VGT(SZ:300476) Dongguan Securities·2025-07-04 08:37Investment Rating - The report maintains a "Buy" rating for Shenghong Technology (300476) [1] Core Views - The company is expected to benefit from the booming AI demand, with significant growth in its high-value products, particularly in the PCB sector, which includes HDI and high-layer boards [3][4][11] - Shenghong Technology has established strong relationships with major international clients, which is expected to drive continued order growth [4][65] - The company is actively expanding its high-end production capacity to meet increasing customer demands, positioning itself favorably in the AI computing market [4][65] Summary by Sections Company Overview - Shenghong Technology has been deeply engaged in the PCB field for many years, achieving a leading market position. It ranks 13th globally among PCB manufacturers and 4th among domestic firms [11] - The company has multiple production bases globally, including in Huizhou, Changsha, and Vietnam, enhancing its ability to meet international customer needs [12] Financial Performance - In Q1 2025, the company reported revenue of 43.12 billion yuan, a year-on-year increase of 80.31%, with net profit growing by 339.22% [17][21] - For 2024, the company expects revenue to exceed 10.73 billion yuan, a 35.31% increase from the previous year, with net profit projected at 1.15 billion yuan [14][73] Product Demand and Market Trends - The demand for HDI products is expected to surge due to their advantages in high-density interconnection and reliability, particularly in AI servers [24][57] - The global AI server market is projected to grow significantly, with IDC estimating a market size of 158.7 billion USD in 2025, reflecting a 26.86% year-on-year increase [50] Competitive Advantages - The company has a strong technological edge, with advanced capabilities in producing high-layer HDI and multi-layer boards, which are critical for AI applications [4][65] - Shenghong Technology has successfully entered the supply chains of major clients like NVIDIA, AMD, and Tesla, which enhances its order visibility and growth potential [65] Future Outlook - The company forecasts EPS of 5.65 yuan and 7.51 yuan for 2025 and 2026, respectively, with corresponding PE ratios of 25 and 19 [3][4][73] - The expansion of production capacity in Vietnam and Thailand is expected to significantly increase the company's market share in the HDI segment by 2029 [66][72]