JCET - A: Resilient 3Q26, capex acceleration to support long-term growth; OW

JCET delivered resilient 3Q26 results, with sales and net profit growing both YoY and QoQ and in line with our expectations. Gross margin expanded on high utilization, a richer product mix and successful price increases, and we expect 4Q26 revenue and profit to grow further sequentially. The company raised its 2026 investment budget to Rmb18.2bn, capturing the current order surge while building for the long run, with capacity expansion targeted at 2.5D/3D advanced packaging and high-density memory. Near-term extra depreciation will pressure margins, but rising value content and an upgraded product offering should drive structural margin expansion; we model a 19%/46% sales/earnings CAGR during 2026-28E. We trim our Dec-27 PT to Rmb108.0 based on an unchanged 40x one-year forward PE, on par with the A-share peers' average, and maintain Overweight, viewing the recent pullback as an attractive risk/reward.