Core Viewpoint - The company, Shenghong Technology, aims to become a leader in the AI PCB sector, leveraging its core competencies and strategic initiatives to capitalize on the growing demand driven by AI technology [1] Group 1: Company Information - Shenghong Technology hosted 98 institutional and individual investors from September 2 to 4, 2025, through site visits and conference calls [1] - Key attendees included representatives from Guotai Junan Securities, Dongfang Fuhai, and Dongfang Gangwan, among others [1] - The company's leadership team included Chairman Chen Tao, President Zhao Qixiang, and CFO Zhu Guoqiang [1] Group 2: Core Competencies - The company emphasizes a strategic philosophy of "embracing and moving towards the future" while innovating collaboratively with clients [1] - Technologically, Shenghong has a significant advantage in R&D, manufacturing, and quality, leading the market in mass production technology by 2 to 3 years [1] - The company boasts high product reliability and quality, with comprehensive AI detection coverage [1] - Shenghong's headquarters in Huizhou is the largest single PCB production base globally, with expansion in Thailand and Vietnam to enhance high-end capacity [1] Group 3: Market Demand Trends - The company identifies AI technology as a necessity, with Prismark projecting a compound annual growth rate of approximately 20% for AI PCBs over the next five years [1] - The demand for high-layer and high-density interconnect (HDI) PCBs is expected to surge, particularly in AI-driven sectors such as servers, mobile devices, and autonomous vehicles [1] - Current market conditions indicate high certainty and growth in demand, especially for high-end production capacity, with supply remaining relatively tight [1] Group 4: Capacity Planning and Expansion - To maintain its leading position, Shenghong is continuously expanding its high-end product capacity, including updates to HDI equipment and factory projects in Huizhou, Thailand, and Vietnam [1] - The company's expansion pace is noted to be industry-leading [1] Group 5: Technological Advantages and Achievements - Shenghong holds a leading global market share in AI computing PCBs, with extensive core applications [1] - The company has the capability to mass-produce high-precision circuit boards with over 70 layers and is among the first to achieve large-scale production of 6-layer 24-layer AI computing data center products [1] - Shenghong is advancing the development of 10-layer 30-layer HDI technology, maintaining a competitive edge through deep involvement in major clients' research and development [1]

Group 1: Company Overview and Strategic Positioning - The company has rapidly developed into a leader in the AI PCB sector, leveraging core competitive advantages such as strategic, technical, quality, capacity, and customer advantages [3][4][5][6]. - The company aims to continue innovating and expanding its product offerings in response to the evolving needs of clients, particularly in the AI domain [3][4]. Group 2: Technological and Quality Advantages - The company possesses leading R&D, manufacturing, and quality technologies, allowing it to participate deeply in core customer projects and establish significant technical barriers [3][4]. - The company has achieved a high yield rate for advanced HDI and multilayer products, with AI technology ensuring zero defect production through comprehensive quality control measures [3][4]. Group 3: Capacity and Production Expansion - The company has a global production capacity that includes facilities in Guangdong, Hunan, Thailand, and Malaysia, with its Huizhou headquarters being the largest single-site PCB production base globally [3][4]. - Ongoing expansion projects in Thailand and Vietnam are expected to enhance high-end product capacity, meeting increasing global customer demands [3][4][9]. Group 4: Market Trends and Future Demand - The market is projected to experience a compound annual growth rate (CAGR) of approximately 20% over the next five years, driven by the demand for high-layer and high-end HDI PCBs in AI applications [8]. - The company anticipates a sustained increase in demand for high-end production capabilities, with supply remaining relatively tight [8]. Group 5: Management and Cultural Strengths - The founder and chairman, Chen Tao, is recognized as a technical expert in the PCB industry, leading a skilled management team with international perspectives [5][6]. - The company emphasizes a talent-driven strategy, focusing on attracting and nurturing high-end management and technical talent in core areas like AI computing [5][6]. Group 6: Globalization and Operational Efficiency - The company implements a "China + N" globalization strategy, utilizing AI technology to enhance operations across R&D, production, supply chain, quality control, and logistics [6]. - The establishment of a new generation of industrial internet smart factories has resulted in reduced lead times by 3-5 days and a nearly 50% reduction in labor costs, with a 40% increase in capacity [4][6].

Investment Rating - The report assigns a "Buy" rating for the company, predicting that the stock price will outperform the Shanghai Composite Index by 15% or more within the next six months [37]. Core Insights - The company, Tongyu New Materials, is recognized as a national-level specialized and innovative "little giant" with leading core technology in the industry. Its main business revenue primarily comes from MDI modified epoxy resin, with projected revenues of 1.193 billion CNY, 886 million CNY, and 952 million CNY for 2022, 2023, and 2024 respectively, reflecting growth rates of 25.95%, -25.70%, and 7.47% [1][26]. - The global PCB market is expected to reach nearly 100 billion USD by 2026, with China's rigid copper-clad laminate output increasing from 6.1 billion USD in 2014 to 13.9 billion USD in 2021, capturing 73.9% of the global market share [2][11]. - The company has achieved breakthroughs in multiple core technologies, holding 19 authorized invention patents, and has successfully broken foreign monopolies in key technologies such as DOPO modified epoxy resin [2][29]. Summary by Sections Industry Overview - The electronic resin industry is crucial for producing copper-clad laminates, semiconductors, and printed circuit board inks, with the global rigid copper-clad laminate market experiencing fluctuations due to macroeconomic conditions [10][11]. - China's electronic resin production has significant room for growth, particularly in high-performance specialty resins that meet environmental standards [14][19]. Company Profile - Tongyu New Materials focuses on the R&D, production, and sales of electronic resins, positioning itself as a leading supplier in the domestic high-end copper-clad laminate market. The company has developed a mature product system suitable for lead-free and halogen-free applications [20][25]. - The company’s revenue sources are diversified across five major product categories, with MDI modified epoxy resin consistently being the core revenue driver, accounting for over 30% of total revenue [26][29]. Financial Performance - The company reported revenues of 1.193 billion CNY in 2022, with a net profit of 188 million CNY, and forecasts a decline in net profit to 144 million CNY in 2024 [26][30]. - In the first half of 2025, the company achieved a revenue of 517 million CNY, a year-on-year increase of 19.98%, while net profit decreased by 11.81% [26][30]. Competitive Advantages - The company has established a strong market presence and technical capabilities, being recognized as a major supplier in the domestic high-end electronic resin market, with products integrated into the supply chains of leading companies like Kingboard Group and Unimicron Technology [3][29]. - The company operates automated production lines, ensuring stable production quality and rapid delivery, while also focusing on environmental compliance and sustainable development [30].

Core Viewpoint - Thailand is rapidly becoming a significant hub for PCB manufacturing, driven by the demand from the AI supply chain and investments from major companies, particularly from China and Taiwan [5][6][7]. Group 1: Industry Expansion - Victory Giant Technology (VGT) is expected to order approximately 100 new machines to expand its capacity in Thailand and Vietnam [2]. - Nearly 60 PCB manufacturers from mainland China and Taiwan have established new production bases in Thailand within three years, including major players like Unimicron and Zhen Ding [6][7]. - The Thai PCB industry is projected to grow from $3.5 billion in 2024 to $5.62 billion by 2030, with a compound annual growth rate of 7.6%, surpassing the global average [12]. Group 2: Investment and Market Dynamics - Nvidia's acquisition of a PCB factory in Thailand marks a significant investment in the region, with the factory set to begin operations soon [2]. - The geopolitical tensions between Washington and Beijing are accelerating the trend of supply chain diversification, prompting global tech giants to look beyond China for assembly and key components [6][7]. - Despite the influx of new investments, the Thai PCB ecosystem remains immature, with many necessary materials and equipment still needing to be imported [14]. Group 3: Challenges and Workforce Issues - There is a significant cultural gap between local Thai workers and incoming PCB manufacturers from China and Taiwan, affecting operational efficiency [10]. - The demand for engineers in the PCB sector is high, particularly for those who can speak Chinese, leading to a competitive talent market [11]. - Experienced production line managers' salaries have doubled in the past two to three years, reflecting the intense competition for skilled labor [11]. Group 4: Future Outlook - The expansion of PCB manufacturing in Thailand is seen as a critical component of companies' capital expenditures aimed at capturing the growing demand related to AI [9]. - However, uncertainties in non-AI market demand and potential impacts from U.S. tariff policies pose risks to the sustainability of this growth [15].

Core Viewpoint - Shenghong Technology (300476.SZ) has seen its market capitalization double within 56 trading days, driven by a surge in AI demand, with its stock price increasing over 572% this year, reaching a peak of 293.6 yuan and a market cap of approximately 233.3 billion yuan [2][4]. Group 1: Financial Performance - Shenghong Technology's revenue is expected to exceed 10 billion yuan for the first time in 2024, with a year-on-year increase of 35.3%, and net profit expected to grow by 71.9% [5]. - For the first half of 2025, the company reported revenue of 9.031 billion yuan, a year-on-year increase of 86.0%, and a net profit of 2.143 billion yuan, a staggering increase of 366.89% [5][7]. - The revenue growth is attributed to the large-scale shipment of high-end PCB products related to AI and an optimized product mix, with multi-layer boards (MLPCB) contributing 61.73 billion yuan, accounting for 57.5% of total revenue in 2024 [5][7]. Group 2: IPO and Fundraising - Shenghong Technology has submitted its prospectus to the Hong Kong Stock Exchange for an IPO, aiming to raise approximately 1 billion USD, which would make it one of the largest PCB fundraising efforts in recent years [4]. - The funds raised will primarily be used for capacity expansion and technology research and development, with a total financing target of about 9 billion yuan if both the IPO and a previous private placement are successful [4]. Group 3: Market Position and Client Base - The company has become a key supplier for NVIDIA, with over 70% of its orders linked to NVIDIA-related products, capturing about 50% of the global market for PCB used in NVIDIA's data centers [11][12]. - Shenghong Technology's client base includes major companies such as Foxconn, Gigabyte, Hikvision, and Xiaomi, with a significant portion of its revenue now coming from overseas markets, which accounted for 78.4% of its main revenue in the first quarter of 2025 [12][13]. Group 4: Management and Strategic Development - The company's growth is attributed to its founder, Chen Tao, who has strategically positioned Shenghong Technology in the high-density interconnect (HDI) PCB market, which is crucial for AI applications [10][11]. - The establishment of the HDI division in 2019 has allowed Shenghong Technology to meet the increasing demands of AI hardware, leading to its recognition as a core supplier for NVIDIA [10][11]. Group 5: Industry Outlook - The global PCB market is projected to grow, with an estimated value of approximately 73.57 billion USD in 2024, reflecting a year-on-year increase of 5.8%, and expected to reach 94.66 billion USD by 2029 [16]. - Government initiatives to promote domestic production of high-end PCBs and investments in digital infrastructure are expected to benefit companies like Shenghong Technology [16].

Core Viewpoint - The company reported significant growth in its financial performance for the first half of 2025, driven by advancements in AI technology and a strong global market demand for high-density interconnect (HDI) products [1][2][3]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 9.031 billion yuan, a year-on-year increase of 86.00%. The net profit attributable to shareholders reached 2.143 billion yuan, up 366.89%, while the net profit after deducting non-recurring items was 2.149 billion yuan, also reflecting a growth of 365.69% [1]. - For the second quarter of 2025, the company reported operating revenue of 4.719 billion yuan, a year-on-year increase of 91.51% and a quarter-on-quarter increase of 9.42%. The net profit attributable to shareholders was 1.222 billion yuan, up 390.14% year-on-year and 32.78% quarter-on-quarter [1]. Market Opportunities - The company is capitalizing on the growing AI market, with the global HDI market expected to grow at a compound annual growth rate (CAGR) of 6.4% from 2024 to 2029. AI server-related HDI is projected to grow at a CAGR of 19.1%, significantly outpacing the overall PCB industry's expected CAGR of 5.2% [2]. - The company has established strategic partnerships with leading global technology firms, enhancing its product offerings in AI computing and data center solutions [2]. Technological Advancements - The company has solidified its position as a leader in the PCB industry by achieving manufacturing capabilities for high-layer boards exceeding 100 layers and being among the first to mass-produce advanced HDI products [3]. - The company increased its R&D investment by 78.46% year-on-year, which is crucial for maintaining its competitive edge in the industry [3]. Global Strategy - The company is implementing a "China + N" global layout strategy to enhance its supply delivery capabilities, establishing production lines in Thailand and Vietnam to meet the overseas demand for high-layer PCBs and advanced HDI products [4]. - This strategy aims to build trust with major clients amid increasing competition and international trade tensions [4]. Profit Forecast - Based on the company's half-year report, revenue forecasts for 2025-2027 have been revised upwards, with expected revenues of 20.348 billion yuan, 27.282 billion yuan, and 32.656 billion yuan, representing year-on-year growth rates of 89.6%, 34.1%, and 19.7% respectively [5]. - The expected earnings per share (EPS) for 2025-2027 are projected to be 5.94 yuan, 8.38 yuan, and 10.15 yuan, reflecting a strong growth trajectory [5].

Core Viewpoint - Shenghong Technology (300476) has received approval from the China Securities Regulatory Commission for its recent private placement, indicating strong growth potential in the AI PCB market, which is characterized by high certainty and demand for high-end products [1][4]. Financial Performance - In the first half of the year, Shenghong Technology achieved operating revenue of 9.031 billion yuan, a year-on-year increase of 86%; net profit attributable to shareholders reached 2.143 billion yuan, up 366.89% [2]. - The significant growth in performance is attributed to seizing opportunities in AI computing power development, optimizing product structure, and strengthening technical barriers [2]. Market Demand and Supply - The demand for AI PCBs is high and growing, with trends focusing on reducing energy consumption per unit of computing power and enhancing performance capabilities [2]. - Despite increasing demand for high-end capacity, the supply of high-end products remains relatively tight, prompting the company to consider factors such as order scale and profitability in capacity allocation [4]. Technological Advancements - Shenghong Technology has made significant breakthroughs in core technologies, including the ability to manufacture high multilayer boards and advanced HDI products, positioning itself as a leader in the global market [3]. - The company is also accelerating the development of next-generation products to support cutting-edge AI applications and autonomous driving platforms [3]. Expansion Plans - The company plans to raise no more than 1.9 billion yuan through private placement to fund projects in Vietnam and Thailand, as well as to supplement working capital and repay bank loans [4]. - The Thai factory has completed its first phase of upgrades and is expected to improve product structure significantly in the second half of the year, with profitability anticipated to increase [4]. Profitability and Margins - Shenghong Technology's gross margin has significantly improved, reaching 36.22%, an increase of 15.62 percentage points year-on-year, while net margin stands at 23.73%, up 14.28 percentage points [5]. - The company expects further enhancements in profitability due to improved yield rates and ongoing upgrades in processes and materials [5].

Group 1: Company Performance Overview - In the first half of 2025, the company achieved a revenue of 9.031 billion CNY, representing a year-on-year growth of 86.00% [3] - The total profit reached 2.454 billion CNY, with a year-on-year increase of 371.46% [3] - The net profit attributable to shareholders was 2.143 billion CNY, showing a year-on-year growth of 366.89% [3] - Gross margin improved to 36.22%, up from the previous year, while net margin increased to 23.73%, reflecting a rise of 15.62 percentage points [3] Group 2: Strategic Initiatives - The company is focusing on AI and data center products, optimizing its product structure to capture opportunities in the AI computing market [3] - It has strengthened its technological barriers, becoming one of the first companies to achieve large-scale production of 6-layer 24-layer HDI products [4] - The "China + N" globalization strategy is being implemented to enhance supply delivery capabilities, with investments in production lines in Thailand and Vietnam [4] Group 3: Cost Management and Efficiency - A digital intelligent operation platform has been established to improve decision-making and optimize production processes, leading to enhanced overall production efficiency [4] - Continuous cost management efforts are in place to control expenditures and improve operational efficiency [4] Group 4: Market Demand and Future Outlook - The market demand for AI PCBs is expected to grow significantly, driven by the need for higher performance and lower energy consumption [6] - The company anticipates that the supply of high-end products will remain tight, with ongoing investments in R&D to adapt to market needs [6] - Future improvements in yield rates are expected to enhance profitability, with a focus on selecting orders that offer better profit margins [8] Group 5: Investor Engagement - The investor relations activities included meetings with approximately 880 institutional and individual investors, showcasing the company's commitment to transparency and communication [1] - The event took place from August 27 to August 29, 2025, in an online format as well as in Shenzhen and Shanghai [1]

Core Viewpoint - The report from Guosheng Securities highlights that Shenghong Technology achieved a significant increase in net profit attributable to shareholders, reaching 2.143 billion yuan in H1 2025, representing a year-on-year growth of 366.89% [1] Financial Performance - In Q2 2025, the company reported a net profit attributable to shareholders of 1.22 billion yuan, which is a year-on-year increase of 390.1% and a quarter-on-quarter increase of 32.8% [1] Business Strategy and Market Position - The substantial improvement in the company's performance and profitability is attributed to its strategic grasp of the AI computing power technology revolution and the data center upgrade wave, which has created historical opportunities [1] - The company has rapidly implemented product layouts in AI computing power and data center sectors, achieving large-scale production and continuous optimization of its product structure [1] Future Outlook - Guosheng Securities is optimistic about the company as a leader in AI PCB, believing it can deeply capitalize on the development opportunities brought by the AI wave [1] - The revenue forecasts for 2026 and 2027 have been raised to 34.8 billion yuan and 54.8 billion yuan, respectively, while the net profit forecasts for the same years have been adjusted to 11 billion yuan and 18 billion yuan [1] - The firm maintains a "buy" rating on the company [1]

Core Viewpoint - Shenghong Technology has demonstrated explosive growth in the first half of 2025, with revenue increasing by 86% and net profit soaring by 3.7 times, showcasing the "flywheel effect" of a leading PCB company in the AI wave [1] Group 1: Financial Performance - The company's revenue reached 9.031 billion yuan, a year-on-year increase of 86.00%, while net profit was 2.143 billion yuan, reflecting a staggering growth of 366.89% [1] - The gross profit margin improved to 36.25%, indicating a significant enhancement in profitability [1] - Operating cash flow increased by 81.86% to 1.190 billion yuan, demonstrating strong cash generation capabilities [1][2] Group 2: Business Strategy and Operations - Shenghong Technology is experiencing a rare "technology dividend" period, having achieved breakthroughs in manufacturing capabilities for high-layer boards and HDI products, which align with the stringent requirements of AI computing chips [1] - The substantial increase in gross margin is attributed to product structure optimization and enhanced cost control through refined management [2] - The company is undergoing rapid expansion, with R&D expenses rising by 78.46% to 353 million yuan, indicating significant investment in next-generation technologies [2] Group 3: Global Expansion and Risks - The establishment of production lines in Thailand and Vietnam aims to mitigate trade friction risks and better serve global customers, although operational risks associated with overseas factories are notable [2] - Capital expenditures have surged, with construction in progress increasing to 906 million yuan, reflecting the company's commitment to expansion [2] - The net inflow of financing cash flow reached 1.111 billion yuan, indicating the company is securing funding through various channels [2] Group 4: Market Position and Future Outlook - Shenghong Technology has solidified its position in the top tier of global PCB manufacturers, but maintaining its technological advantage in the rapidly changing AI sector requires ongoing R&D investment and market insight [3] - Continuous high R&D investment is yielding returns at this critical juncture, but sustained technological innovation is essential to uphold competitive advantages [3]