[China Microsystems: Net profit in the third quarter increased by 159% year-on-year and dropped 30% month-on-month] On October 30, China Microsystems (688012.SH) announced that it achieved operating income of 10.326 billion yuan in the first three quarters, a year-on-year increase of 28.08%; net profit attributable to shareholders of listed companies was 4.134 billion yuan, a year-on-year increase of 241.31%. In the third quarter, operating income was 3.635 billion yuan, a year-on-year increase of 17.18%; net profit attributable to shareholders of listed companies was 1.309 billion yuan, a year-on-year increase of 159.02%. The main reason for the change in performance is that when operating income increased by 28.08% in the first three quarters of 2026, gross profit increased by approximately 1.021 billion yuan compared with the same period last year; in the first three quarters of 2026, the company's R&D expenditure increased by 699 million yuan (an increase of approximately 27.70%) compared with the same period last year. R&D expenditure accounted for approximately 31.20% of the company's operating income, which is much higher than the average value of the Science and Technology Innovation Board. The company is currently promoting the research and development of more than 20 new equipment in six major categories at the same time. The new product research and development cycle has been significantly accelerated, and it only takes two years or less to develop a new product; the company's external equity investment measured at fair value and its changes included in the current profit and loss will generate a total of approximately 1.940 billion yuan in fair value change income and investment income in the first three quarters of 2026, an increase of approximately 1.591 billion yuan from 349 million yuan in the same period last year. The company sold part of its shares in Tuojing Technology Co., Ltd. during this period, generating investment income of approximately 953 million yuan. Xiaocai Note: The company’s Q3 net profit was 1.309 billion and Q2 net profit was 1.895 billion. Based on this calculation, Q3 net profit dropped 30% month-on-month.