Shandong Sinocera Func Material

On September 11, major A-share indices opened lower. The MLCC concept saw an early-session surge, with Shuangxing New Materials hitting limit up in a straight line, while Yunzhong Technology, Fenghua Advanced Technology, Sinocera, and Jiemei Technology led gains. On the news front, MLCC leader Murata Manufacturing officially issued a notice announcing a product-line optimization starting in fiscal 2026, under which it will discontinue some MLCC products and expand other capacity. The discontinuation covers specific part numbers in consumer-grade standard series and automotive-grade series. Market analysts said Murata aims to stop producing low-margin or certain mature part numbers to free up capacity and focus on expanding advanced high-end product lines, prioritizing higher-margin, high-value-added products for AI servers amid limited capacity. On the same day, the tourism sector saw sporadic moves, with Qujiang Cultural Tourism hitting limit up and Guilin Tourism briefly touching limit up. Power stocks also moved sporadically, with Mindong Electric Power locking in its third consecutive limit-up board. Optical fiber concepts strengthened against the market, with Zhaolong Interconnect rising more than 10 percent. The nonferrous metals sector pulled back broadly, with Jingyi Metal and Northern Copper hitting limit down. The media sector fell in choppy trading, with China Publishing hitting limit down.

On the afternoon of August 21, the MLCC concept rebounded in volatile trading, with Sinocera Materials rising more than 10%, and Sidike, Torch Electron, Boqian New Materials, Three-Circle Group, Fenghua Advanced Technology and other stocks among the top gainers. Behind the market action is the sustained price increase in the MLCC spot market that began in June 2026. As of August 2026, spot prices for ordinary standard products have risen more than 20%, while high-capacitance products such as 10 microfarad and 20 microfarad types used in AI servers have seen average increases of 60% to 80%, and some special models have doubled in price. Overseas leaders' earnings further confirm incremental AI computing demand. Murata's revenue in the second quarter of 2026 was 502.3 billion yen, up 20.7% year on year, and operating profit was 98.85 billion yen, up 59.8% year on year, with both revenue and profit setting record highs for a second quarter. Its MLCC business revenue was 282.508 billion yen, up 30% year on year, with orders in hand up 49.4% quarter on quarter and new orders up 85.5% year on year. Murata raised its full-year revenue guidance for fiscal 2026 to 2.11 trillion yen, an upward revision of 7.7% from its previous forecast, and added 80 billion yen specifically for expanding server MLCC production capacity. Samsung Electro-Mechanics reported second-quarter revenue of about 3.46 trillion won, up 24.2% year on year and a record quarterly high, with operating profit of 440.4 billion won, up 106.7% year on year. Institutions broadly expect this cycle to persist. Sealand Securities believes the shortage is spreading to consumer products, and the supply-demand gap for high-capacitance MLCCs may widen further in 2027. GF Securities notes that the current MLCC industry cycle is still in the early stage of an upcycle, and there may still be considerable room for price and profit elasticity to play out.

Sinocera Materials last week received 152 institutions for research, making it one of the A-share companies with the most institutional research visits that week. Company executives said during the research that benefiting from the recovery of industry prosperity and demand from AI servers and automotive electronics, MLCC dielectric powder sales grew steadily in the first half of the year, and some high-end production lines have been expanded. The subsequent release of new capacity is expected to further boost production and sales. In addition, the company's zirconia powder has gained development opportunities due to the national rare earth export control policy, with prices adjusted in a timely manner, and is expected to achieve both volume and price increases this year. Another company in focus, Shijia Photonics, received 139 institutions for research during the same period. The company disclosed that 400G and 800G AWG chips and components have been shipped in large volumes, 1.6T AWG chips have been shipped in small volumes, and pointed out that the supply of high-end optical chips remains relatively tight overall.

Sinocera Materials has released its 2026 mid-year report, with net profit attributable to shareholders reaching 363 million yuan, an increase of 9.36% compared to the same period last year, marking three consecutive years of growth. During the reporting period, total operating revenue was 2.513 billion yuan, up 16.64% year-on-year, achieving growth for five consecutive years. Net cash flow from operating activities was 456 million yuan, a year-on-year increase of 36.78%, also rising for three straight years. The company's latest asset-liability ratio stands at 26.61%, gross margin at 37.66%, and diluted earnings per share at 0.37 yuan, up 12.12% year-on-year.

Sentiment in the MLCC supply chain continues to rise, with upstream material sales growing rapidly and multiple companies announcing expansion plans. Sinocera's half-year report shows that, benefiting from downstream demand recovery and growth in emerging areas such as AI servers and automotive electronics, the company's sales of MLCC dielectric powders and electronic pastes increased quickly. Jiemei Technology's release film business has seen a significant sales jump since March this year, with volumes more than doubling year-on-year, and it expects supply to fall short of demand through the first half of next year. Sinocera announced that, effective July 27, 2026, it will raise the selling price of zirconia powder by approximately 10% to 40%. Hongyuan Electronics plans to raise no more than 300 million yuan for a technological transformation project to industrialize multilayer ceramic capacitors and adjustable capacitors, while Boqian New Materials intends to invest about 202 million yuan in a nickel powder expansion project.