansion of NAURA Technology Group’s business scale. The company stated that in 2025, its market share in key areas of integrated circuit equipment—such as etching, thin-film deposition, furnace tubes, and wet cleaning—steadily increased. Meanwhile, new products like ion implantation quickly gained traction, forming new sources of growth, and significantly increasing process coverage and market share. Revenue from integrated circuit equipment grew by over 50% year-over-year, driving a substantial increase in overall revenue.

Breaking it down by product, etching equipment remains a major source of revenue for NAURA Technology Group, with revenue from etching equipment exceeding 10 billion yuan in 2025. According to authoritative data, etching equipment accounted for 18.5% of capital expenditures in the integrated circuit equipment sector in 2025, with a global market size of approximately 158 billion yuan.

NAURA Technology Group told reporters from the Times Weekly: 'Driven by both the explosive demand for AI computing power and the accelerated localization of semiconductor equipment, China’s logic chips, memory chips, and advanced packaging sectors are all set to experience large-scale growth. As a leading domestic semiconductor equipment company, our products fully cover these areas, and we will benefit greatly from the overall industry growth.'

While rapidly expanding its business scale, NAURA Technology Group’s gross margin showed a year-over-year decline. In 2025, the company’s gross margin was 40.10%, a decrease of 2.83 percentage points compared to the previous year.

In fact, NAURA Technology Group's gross margin has been declining quarter-over-quarter since the second quarter of 2025. The company’s gross margins for the first quarter, semi-annual, and third quarter reports of 2025 were 43.02%, 42.17%, and 41.41%, respectively.

NAURA explained in its annual report that the main reason for the decline in gross margin was the significant increase in component iteration and upgrade costs during the client verification process for new products.

NAURA told reporters from the Times Weekly, “The general verification cycle in the semiconductor equipment industry is 6-18 months, depending on product complexity and customer process requirements. The company’s new products strictly follow the general procedures of the semiconductor equipment industry to advance customer validation, and revenue recognition adheres to the relevant provisions of corporate accounting standards.”

“Four expenses” surge, with over 4,700 new hires in one year

Behind the decline in net profit, all four of NAURA’s expenses saw substantial year-over-year increases in 2025.

Financial reports show that NAURA’s sales expenses in 2025 increased by 48.57% year-over-year to 1.636 billion yuan. The company stated this was due to an expanded market scale, resulting in increased personnel in market expansion and customer service teams, leading to higher compensation and equity incentive costs. In 2025, the company’s equity incentive expenses increased by 274 million yuan year-over-year.

Regarding administrative expenses, NAURA’s administrative expenses in 2025 increased by 58.67% year-over-year to 3.433 billion yuan. The company attributed this to the consolidation of Xinyuan Microelectronics’ administrative expenses, increased depreciation and amortization at the Taima industrialization base for semiconductor equipment, and rising managerial compensation and equity incentive expenses.

As for financial expenses, NAURA’s financial expenses in 2025 surged by 264.78% year-over-year to 229 million yuan. The company stated that this was due to increased borrowing to meet order growth, R&D investment, and acquisition needs, resulting in higher interest expenses.

According to NAURA’s annual report, by the end of 2025, the company’s short-term borrowings had increased significantly from 94.24 million yuan in the same period last year to 319 million yuan; long-term borrowings also rose sharply from 3.946 billion yuan in the same period last year to 12.97 billion yuan.

Regarding R&D expenses, NAURA’s R&D expenses in 2025 increased by 46.96% year-over-year to 5.435 billion yuan. The company stated that it continued to expand its R&D team, leading to increased compensation and equity incentive costs for R&D personnel, as well as higher material testing fees for R&D purposes.

NAURA Technology Group told reporters from the Times Weekly that the cost of prototype machines and parts iteration for verification, as well as the salaries of R&D personnel, are included in R&D expenses, while costs related to sales and service personnel are recorded as selling expenses. According to the company’s strategy, in 2026, the company will continue to maintain high R&D investment intensity, focusing on advanced integrated circuit manufacturing equipment and advanced packaging-related equipment. The company will also consider improving its product portfolio through acquisitions.

According to NAURA's annual report, the number of R&D personnel increased by 42.07% year-on-year to 6,511 people; the proportion of R&D personnel increased by 2.84 percentage points year-on-year to 30.86%; the revenue share of R&D expenses increased by 0.53 percentage points year-on-year to 18.49%.

Overall, NAURA's workforce size in 2025 increased significantly by 4,747 people year-on-year to 21,101 people.

NAURA told reporters from the Times Weekly: 'The company believes that it is currently at a dual historical opportunity period of AI computing power explosion and the localization replacement of semiconductor equipment. It is necessary to prepare talent reserves in advance to seize market opportunities. The expansion of personnel mainly focuses on R&D and customer service.'

Reporters from the Times Weekly noticed that there is a significant difference in revenue per employee between NAURA and other companies in the same industry. As leading semiconductor equipment companies, Advanced Micro-Fabrication Equipment achieved revenue of 12.385 billion yuan in 2025 with 2,963 employees, generating an average revenue per employee of 4.1798 million yuan; TopJade Technology’s 2025 earnings report shows that the company achieved revenue of 6.519 billion yuan, with 1,569 employees as of the end of Q2 2025, generating an average revenue per employee of approximately 4.1549 million yuan. In contrast, NAURA's average revenue per employee was only 1.865 million yuan.

Zhang Xiaorong, director of the Deep Technology Research Institute, analyzed for the Times Weekly on April 19: 'NAURA has a wide range of operations with more than 100 types of equipment categories, which requires a large number of R&D and production personnel, naturally diluting revenue per employee. AMEC and TopJade focus only on a few high-end, high-priced equipment categories, so they have fewer employees but higher output value, making their per-employee efficiency significantly higher.'

In a research report dated April 19, Guotai Haitong Securities stated that NAURA is actively developing multiple high-end semiconductor equipment products and continuously expanding its product boundaries. Its growth in the coming years will still come from its platform-based layout in the integrated circuit equipment field, with increasing penetration in advanced logic chip processes and memory chip processes.

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