Core Insights - The report from HSBC highlights a significant technological and specification upgrade in the printed circuit board (PCB) and copper-clad laminate (CCL) sectors driven by the rapid evolution of AI servers [1][2] - The introduction of NVIDIA's next-generation Rubin platform is identified as a key catalyst for this upgrade cycle, which is expected to increase both the shipment volume and average selling prices of related products [1][2] Group 1: Drivers of Growth - The growth in the PCB/CCL industry is primarily driven by two engines: NVIDIA's new platform and the ASIC chips from major cloud service providers (CSPs) [2] - NVIDIA's Rubin platform, expected to start mass production in the second half of 2026, will trigger a value leap in PCB/CCL through new structures and increased usage of PCBs [2] - The ASIC market is rapidly becoming a critical catalyst, with major CSPs projected to spend over $420 billion on capital expenditures by 2025, a 61% increase year-on-year [2] Group 2: Pricing Environment - The pricing environment for CCL is becoming increasingly favorable due to tight supply conditions and rising raw material costs [4] - The CCL cost index has risen by 40% over the past six months, driven by a 27% increase in copper prices and a 72% increase in glass fiber prices [4] - Manufacturers are expected to pass on these cost increases to downstream PCB customers, particularly in the high-end market [4] Group 3: Key Players and Market Position - Shengyi Technology is positioned to maintain its leading role in supplying M9-level CCL for NVIDIA's Rubin platform, benefiting from a surge in AI data center orders [4] - Shenzhen South Circuit is becoming a core supplier for major clients like Huawei and Google in the high-value AI PCB sector [4] - Dazhong Laser's M9-level CCL materials are expected to drive demand for high-end drilling equipment, reflecting the increasing complexity of PCB manufacturing [5]

Group 1 - On November 6, a total of 33 companies were investigated by institutions, with 19 companies being surveyed by funds, indicating a strong interest in specific firms [1] - Among the surveyed companies, Honghua Digital Technology attracted the most attention, with 22 funds participating in the investigation [1] - The companies surveyed are distributed across various sectors, with the electronics and basic chemicals industries having the highest representation, each with three companies [1] Group 2 - The total market capitalization of the surveyed A-share companies includes four with a market cap exceeding 50 billion yuan, and among them, Shenzhen South Circuit has a market cap over 100 billion yuan [1] - In terms of market performance, 11 of the surveyed stocks increased in value over the past five days, with Dazhong Mining leading with a rise of 20.92% [1] - Conversely, seven stocks experienced declines, with Honghua Digital Technology showing the largest drop at 4.67% [1] Group 3 - Among the surveyed stocks, New Hecheng saw a net inflow of 208 million yuan over the past five days, indicating strong institutional interest [2] - Other companies with significant net inflows include Northeast Securities and Shenzhen South Circuit, with net inflows of 152 million yuan and 92.9 million yuan, respectively [2] - The table of surveyed companies highlights their respective fund participation, latest closing prices, and recent performance, showcasing a diverse range of industries [2]

Core Viewpoint - The company, Shenzhen South Circuit Technology Co., Ltd. (深南电路), reported that the overall capacity utilization rate of its PCB business remains high in Q3 2025, while the capacity utilization rate of its packaging substrate business has significantly increased due to the growing demand in the storage market and application processor chip products [1]. Group 1 - The PCB business is experiencing high overall capacity utilization rates as of Q3 2025 [1] - The packaging substrate business has seen a noticeable increase in capacity utilization rates quarter-on-quarter [1] - The growth in demand for storage market and application processor chip products is driving the improvement in capacity utilization [1]

Group 1 - The event "Hongmeng + Intelligent Manufacturing" was held in Longgang District, Shenzhen, aiming to create a platform for government-enterprise collaboration, technical exchange, and resource connection, fostering consensus on industrial upgrading [1][2] - Leading companies in the Hongmeng ecosystem, such as Deep Open Hong and Hualong Xunda, shared cutting-edge technology practices, outlining a clear blueprint for the integration of the Hongmeng ecosystem with intelligent manufacturing [1] - A total of 16 key manufacturing enterprises participated, with young professionals from the computer field engaging in the discussions, injecting innovative energy into the exchanges [1] Group 2 - The salon is a concrete action responding to the district's strategy, serving as a key measure to connect "policy supply - technical support - enterprise demand" [2] - The street has laid a solid foundation for the construction of the Hongmeng ecosystem by visiting potential companies and identifying software and hardware needs [2] - Future actions include optimizing the Hongmeng industry scenario list, accelerating the creation of demonstration projects, and building a virtuous ecosystem that benefits the government, enterprises, and the public [2]

Core Viewpoint - ShenNan Circuit (002916.SZ) reported that the overall capacity utilization rate of its PCB business remains high in Q3 2025, while the capacity utilization rate of its packaging substrate business has significantly increased month-on-month due to the growing demand in the storage market and application processor chip products [1] Group 1 - The PCB business is operating at a high overall capacity utilization rate in Q3 2025 [1] - The packaging substrate business has seen a noticeable month-on-month increase in capacity utilization due to rising demand [1]

Core Viewpoint - Deep South Circuit (002916.SZ) reported that the overall capacity utilization rate of its PCB business remains high in Q3 2025, while the packaging substrate business has seen a significant month-on-month increase in capacity utilization due to rising demand in the storage market and application processor chip products [1] Group 1 - The PCB business is maintaining a high overall capacity utilization rate as of Q3 2025 [1] - The packaging substrate business has experienced a noticeable month-on-month increase in capacity utilization [1] - Increased demand in the storage market and application processor chip products is driving the growth in the packaging substrate business [1]

Core Insights - The company disclosed an investor relations activity record highlighting the capabilities of HDI as a platform technology for high-density wiring in PCB boards [1] - The company's PCB business possesses HDI process capabilities, primarily applied in mid-to-high-end products across various downstream sectors including communication, data centers, industrial control medical, and automotive electronics [1] Summary by Categories Technology - HDI is identified as a platform technology that enables high-density wiring for PCB boards [1] Business Application - The company's PCB business utilizes HDI technology in several mid-to-high-end products [1] - Key downstream sectors for the application of HDI technology include communication, data centers, industrial control medical, and automotive electronics [1]

Group 1: Financial Performance - The company's overall gross margin improved in Q3 2025, driven by increased demand for storage packaging substrates and higher capacity utilization rates [1] - PCB data center and wired communication business revenues continued to grow, contributing to a slight increase in gross margins [1] - The revenue from packaging substrates increased quarter-on-quarter, with significant growth in storage packaging substrates [2] Group 2: Business Expansion - The PCB business focuses on communication equipment, with key expansions in data centers (including servers) and automotive electronics [1] - The company has a wide range of packaging substrate products, including module packaging substrates and storage packaging substrates, primarily used in mobile smart terminals and servers/storage [2] Group 3: Production Capacity and Technology - The company has achieved mass production capability for FC-BGA packaging substrates with up to 20 layers, while R&D for 22-26 layer products is progressing on schedule [3] - New factories in Nantong Phase IV and Thailand are under construction, with the Thailand factory already in trial production [4] - The overall capacity utilization rate remains high, with a noticeable increase in the packaging substrate business due to rising demand [5] Group 4: Raw Material Prices - Key raw materials include copper-clad laminates, prepregs, copper foil, gold salt, and inks, with some experiencing price increases in Q3 2025 due to commodity price fluctuations [6] - The company is actively monitoring international commodity price changes and maintaining communication with suppliers and customers [6] Group 5: Technology Application - HDI technology is applied in the PCB business, primarily for mid-to-high-end products in communication, data centers, industrial control, medical, and automotive electronics [8]

Core Insights - The PCB industry is experiencing unprecedented growth driven by the explosive demand for high-end HDI and packaging substrates due to AI server requirements [1][2][3] - A total of 38 listed companies in the A-share PCB sector reported a combined revenue of 1560.42 billion yuan and a net profit of 168.62 billion yuan for the first three quarters of 2025, both figures marking historical highs [2][3] - The industry is witnessing a significant expansion in high-end production capacity, raising concerns about potential price competition if AI demand does not sustain post-2026 [1][5][7] Revenue and Profit Growth - The PCB sector's total revenue increased by approximately 385 billion yuan or 32.75% year-on-year, while net profit rose by 73.51 billion yuan or 77.3% [1][2] - Leading companies such as Huadian Co., Shenghong Technology, and Shennan Circuit are showing robust growth, with revenue exceeding 10 billion yuan for several firms [2][3] - Notable performers include Shenghong Technology with a revenue growth of 83.40% and a net profit increase of 324.38% [2][3] High-End Product Demand - The surge in AI server demand is identified as the primary driver of the PCB industry's high growth, particularly for high-end products like HDI and packaging substrates [3][4] - Companies that successfully capture high-end PCB market demand are experiencing faster growth, with significant differences in profit margins across the sector [3][4] - Huadian Co. and Shenghong Technology reported sales net profit margins exceeding 20%, while others like Shennan Circuit and Shengyi Technology surpassed 13% [3][4] Capacity Expansion and Market Competition - Major PCB manufacturers are investing heavily in expanding high-end production capacity to meet the rising demand for AI-related products [5][6] - Companies like Shengyi Technology and Huadian Co. are undertaking significant capital projects to enhance their production capabilities [5][6] - The current expansion trend raises concerns about intensified competition and potential profit erosion if demand does not keep pace with the new capacity coming online [5][7] Future Outlook and Challenges - Analysts express caution regarding the sustainability of the current demand growth, suggesting that a slowdown could lead to oversupply and price competition in the future [7] - The PCB industry is characterized by high fixed costs, making capacity utilization critical for profitability, and any decline in utilization could severely impact margins [7] - Future competition may shift from quantity to quality, focusing on technological advancements and customer loyalty, favoring companies with early expansion and technological advantages [7]

Market Overview - The large fund concept sector experienced a decline of 0.73% on November 5, with Shengke Communication leading the drop [1] - The Shanghai Composite Index closed at 3969.25, up 0.23%, while the Shenzhen Component Index closed at 13223.56, up 0.37% [1] Stock Performance - Notable gainers in the large fund concept sector included: - Xingfa Group (600141) with a closing price of 28.89, up 5.02% and a trading volume of 325,000 shares, totaling 920 million yuan [1] - Baiwei Storage (688525) closed at 124.90, up 2.44% with a trading volume of 212,800 shares, totaling 2.558 billion yuan [1] - Tuojing Technology (688072) closed at 310.20, up 1.77% with a trading volume of 72,900 shares, totaling 2.219 billion yuan [1] - Major decliners included: - Shengke Communication (688702) closed at 110.25, down 3.73% with a trading volume of 43,500 shares, totaling 482 million yuan [2] - Guoxin Technology (688262) closed at 30.34, down 3.10% with a trading volume of 131,100 shares [2] - Huahong Company (688347) closed at 120.97, down 2.58% with a trading volume of 213,600 shares, totaling 2.594 billion yuan [2] Capital Flow - The large fund concept sector saw a net outflow of 2.352 billion yuan from institutional investors, while retail investors contributed a net inflow of 2.305 billion yuan [2] - Notable capital flows included: - Tuo Jing Technology (688072) with a net inflow of 156 million yuan from institutional investors [3] - Deep South Circuit (002916) with a net inflow of 116 million yuan from institutional investors [3] - Zhongwei Company (688012) with a net inflow of 83.21 million yuan from institutional investors [3]