Core Viewpoint - The company reported a solid financial performance for the first three quarters of the year, with revenue of 26.86 billion yuan, a year-on-year increase of 14.3%, and a net profit attributable to shareholders of 2.41 billion yuan, up 21.9% year-on-year, indicating strong growth in both revenue and profit [1] Financial Performance Summary - In Q3, the company achieved revenue of 10.48 billion yuan, a year-on-year increase of 1.2% and a quarter-on-quarter increase of 26.4% [1] - The net profit attributable to shareholders in Q3 was 1.17 billion yuan, down 1.3% year-on-year but up 57.7% quarter-on-quarter [1] - The gross margin for Q3 was 23.1%, a decrease of 0.5 percentage points year-on-year but an increase of 2.8 percentage points quarter-on-quarter [1] - The net profit margin for Q3 was 11.1%, down 0.4 percentage points year-on-year but up 2.2 percentage points quarter-on-quarter [1] Acquisition and Strategic Moves - The company announced a cash acquisition and capital increase of 357 million yuan for Wuxi Huayang Technology, which will result in a 53.68% stake in the company [1] - Wuxi Huayang Technology specializes in the production of vehicle-mounted modules and the research and development of sensors, enhancing the company's competitiveness in the automotive electronics sector [2] - The acquisition is expected to strengthen the company's capabilities in advanced processes and system integration in automotive PCB applications [2] Market Outlook - The company anticipates a recovery in profits in Q4, driven by strong sales of major clients and increased orders in the supply chain [2] - The company is also expanding its AI-PCB high-end capacity, with successful certification from key clients, which is expected to contribute to future revenue growth [2] - The period from 2025 to 2027 is projected to be a significant innovation phase for major clients, with new product developments expected to drive demand and technological advancements [3]

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [1]. Core Insights - The company reported a significant increase in performance for Q2 2025, with revenue reaching 8.29 billion, a year-on-year increase of 28.7%, and a net profit of 745 million, up 159.6% year-on-year [5]. - The company has revised its AI PCB capital expenditure (Capex) upwards, aiming to accelerate capacity expansion and customer integration in the TMT and small-cap/electronic sectors [1][5]. - The company is well-positioned to benefit from the ongoing hardware innovations and AI integration trends, particularly with major clients expected to drive demand for new products [5]. Financial Performance - For H1 2025, the company reported revenue of 16.38 billion, a year-on-year increase of 24.75%, and a net profit of 1.23 billion, up 57.2% year-on-year [1]. - The gross margin improved to 19.1%, an increase of 1.1 percentage points year-on-year, while the net margin reached 7.5%, up 1.5 percentage points year-on-year [1]. - The company’s revenue for 2025 is projected to be 42.17 billion, with a net profit of 4.50 billion, corresponding to an EPS of 1.94 [10][13]. Business Structure Analysis - Revenue from communication boards was 10.27 billion, a year-on-year increase of 17.6%, while consumer electronics and computer boards generated 5.17 billion, up 31.6% year-on-year [5]. - The automotive and server segments saw revenue of 810 million, a significant year-on-year increase of 87.4% [5]. - The company has established strong capabilities in AI PCB technology, particularly in high-density interconnect (HDI) and substrate-like PCB (SLP) products, with successful entry into the 800G/1.6T optical module market [5]. Future Outlook - The company has increased its AI PCB Capex to over 30 billion New Taiwan dollars (approximately 7-9 billion RMB) for 2025-2026, with nearly 50% allocated for expanding high-end HDI and high-layer count (HLC) capacity [5]. - The company is actively expanding its production capabilities in Thailand and Kaohsiung to meet future demand for high-end products [5]. - The report emphasizes a positive long-term outlook driven by hardware innovations and AI integration, with significant growth expected in the AI-related product segments [5].