Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [5]. Core Insights - The company is expected to benefit significantly from the AI-driven demand for high-layer and high-density interconnect (HDI) printed circuit boards (PCBs), with projected revenue growth rates of 59.8%, 50.4%, and 32.7% for 2025, 2026, and 2027 respectively [5]. - The company is the largest manufacturer of PCB-specific equipment globally, holding approximately 6.5% of the global market share and 10.1% of the domestic market share [5]. - The global PCB equipment market is projected to grow from approximately $7.1 billion in 2024 to $10.8 billion by 2029, with a compound annual growth rate (CAGR) of 8.7% [5]. Financial Data and Profit Forecast - Total revenue is forecasted to reach 53.42 billion yuan in 2025, with a year-on-year growth of 59.8% [4]. - The net profit attributable to the parent company is expected to be 7.74 billion yuan in 2025, reflecting a year-on-year increase of 156.9% [4]. - The gross profit margin is projected to improve from 28.4% in 2024 to 33.8% in 2027 [5]. - The earnings per share (EPS) is anticipated to rise from 0.71 yuan in 2024 to 1.82 yuan in 2025 [4]. Industry and Company Situation - The report highlights that the demand for high-end drilling and laser equipment is expected to increase due to the expansion of AI-driven high-layer and HDI production capacities [5]. - The company’s core business in drilling equipment is projected to see revenue growth of 69.2%, 62.3%, and 37.4% from 2025 to 2027 [5]. - The report emphasizes that the growth of platform-type equipment manufacturers is driven by the increasing penetration of high-speed materials and the rising requirements for high aspect ratio and back-drilling precision [5].

Investment Rating - The report recommends a positive investment outlook for the PCB industry, particularly highlighting the drilling equipment and consumables sectors as key beneficiaries of the ongoing upgrades and miniaturization trends in PCB technology [7]. Core Insights - The demand for drilling equipment and consumables is expected to rise due to the increasing complexity and density of PCBs driven by AI computing power requirements [3][6]. - The transition from traditional copper cable connections to PCB connections in high-density server architectures, such as NVIDIA's Rubin architecture, is anticipated to further boost PCB demand [21][25]. - The report emphasizes that the drilling segment is the most advantageous area within PCB production, with specific recommendations for leading domestic companies in drilling equipment and consumables [7]. Summary by Sections AI Computing Power and PCB Demand - AI servers utilize advanced PCB designs, such as HDI boards, to meet high-density interconnection requirements, with specific architectures like GB200 and GB300 showcasing the need for increased layer counts and miniaturized features [4][13]. - The report notes that the shift to the Rubin architecture will necessitate further PCB innovations, including the introduction of orthogonal backplanes to replace traditional copper connections [19][29]. Beneficial Segments in PCB Production - The drilling equipment sector is highlighted as the most benefited segment, with domestic manufacturers like Dazhu CNC leading the market due to their cost-effective solutions and improved production efficiency [6][57]. - The report identifies the increasing complexity of PCB designs, particularly in high-layer HDI boards, as a driver for enhanced drilling technology and higher demand for specialized drilling consumables [5][34]. Investment Recommendations - The report recommends focusing on leading domestic companies in the drilling equipment sector, specifically Dazhu CNC, and in the drilling consumables sector, particularly Ding Tai High-Tech, while also suggesting to keep an eye on Zhongtung High-Tech [7][76][81].

Market Overview - The Hong Kong stock market opened higher on December 11, with the Hang Seng Index rising by 0.66% to 25,710.61 points, the Hang Seng Tech Index up by 0.55% to 5,611.93 points, the National Enterprises Index increasing by 0.58% to 9,006.27 points, and the Red Chip Index gaining 0.53% to 4,140.41 points [1] Company News - Sunny Optical Technology (02382.HK) reported a mobile lens shipment of approximately 119 million units in November, a month-on-month decrease of 2.3% but a year-on-year increase of 7.5%. The automotive lens shipment was 12.634 million units, reflecting a month-on-month growth of 3.4% and a year-on-year increase of 69.4% [2] - Q Technology (01478.HK) saw its mobile camera module sales reach 38.053 million units in November, down 13.6% month-on-month and 5.6% year-on-year. The total sales of camera modules were 41.755 million units, a month-on-month decrease of 11.9% but a year-on-year increase of 0.4% [2] - Yue Yuen Industrial Holdings (00551.HK) reported a net operating income of approximately $660 million in November, a year-on-year decrease of 3.1%. The cumulative net operating income for the first 11 months was approximately $7.382 billion, down 1.6% year-on-year [2] - Baoshan International (03813.HK) reported a net operating income of 1.172 billion yuan in November, a year-on-year decline of 5.1% [3] - Morningstar Technology (02000.HK) reported an unaudited revenue of 44.3 million HKD in November, reflecting a month-on-month increase of 48.4% and a year-on-year increase of 19.73% [4] - Oceanwide Holdings (03377.HK) reported a cumulative contract sales amount of approximately 23.79 billion yuan for the first 11 months [5] - Jianye Real Estate (00832.HK) reported a total property contract sales amount of 7.168 billion yuan for the first 11 months, a year-on-year decrease of 16.3% [6] - Yuzhou Group (01628.HK) reported a cumulative sales amount of 6.196 billion yuan for the first 11 months [7] - COFCO Joycome (01610.HK) reported a pig slaughter volume of 559,000 heads in November, a month-on-month decrease of 4.44% [8] - CSPC Pharmaceutical Group (01093.HK) received clinical trial approval in the U.S. for its fully human anti-ACTRIIA/IIB monoclonal antibody (JMT206) [9] - China Digital Technology (01796.HK) entered into a strategic cooperation agreement with Xinhua Pharmaceutical [10] - China Hongqiao (01378.HK) announced that the acquisition of Hongtu Industrial by Hongchuang Holdings has been approved by the Shenzhen Stock Exchange's M&A and Restructuring Review Committee [11] - CICC (03908.HK) plans to issue perpetual subordinated bonds not exceeding 3 billion yuan [12] Institutional Insights - Bank of China International noted that despite recent market volatility, investors should maintain composure, as adjustments in a bull market are normal. The short-term fluctuations do not alter the upward trend of the Hong Kong stock market [13] - Haitong International indicated that following last week's market fluctuations, the market is expected to continue its rebound this week, driven by rising policy expectations, although the strength of the rebound will depend on the implementation of policies and potential interest rate cuts by the Federal Reserve [13] - Citigroup observed that luxury retail landlords in mainland China are upgrading tenant mixes, with strong growth in high-end and luxury shopping centers continuing into October and November, attributed to low base effects, strong capital markets, and the introduction of new stores [13] - CITIC Securities highlighted that with the demand for orthogonal backplanes and Cowop process upgrades, PCBs will increasingly resemble semiconductors, leading to a steady increase in value. The demand for high-quality materials will rise as companies like Amazon, META, and Google require more advanced PCB materials [14]