Key Takeaways from Shengyi Technology (600183.SS) 2Q25 Results Briefing Company Overview - **Company**: Shengyi Technology (SYTECH) - **Industry**: High-speed copper-clad laminate (CCL) for AI-related applications Core Points 1. **Rising Order Momentum**: Monthly shipments of high-speed CCL are expected to increase to 800-900k sheets in 3Q25 from 700-800k sheets at the end of 2Q25, indicating a 10-15% rise in run rate [1][3] 2. **AI-Related Business**: The majority of AI-related CCL shipments are directed towards NVDA GB200 and GB300 servers, primarily for switches on M8 PCBs [1][3] 3. **New Plant Developments**: New plants in Jiangxi and Thailand are under development, with the Jiangxi plant expected to have a monthly capacity of 1.5 million sheets starting in 4Q25, and the Thai plant with a capacity of 0.7 million sheets commencing in 1Q26 [1][9] 4. **Stable ASP**: Average Selling Price (ASP) remains firm, but is unlikely to rise in the near term unless there is a surge in demand from non-AI segments [1][3] 5. **Product Mix Upgrade**: Management sees good order momentum for 3Q25, allowing for a shift towards AI-oriented products, moving away from non-AI downstream applications like home appliances and consumer electronics [3][4] 6. **High-End AI Products**: SYTECH is working on high-end AI products, with a focus on NVDA's supply chain, although it is considered a latecomer compared to foreign rivals [4][10] 7. **Certification Delays**: ASIC certification for GPU vendors is still pending, with management noting that Chinese companies typically take longer to achieve certification [8] 8. **No HK Listing Plans**: SYTECH has no plans for a Hong Kong listing, opting to finance new plants through internal cash flow due to strong cash generation [10] 9. **Upstream Supply**: The company reports reasonable upstream supply, including low Dk/2 materials, contrary to market perceptions of a severe shortage [11] Financial Metrics - **Current Price**: Rmb49.50 - **Target Price**: Rmb60.00 - **Expected Share Price Return**: 21.2% - **Expected Dividend Yield**: 1.7% - **Expected Total Return**: 23.0% - **Market Cap**: Rmb120,249 million (approximately US$16,847 million) [6] Risks and Opportunities - **Downside Risks**: Include worse-than-expected demand for AI-CCL orders, subdued consumption in China, and higher-than-expected capital expenditures on 5G/IoT products [16] - **Upside Risks**: Include securing ASIC-based customers, better macroeconomic conditions in China, and stronger-than-expected AI demand [16] Conclusion - The company is positioned to benefit from rising demand in the AI sector, with significant growth potential from new plant developments and a strategic shift towards high-end AI products. However, it faces risks related to market demand and certification timelines.

Summary of Key Points from the Conference Records Industry Overview - **China A-share Conference 2025**: The conference was held on September 1-2, 2025, featuring over 100 companies across various sectors including technology, consumer, healthcare, new energy, materials, automation, and industrials [1][1][1]. Core Insights - **Market Momentum**: There is a notable increase in client registrations by over 30% year-on-year, indicating strong interest from international investors and wealth management clients [1][1][1]. - **US-China Relations**: The discussion highlighted a cautiously optimistic outlook on US-China relations, focusing on rebuilding ties despite past tensions. Key issues include fentanyl, rare earth exports, technology restrictions, non-tariff barriers, and agricultural purchases [2][2][2]. - **Equity Market Resilience**: Despite increased tariffs, global macro conditions and equity markets have shown resilience. There has been no expected rotation from the US to emerging markets (EM), with strong foreign inflows into the US [3][3][3]. - **Chinese Equities Outlook**: Optimism regarding Chinese equities is supported by improving corporate earnings, inexpensive valuations, and a rebound in market sentiment. The ongoing rally in Chinese equities is expected to continue as investors have not fully re-entered the market [3][3][3]. ETF Market Insights - **Growth of ETFs in China**: The rapid growth in ETF assets under management (AUM) is attributed to the outperformance of passive funds, cost considerations, demand for diversification, and transparent disclosure. Comparisons with other Asian markets reveal different characteristics and growth patterns [4][4][4][6][6][6]. AI and Technology Developments - **AI Investment Opportunities**: The launch of DeepSeek is seen as a significant moment for China's AI landscape, with potential for domestic substitution and overseas supply chain expansion. Investment opportunities are expected in edge AI sectors such as electric vehicles (EV) and consumer electronics [7][7][7]. - **AI Adoption Challenges**: The gap between China and the US in large language models (LLMs) is narrowing, but challenges remain in multimodal AI capabilities and real-world application integration [8][8][8]. Data Center Industry - **Current Upcycle**: The data center industry in China is experiencing an upcycle driven by AI demand, contrasting with previous policy-driven cycles. Challenges include access to advanced chips, software development gaps, and a shortage of AI talent [9][9][9]. Consumer Trends - **Retail Sales Dynamics**: Retail sales have faced pressure post-May, but certain categories like IP toys, personal care, and outdoor gear have outperformed. The cosmetics market is recovering, driven by Gen Z preferences [10][10][10]. Autonomous Driving - **Robotaxi Technology**: China's Robotaxi technology is entering mass production, showing strong commercial potential. However, regulatory challenges and social issues may slow penetration rates compared to other regions like the Middle East [11][11][11]. Risks and Valuation - **Equity Risks**: Risks facing China's equities include a potential hard landing in the property market, capital outflows due to currency depreciation, and slow structural reforms. Excessive stimulus policies could hinder the transition to a consumption-driven economy [13][13][13]. - **Valuation Methods**: Various valuation approaches are used for stocks in Hong Kong and mainland China, including DCF models and relative valuation analysis [12][12][12]. This summary encapsulates the key points discussed during the conference, providing insights into the current state and future outlook of various industries and market dynamics in China.

2 September 2025 | 3:09PM HKT China Industrial Tech 2Q25 wrap: Buoyant outlook in AIDC supply chain; downside surprise from PA; 3 rating changes Our coverage companies all reported 1H25/2Q25 results which look in-line overall while we see the most buoyant 2H25-2026E or even 2027E outlook in the AIDC supply chain (Envicool/Kstar/Kehua/Jianghai/Sungrow/Han's Laser) and the biggest downside surprise coming from process automation players (Baosight 2Q25 revenue/net profit -35%/-63% vs. GSe; and Supcon 2Q25 reve ...

Key Takeaways from the Taipei Computex Industry Overview - The report focuses on the Asia Tech Hardware industry, particularly highlighting developments from the Taipei Computex event held from May 20 to May 23, 2023. Key companies involved include Foxconn (2317 TT), Auras (3324 TT), Lite-on (2301 TT), Lotes (3533 TT), Winway (6515 TT), AVC (3017 TT), and Zhending (4958 TT) [1][1]. Core Insights - **GB300/B300 Display**: The GB300/B300 display was a focal point at the Computex, featuring computing trays with Cordelia interfaces and 20 sets of quick disconnect (NVQD). The GB300 is expected to adopt the Bianca design moving forward [2][2]. - **Component Shipments**: Component shipments for GB300 servers are anticipated to commence in Q3 2025, with limited rack shipments expected in Q4 2025. For the GB200, supply chain bottlenecks have been resolved, potentially increasing rack shipments to 7-8K in Q2 and reaching 10K in Q3 2025 [2][2]. - **Nvidia Collaboration**: Suppliers involved in the Cordelia design, such as Lotes, will continue to work with Nvidia to address issues in the new compute tray design planned for 2026 [2][2]. - **Market Confusion**: Investors expressed confusion regarding similar products from various suppliers at Computex. Inclusion in Nvidia's verified list (NVL) is crucial for securing orders, as CSPs ultimately determine key component suppliers [2][2]. - **Liquid Cooling Solutions**: Delta has gained significant traction among hyperscalers, with liquid cooling revenue expected to exceed NT$20 billion this year. Early entrants like AVC and Delta maintain healthy profitability despite competition [2][2]. Future Trends - **Datacenter Cooling Solutions**: Liquid-to-liquid (L2L) cooling and 800V HVDC are emerging as future solutions for datacenter cooling and power. New datacenters are increasingly adopting L2L solutions, while Nvidia collaborates with suppliers for 800V HVDC to support 1MW server racks by 2027 [2][2]. Investment Ratings - **Quanta Computer Inc (2382.TT)**: Rated Underperform with a target price of NT$240 [5][5]. - **Chroma ATE Inc (2360.TT)**: Rated Outperform with a target price of NT$480 [6][6]. - **Delta Electronics Inc (2308.TT)**: Rated Outperform with a target price of NT$490 [7][7]. - **Unimicron Technology Corp (3037.TT)**: Rated Outperform with a target price of NT$165 [7][7]. - **Luxshare Precision Industry Co Ltd (002475.CH)**: Rated Outperform with a target price of RMB47 [7][7]. Risks and Considerations - **Quanta Computer Inc**: Risks include higher-than-expected demand for AI servers and lower-than-expected demand for AI chips [49][49]. - **Chroma ATE Inc**: Risks include competition in the AI chip market and slower EV penetration [49][49]. - **Delta Electronics Inc**: Risks include competition in AI server power components and potential delays in the recovery of the automation market [55][55]. - **Unimicron Technology Corp**: Risks include weaker-than-expected demand for key products and margin pressures [55][55]. - **Luxshare Precision Industry Co Ltd**: Risks include competition and slower-than-expected market recovery [55][55]. Additional Insights - The report emphasizes the importance of securing orders through Nvidia's verified supplier list and highlights the competitive landscape among suppliers in the Asia Tech Hardware industry [2][2].