Analysis of Tongcheng New Materials (603650) Limit-Up: Outbreak of Photoresist Concept and Domestic Substitution Opportunities

Tongcheng New Materials (603650) strongly hit the daily limit-up today, with its share price reaching a record high of RMB 51.57[0]. The limit-up is the result of the resonance of multiple factors.

A-share photoresist concept stocks were active at the opening today, with both Tongcheng New Materials and Guofeng New Materials hitting the limit-up[1], and the sector’s overall gain led the market. As a core material in semiconductor manufacturing, photoresist benefits from the dual positives of global chip industry chain restructuring and accelerated domestic substitution.

The strong earthquake in Japan in December 2025 impacted the high-end photoresist production capacity of Japanese enterprises such as Tokyo Ohka Kogyo and Shin-Etsu Chemical[3]. Coupled with delayed export approvals and tightened quotas for Japanese photoresist exports to China[4], against the backdrop of strained China-Japan relations, the urgency to reduce dependence on Japanese technology and materials has risen sharply. China aims to achieve 40% photoresist self-sufficiency by 2026 (only about 10% in 2024)[4], and this policy target provides huge market space for domestic photoresist enterprises.

Tongcheng New Materials was included in the CSI A500 Index as a constituent stock[6]. The index rose 0.25% today, driving passive allocation demand from relevant funds and providing incremental capital support for the stock price.

The company is the only listed domestic enterprise covering the full range of photoresist products including G/I-line, KrF, and ArF, with over 40% domestic market share of KrF photoresist[7]. It has in-depth partnerships with leading enterprises such as SMIC, Yangtze Memory Technologies Co., Ltd. (YMTC), and BOE. In the first three quarters of 2025, its operating revenue reached RMB 2.523 billion, with net profit attributable to shareholders of the parent company of RMB 520 million, a year-on-year increase of 11.46%[8], leading the industry with steady performance growth.

From the perspective of technical indicators, the stock price shows a typical breakout pattern[9]:

Indicator	Status	Signal Interpretation
20-day Moving Average	RMB 46.26	Stock price is about 11.5% above the moving average
50-day Moving Average	RMB 43.14	Moving averages are in a bullish arrangement
MACD	Golden Cross	Medium-term buy signal confirmed
KDJ	K:59.4, J:99.3	Short-term overbought but bullish momentum
RSI(14)	Overbought Zone	Pullback risk exists

Looking at recent gains, the stock has a 1-day gain of +10.00%, 5-day gain of +16.86%, 1-month gain of +20.66%, and 6-month gain of +62.37%[0], showing a strong upward trend. However, RSI has entered the overbought zone, and there is a demand for short-term adjustment; meanwhile, the Beta value is only 0.11[0], indicating low correlation with the broader market and strong independence.

: The discussion on Dongfang Wealth Stock Bar is highly heated[5]. Investor sentiment is relatively optimistic, with some users calling it the “top leader”, and changes in limit-up buy order volume have become the focus of market attention. However, some users believe that “the one-word limit-up won’t last long” and hold a cautious attitude towards its sustainability.

: Institutions such as CSC Financial are optimistic about domestic substitution opportunities in the electronic materials field[9]. Research reports predict that the company’s net profit will reach RMB 740-790 million in 2026 (year-on-year growth of +20%~+25%), with a target price of RMB 57-61.7[7]. Photoresist revenue is expected to grow by over 50%, with a gross profit margin of 24%-25%. The current P/E ratio is approximately 53.72x, which is at the medium level in the industry, but has increased significantly compared to historical valuations[0].

1. Valuation Risk
   : The current P/E ratio reaches 53.72x, and the stock price has already priced in many optimistic expectations[0]
2. Liquidity Risk
   : The one-word limit-up means reduced liquidity, making it difficult to buy when chasing highs
3. Technical Overbought
   : RSI has entered the overbought zone, with short-term pullback pressure
4. Excessive Short-Term Gains
   : The 5-day gain is 16.86%, and the risk of chasing highs is accumulating
5. Verification Cycle Risk
   : The customer certification cycle for semiconductor materials is long (2-3 years)

1. Long-term Logic of Domestic Substitution Established
   : Supported by policies and external catalysts, there is huge room for the penetration rate of domestic photoresist to increase
2. Stable Industry Leading Position
   : With over 40% market share of KrF photoresist, it is the only domestic solution provider for YMTC’s 3D NAND 193-layer stacking process[7]
3. Incremental Capital Allocation
   : Inclusion in the CSI A500 Index brings passive allocation demand

Type	Price Range	Description
Resistance Level	RMB 51.57	Immediate limit-up price
Technical Target Price	RMB 53.70	Given by short-term technical analysis[9]
Medium-term Target Price	RMB 57-61.7	Institutional forecast range[7]
Support Level	RMB 46.26	20-day moving average position

Scenario	Trigger Condition	Trend Forecast
Optimistic	Stable limit-up buy order volume, continuous strength of the sector	Continuous limit-ups, opening up upward space
Neutral	Stable limit-up buy order volume, moderate trading volume	Fluctuating upward, digesting profit-taking orders
Cautious	Decrease in limit-up buy order volume, opening and turnover	Short-term pullback, testing the support of the 20-day moving average

• Short-term: Investors already holding positions can continue to hold and observe changes in limit-up buy order volume; investors not holding positions should not blindly chase highs
• Medium-term: Consider accumulating positions on dips when the price pulls back to the RMB 46-48 range
• Risk Control: Reduce positions to control risks if the price breaks below the 20-day moving average (RMB 46.26)

Today’s limit-up of Tongcheng New Materials is the result of the resonance of four factors:

. As a domestic leader in photoresist, the company has significant competitive advantages in breakthroughs in high-end KrF/ArF products, in-depth customer partnerships, and policy support. The long-term growth logic of domestic photoresist still holds, with broad market space. However, the current valuation is already at a high level, and the risk of short-term high-chasing is relatively large after the stock price hit a record high. Investors should closely monitor changes in limit-up buy order volume and the sustainability of sector sentiment.

: In the short term, it is necessary to be alert to the adjustment risk brought by technical overbought; in the medium term, investors can accumulate positions on dips focusing on the domestic substitution theme.