Huahai Chengke Increases Revenue Without Increasing Profit, Net Profit Declines 39.47% in 2025, LQFP and Other Advanced Packaging Materials Enter Small-Batch Production

Hua Hai Chengke Reports Increased Revenue but Decreased Profit in 2025

On March 17 evening, Hua Hai Chengke released its annual report showing that in 2025, the company achieved operating revenue of 458 million yuan, a 38.12% increase compared to the same period last year; net profit was 24 million yuan, down 39.47%; and net profit after deducting non-recurring items was 20 million yuan, down 42.32%.

Regarding the reasons for the performance changes, Hua Hai Chengke stated that during the reporting period, driven by a favorable industry environment and the inclusion of new subsidiaries in the consolidated scope, the company’s order volume increased, boosting revenue compared to the previous year. However, factors such as employee stock incentive expenses, increased depreciation of new factories and equipment, led to declines in total profit, net profit, and earnings per share year-over-year.

Hua Hai Chengke mainly focuses on the research and industrialization of semiconductor packaging materials. Its main products are epoxy molding compounds and electronic adhesives, used in semiconductor packaging and board-level assembly.

Epoxy molding compounds (referred to as “EMC”) are thermosetting chemical materials used in semiconductor packaging, specifically in the molding process, and are a primary source of revenue for the company.

During the reporting period, Hua Hai Chengke’s revenue from epoxy molding materials was 428 million yuan, a 35.61% increase year-over-year; gross profit margin was 26.35%, up 1.19 percentage points from last year. Additionally, the company’s adhesive revenue was 28 million yuan, an 83.29% increase, with a gross profit margin of 31.09%, down 3.96 percentage points from the previous year.

In terms of profitability, the company’s gross margin during the period was 26.66%, up from 24.92% last year, an increase of 1.74 percentage points.

Regarding the year-over-year increase in gross margin, Hua Hai Chengke explained that sales of epoxy molding compounds for mid-to-high-end products like QFN and BGA saw significant growth, and the company’s adhesives continued to make breakthroughs in advanced packaging fields, accelerating product structure transformation toward advanced packaging.

During the period, the company’s production volume of epoxy molding compounds reached 15,700 tons, a 26.45% increase year-over-year; sales volume increased by 21.82%, and inventory rose by 185.12%. Adhesive production was 60,300 tons, up 66.34% in production and 28.10% in sales, with inventory increasing by 40.09%. The newly added product, Qingrun mold material, achieved scale from zero to one, with production, sales, and inventory all increasing 100% year-over-year.

Hua Hai Chengke stated that the increase in epoxy mold compound inventory mainly resulted from the inclusion of new subsidiaries in the consolidated scope; the rise in adhesive production was mainly due to increased sales orders; Qingrun mold material is a new product introduced this year.

Notably, in the post-Moore era, chip physical performance approaches its limits, and the economic benefits of higher technology nodes have slowed. The semiconductor industry’s focus has shifted from improving wafer process nodes to innovating packaging technologies. The development of advanced packaging technologies such as WLCSP (Wafer-Level Chip-Scale Packaging), FCCSP (Flip-Chip Chip-Scale Package), FCBGA (Flip-Chip Ball Grid Array), 2.5D packaging, 3D packaging, and SiP (System-in-Package) has become a key pathway to continue and surpass Moore’s Law and enhance system performance.

In the field of advanced packaging, the company stated that its products used in LQFP, QFN, and BGA have been validated by well-known clients like Changdian Technology and Tongfu Microelectronics, and have begun small-batch production and sales, becoming a new growth point. Meanwhile, the company is closely following future trends in advanced packaging, with products used in FC, SiP, FOWLP/FOPLP, etc., gradually passing customer evaluations and expected to achieve industrialization step by step.

Regarding the challenges in expanding high-performance product shares, Hua Hai Chengke mentioned during a research interview with institutional investors at the end of January that in high-performance products, encapsulation materials account for a small proportion of costs and are in the final stage of chip manufacturing, significantly affecting product yield. Customers tend to be cautious when switching suppliers. Some domestic packaging and testing manufacturers operate under an OEM model, following fixed BOM lists from design firms, making material changes difficult.

During the reporting period, the company completed the acquisition and integration of Hengsuo Huawei. After the merger, the company’s annual production and sales of semiconductor epoxy molding compounds exceeded 25,000 tons, firmly establishing its leading position domestically and ranking second globally in shipment volume.

Hua Hai Chengke stated that in the field of advanced packaging, Hengsuo Huawei and its Korean subsidiary achieved breakthroughs with granular epoxy molding compounds (GMC) in memory devices. The Hengsuo GR910 series has passed NAND Flash assessments and has begun mass supply.