Investment Rating - The report maintains an "Accumulate" rating for Dongwei Technology (688700) [1] Core Views - The demand for high-end electroplating equipment is expected to increase due to the CoWoP technology combined with HDI, positioning the company to benefit significantly [7] - The company is well-positioned to capitalize on the growth in HDI electroplating equipment demand, supported by its advanced technology and product offerings [7] Financial Forecasts - Projected total revenue (in million RMB) for 2023A is 909.23, with a decline of 10.13% year-on-year, and is expected to rise to 1,266.38 by 2027E, reflecting a growth of 11.45% [1] - The forecasted net profit attributable to the parent company (in million RMB) is 151.43 for 2023A, with a significant drop of 29.01% year-on-year, expected to recover to 224.36 by 2027E, showing a growth of 21.48% [1] - The latest diluted EPS is projected to be 0.51 for 2023A, increasing to 0.75 by 2027E [1] - The current price-to-earnings ratio (P/E) is 94.25, with future projections of 206.03 for 2024A, decreasing to 63.61 by 2027E [1] Market Data - The closing price of the stock is 47.83 RMB, with a market capitalization of 14,272.54 million RMB [5] - The stock has a price-to-book ratio of 8.15 and a one-year price range of 16.95 to 51.00 RMB [5] Key Technologies and Market Trends - The CoWoP process is emerging as a mainstream packaging technology, simplifying processes and reducing transmission losses, which is crucial for the PCB industry [7] - The MSAP and SAP processes are identified as key technologies for achieving HDI, driving the demand for high-value electroplating equipment [7] - The company’s horizontal electroplating equipment is validated by leading customers, indicating a promising domestic replacement trend [7]

Core Viewpoint - The article discusses the strategic acquisition of Circuit Foil Luxembourg by Defu Technology, highlighting its significance in enhancing Defu's position in the high-end IT copper foil market and its global expansion efforts. Group 1: Acquisition Details - Defu Technology signed a share purchase agreement to acquire 100% of Circuit Foil Luxembourg for approximately €1.74 billion (around ¥14.43 billion) after adjustments [2][3]. - The acquisition is expected to facilitate Defu's entry into the high-end IT copper foil sector, marking a critical milestone in its development [3]. Group 2: Market Context - The demand for high-end PCB copper foil is projected to grow at a CAGR of 10% from 2023 to 2030, with the market size expected to reach ¥36 billion by 2030 [4]. - The high-frequency very low profile (HVLP) copper foil is identified as a key material for PCB high-end applications, essential for maintaining signal integrity in high-speed environments [5]. Group 3: Competitive Landscape - Circuit Foil Luxembourg is recognized as a non-Japanese "invisible champion" in the high-end IT copper foil industry, with a strong technological advantage and a diverse product range [5][6]. - The company has established a significant customer base, including major global PCB manufacturers [6]. Group 4: Strategic Implications - The acquisition is seen as a win-win situation, providing Circuit Foil with Defu's resources for capacity expansion and market development, while Defu gains access to advanced technology and a mature customer network [7]. - Defu Technology is also focusing on high-end copper foil trends, with ongoing collaborations to develop ultra-thin copper foil for advanced packaging substrates [9]. Group 5: Global Expansion Plans - Defu Technology plans to establish a subsidiary in Luxembourg and aims to build production lines and service centers in Europe and Southeast Asia over the next three years [10]. - The company has initiated preparations for a factory in Thailand, supported by stable orders from leading companies in the photovoltaic and consumer battery sectors [10].