Customer Concentration Risk Analysis Report of Nanda Optoelectronics (300346.SZ)

Jiangsu Nanda Optoelectronic Materials Co., Ltd. is a leading enterprise focusing on semiconductor materials, whose main products include MO sources (metal-organic sources), electronic special gases (fluorine-containing special gases, phosphine, arsine, etc.) and photoresists, etc.[0] The company is one of the core targets for domestic substitution of semiconductor materials in the A-share market.

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Year	Sales Share of Top 5 Customers	Sales Share of Top 1 Customer	Sales Share of Top 2 Customer	Sales Share of Top 3 Customer
2022	42.24%	12.49%	9.87%	8.19%
2023	35.28%	10.03%	9.00%	6.49%
2024/2025	45.0%	<10%	9.0%	6.5%

According to the data disclosed in the company’s 2023 annual report[0], the total sales amount to the top five customers was RMB 601 million, accounting for 35.28% of the annual total sales. Details are as follows:

• Top 1 Customer: RMB 171 million, accounting for 10.03%
• Top 2 Customer: RMB 153 million, accounting for 9.00%
• Top 3 Customer: RMB 111 million, accounting for 6.49%
• Top 4 Customer: RMB 89.81 million, accounting for 5.27%
• Top 5 Customer: RMB 76.50 million, accounting for 4.49%

The Herfindahl-Hirschman Index (HHI) is an authoritative indicator for measuring market concentration. The calculation results show:

• 2022
  : HHI = 393.06 → Low Concentration
• 2023
  : HHI = 271.65 → Low Concentration
• 2024
  : HHI = 271.59 → Low Concentration

HHI Evaluation Criteria: <1500 indicates low concentration, 1500-2500 indicates medium concentration, and >2500 indicates high concentration. Nanda Optoelectronics’ HHI index is far below 1500, which indicates that the customer distribution is relatively dispersed from a statistical perspective[0].

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Risk Dimension	Risk Level	Detailed Analysis
Single Customer Dependence	🟢 Low Risk	The proportion of sales from the top customer has always been below 13%, so the loss of any single customer will not have a significant impact on the company’s performance
Top Customer Concentration	🟡 Medium Risk	The top five customers account for 35-45% of sales, which is higher than the industry average of 30% for semiconductor materials
Industry Concentration	🟡 Medium Risk	Customers are mainly concentrated in two industries: IC integrated circuits and LCD liquid crystal display panels
Customer Stability	🟢 Low Risk	Established long-term, stable strategic cooperative relationships with leading enterprises, and the replacement cost of the supply chain is high
Domestic Substitution Dividend	🟢 Low Risk	The trend of domestic substitution of semiconductor materials is clear, which is conducive to the company’s expansion of new customers and reduction of concentration

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According to public information, the main customers of Nanda Optoelectronics are leading enterprises in the global semiconductor wafer and integrated circuit manufacturing sectors[0]:

Customer Type	Main Customer Characteristics
Semiconductor Wafer Manufacturers	The world’s top five wafer manufacturers including Shin-Etsu Chemical (Japan), SUMCO, Siltronic (Germany), GlobalWafers (Taiwan, China), SK Siltron (South Korea), etc.
IC/LCD Manufacturers	Leading domestic and overseas panel display and integrated circuit manufacturing enterprises
Cooperative Relationship	Long-term strategic cooperation, long supplier certification cycle, and high entry barriers

The company clearly stated: “The top five customers are mainly leading enterprises in IC, LCD and other fields, and have established long-term, stable strategic cooperative relationships with the company”[0].

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1. Downstream Industry Cycle Fluctuations
   : Customers are concentrated in the semiconductor industry, and when the industry enters a downward cycle, the company may face pressure from reduced orders.

2. Customer Churn Risk
   : Although the dependence on a single customer is low, if the top several customers reduce orders at the same time, it will still have a significant impact on the company.

3. Limited Bargaining Power
   : Dependence on large customers may weaken the company’s voice in price negotiations.

1. Top Customer Accounts for <10%
   : The company proactively controls single-customer dependence to diversify risks.

2. Clear Customer Expansion Plan
   : In investor Q&A, the company stated that it will “actively promote the expansion of new customers, new markets and new applications”[0].

3. Domestic Substitution Opportunities
   : Export controls on materials such as photoresists by countries such as Japan have instead created market opportunities for Nanda Optoelectronics in domestic substitution.

4. High Certification Barriers
   : The certification cycle for semiconductor material suppliers is long and requirements are strict, so existing customer relationships have strong stickiness.

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: Nanda Optoelectronics has a of customer concentration, but its dependence on a single customer is low. The HHI index indicates that the customer distribution is relatively dispersed. The company has recognized the relevant risks and is actively responding to them.

Indicator	Assessment
Customer Concentration Level	Moderate (but below the warning line)
Single Customer Risk	Low
Customer Stability	High
Future Improvement Space	Relatively Large (Domestic Substitution + New Customer Expansion)

: Customer concentration is a risk factor that Nanda Optoelectronics needs to continue to pay attention to. However, considering the low proportion of sales from the top customer, stable relationships with leading customers, and growth opportunities brought by domestic substitution, the risk is generally controllable. It is recommended to continuously track changes in the sales share of the company’s top five customers and the progress of new customer expansion.

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[0] Jinling API Financial Database - Company Overview, Financial Analysis and Public Disclosure Documents of Nanda Optoelectronics (300346.SZ)

[1] 2023 Annual Report of Jiangsu Nanda Optoelectronic Materials Co., Ltd. (https://stockn.xueqiu.com/SZ300346/20240409345183.pdf)

[2] Investor Relations Activity Record of Jiangsu Nanda Optoelectronic Materials Co., Ltd. on April 8, 2025 (https://file.finance.qq.com/finance/hs/pdf/2025/04/08/1223031932.PDF)