Core Viewpoint - The demand for PCB products in the electric vehicle sector is evolving towards high performance, high reliability, and system integration, necessitating improvements in insulation performance, voltage rating, and current-carrying capacity [1] Company Developments - The company is leveraging its long-term technological accumulation to actively develop new products, including layered rigid-flex boards, high-precision embedded component circuit boards, and embedded copper boards [1]

Core Viewpoint - Jiangsu Benchuan Intelligent Circuit Technology Co., Ltd. has responded to the Shenzhen Stock Exchange's inquiry regarding its application for issuing convertible bonds, detailing its operational status and fundraising projects [1][2]. Financial Performance - The company's operating revenue for the reporting period was 559.26 million, 510.94 million, 596.10 million, and 170.49 million, with net profits (after deducting non-recurring gains and losses) of 34.05 million, -6.74 million, 16.97 million, and 9.04 million respectively, indicating significant performance fluctuations [1]. - In 2023, the company experienced declines in both operating revenue and net profit due to macroeconomic downturns and reduced downstream market demand, while a recovery is expected in 2024 [1]. Business Composition - The main business of the company is the sale of customized printed circuit boards, which accounted for over 90% of total operating revenue during the reporting period [2]. - Export sales are a significant revenue source, comprising 57.37%, 52.13%, 48.39%, and 50.78% of main business revenue, primarily to the United States and Europe [2]. - The company has a high capacity utilization rate and outsources production when orders increase, with outsourced processing costs constituting a notable portion of main business costs [2]. Fundraising Projects - The proposed convertible bond issuance aims to raise no more than 49 million for projects including the construction of a production facility for smart circuit products in Zhuhai and a PCB production base in Thailand, as well as to supplement working capital [2]. - The Zhuhai project is expected to produce multilayer boards with a projected gross margin of 24.70%-24.81% and a post-tax internal rate of return of 14.07% [2]. - The Thailand project will focus on producing double-sided and multilayer PCBs, with an expected capacity of 250,000 square meters and a projected gross margin of 18.73%-18.82% and a post-tax internal rate of return of 13.80% [2]. Project Justification - The fundraising projects are closely related to the main business and do not involve new products or services, aiming to enhance overseas order response capabilities and diversify the supply chain [3]. - The company has experience in overseas investments and maintains a supply chain that does not rely on a single or few customers, mitigating risks from international trade environment changes [3]. - Previous fundraising project adjustments were justified, and the company has developed measures to address potential capacity absorption risks associated with new projects [3].

Group 1 - In 2024, Jiangsu Benchuan Intelligent Circuit Technology Co., Ltd. signed a partnership agreement with professional investment institutions to establish Shenzhen Baoteng Fushun Venture Capital Fund Partnership [1] - All partners committed a total investment of 150 million yuan, with Benchuan Intelligent contributing 30 million yuan, accounting for 20% of the total [1] - As of the announcement date on September 23, 2025, Baoteng Fushun completed its second phase of funding, raising 45 million yuan, with Benchuan Intelligent contributing 9 million yuan in this phase [1] Group 2 - The company stated its intention to understand the fund's operations, supervise risk prevention, and ensure the safety of funds [1] - The company will disclose subsequent developments in accordance with regulations and remind investors to pay attention to risks [1]

Group 1 - The company has commenced mass production supply of its AI glasses products for a major overseas client [1][2] - In the AI server sector, the company has achieved mass production of 28-layer AI server circuit boards, 24-layer ultra-low loss servers, and 5G communication PCBs [2] - The company has entered the high-speed connector and power module fields through ODM manufacturers and has completed certification for all AMD products [2] Group 2 - The company is providing products to major computing power center clients in Europe [2] - In the first half of 2025, the company secured a new product project with humanoid robot client F, entering the mass production preparation phase [2] - The company is actively advancing collaborations with leading domestic humanoid robot clients to obtain new generation humanoid robot project designations through client certifications [2]

Financial Performance - In the first half of 2025, the company achieved operating revenue of 2.05 billion yuan, a year-on-year increase of 3.97% [2][3] - The net profit attributable to shareholders was 70.48 million yuan, up 0.76% compared to the same period last year [2][3] - The net profit after deducting non-recurring gains and losses reached 73.00 million yuan, showing a significant increase of 5728.58% year-on-year [2][3] Operational Highlights - The company produced 27.97 million pieces of various copper-clad laminates, an increase of 8.07% year-on-year, and sold 27.41 million pieces, up 5.35% year-on-year [4] - The revenue from the copper-clad laminate segment was 1.87 billion yuan, reflecting a 6.81% increase compared to the previous year [4] - The company focused on optimizing product structure, enhancing product research and development, and improving production efficiency through automation [4] Market Conditions - The improvement in performance was attributed to a better market condition for copper-clad laminates, with increased production and slight recovery in sales prices [2][4] - In the healthcare segment, the revenue from subsidiaries was 75.71 million yuan, a decrease of 13.91% year-on-year, due to a decline in the traditional Chinese medicine market and intense industry competition [4] - The company is responding to market challenges by enhancing management, increasing market development efforts, and diversifying product offerings [4]

Summary of Conference Call Notes Company and Industry Overview - The company operates in the Low DK glass fiber sector and has achieved breakthroughs in production and certification, with mass production expected by the end of September 2025, starting with an initial capacity of 500 tons per year at a price of 200,000 RMB per ton, significantly higher than ordinary glass fiber yarn [2][3][4]. Key Points and Arguments - **Production Capacity Expansion**: The company plans to add three oil furnaces by 2026, totaling 1,500 tons of capacity, including both first and second-generation Low DK glass fiber, with the second-generation product expected to reach 600,000 RMB per ton [2][3][5]. - **High Demand for HDI PCB**: Orders for high-end HDI PCBs are booked until June 2026, with automotive orders accounting for 58% and home appliances for 15-16% of total orders in the first half of 2025, indicating strong market demand [2][5][9]. - **Global PCB Market Growth**: The global PCB market value reached over 70 billion USD in 2025, growing by over 10% year-on-year, and is projected to exceed 90 billion USD by 2029, driven by advancements in 5G/5.5G/6G technologies and AI-related demand [2][5][9]. - **Monthly Shipment Goals**: The company aims to maintain monthly shipments of 9.5 to 10 million copper-clad laminates in the second half of the year, despite a total capacity of 11 million, due to an increase in the proportion of high-end special products [2][6][9]. - **Price Adjustments**: The company has implemented two price adjustments in March and August, approximately 10% and 10 USD per unit respectively, which are expected to improve gross margins in the second half of the year, targeting a gross margin exceeding 20% [4][7][8]. Additional Important Information - **Production Bottlenecks**: The current global production capacity for Low DK glass fiber is only 8,800 tons, primarily concentrated among a few companies in Japan and China, which limits the production of high-end products like HDI PCBs [3][5]. - **Future Product Development**: The company is developing M6 and M7 panels, with plans to launch M8 and M9 in 2026, but significant profits from these products are not expected until 2027 or 2028 due to the need for extensive testing and customer certification [6][9]. - **Customer Feedback**: Positive feedback has been received from customers regarding the Low DK glass fiber, with some key clients insisting on its use for their products [10][11]. - **CPE Fabric Production**: The company plans to produce 2.5 million meters of CPE fabric monthly, with an annual capacity of 30 million meters based on current production capabilities [12]. - **Resin Business Development**: The company is focusing on high-end markets for resin products, particularly in bulletproof glass applications, and is developing hybrid display technology with promising prospects [21][22]. This summary encapsulates the key insights from the conference call, highlighting the company's strategic initiatives, market dynamics, and future growth potential in the Low DK glass fiber and PCB sectors.

Core Viewpoint - The company demonstrated strong operational resilience and strategic execution by achieving double growth in revenue and net profit despite a complex macroeconomic environment [1] Financial Performance - For the first half of 2025, the company reported revenue of 541 million yuan, a year-on-year increase of 16.40% - The net profit attributable to shareholders was 64.77 million yuan, reflecting a year-on-year growth of 7.56% - The company maintained a stable gross margin despite challenges such as rising precious metal prices and capacity constraints, thanks to product structure optimization and overseas market expansion [2] Product and Market Optimization - Revenue from double-sided and multi-layer boards saw significant growth, with year-on-year increases of 28.37% and 25.36% respectively - The company successfully expanded its overseas business, achieving a remarkable 100% year-on-year growth in foreign income, aided by the establishment of a subsidiary in Thailand [3] Research and Development - The company invested 20.93 million yuan in R&D during the reporting period, marking a 9.92% increase - Ongoing projects focus on advanced fields such as optical module products and thick copper plate technology, enhancing the company's core competitiveness [4] Financial Management - The company effectively utilized idle fundraising, with a cash management balance of 175 million yuan - The net cash flow from operating activities was 78.51 million yuan, indicating a healthy financial status to support daily operations and investment needs [5] Future Outlook - The company plans to continue focusing on traditional sectors like consumer electronics and automotive electronics while exploring emerging markets such as smart home technology and artificial intelligence - The construction of new facilities is expected to enhance production capacity and support long-term growth, positioning the company for broader development opportunities in the second half of 2025 and beyond [6]

Investment Rating - The report maintains a "Recommended" rating for the company, with an expected growth in net profit of 57%/34%/10% for the years 2025 to 2027, respectively [5]. Core Insights - The company reported a significant increase in revenue and net profit for the first half of 2025, with revenue reaching 10.453 billion yuan, a year-on-year increase of 25.63%, and net profit attributable to shareholders of 1.36 billion yuan, up 37.75% year-on-year [5]. - The demand for PCB related to computing power is identified as a key driver for growth, particularly in the data center and automotive sectors [5]. - The company is actively expanding its production capacity, with ongoing projects in Thailand and Nantong [5]. Financial Performance Summary - In Q2 2025, the company achieved a revenue of 5.671 billion yuan, representing a 30.06% year-on-year growth, and a net profit of 869 million yuan, up 42.92% year-on-year [5]. - The PCB business generated 6.274 billion yuan in revenue for H1 2025, a 29.21% increase, accounting for 60.02% of total revenue [5]. - The gross margin for the PCB business improved to 34.42%, an increase of 3.05 percentage points year-on-year [5]. Business Segment Analysis - The packaging substrate segment achieved revenue of 1.74 billion yuan in H1 2025, a 9.03% increase, but faced a decline in gross margin to 15.15% due to rising raw material costs [5]. - The electronic assembly business reported revenue of 1.478 billion yuan, a 22.06% increase, with a focus on data centers and automotive electronics [5]. Future Projections - The company expects to see continued growth in net profit, with projections of 2.956 billion yuan for 2025, 3.966 billion yuan for 2026, and 4.348 billion yuan for 2027 [6]. - The projected EPS for the same years is 4.43 yuan, 5.95 yuan, and 6.52 yuan, respectively, with corresponding PE ratios of 38, 29, and 26 times [6].

Group 1 - Sichuan Yingchuangli Electronics Technology Co., Ltd. plans to develop a universal Mahjong machine control board, expecting an annual order increase of 3 million sets after successful development [1] - The company has recently established cooperation with local enterprises in Suining, marking a shift from previously relying on external partners [1] - The local manufacturing industry in Suining is promoting collaborative product chain support, integrating various enterprises into a local network [1] Group 2 - Sichuan Jianghuai Automobile Co., Ltd. has achieved a sales volume of over 9,600 units for its "Junling" product by sourcing 20% of its components locally, significantly reducing logistics costs [2] - The logistics cost savings from local sourcing amount to approximately 30 to 40 million yuan annually, translating into a 5% reduction in sales prices for local customers [2][3] - Local partnerships have led to increased efficiency and reduced inventory costs for companies like Sichuan Hai Zi Food Co., Ltd., which now sources 80% of its upstream suppliers locally [4] Group 3 - The local government is facilitating connections between businesses to enhance collaboration and support local supply chains [5] - A "one enterprise, one specialist" service mechanism has been established to improve understanding of local industrial structures and facilitate supply-demand matching [6] - The "Suining Cloud" platform has been launched to provide real-time supply-demand information and facilitate online negotiations, with over 9,276 enterprises registered [6] Group 4 - Suining has allocated 20 million yuan annually to incentivize local sourcing, resulting in a transaction volume of 8.432 billion yuan from 47 events held in the first seven months of the year [7] - The city is also working on establishing a regular industrial collaboration mechanism with neighboring regions like Chengdu and Chongqing to enhance the depth and breadth of industrial cooperation [7]

Company and Industry Summary Company Overview - The company reported total revenue of 2.58 billion RMB for the first half of 2025, representing a year-on-year growth of 7.64% [2] - Net profit attributable to shareholders reached 384 million RMB, with a growth exceeding 20% [2] - Operating cash flow surpassed net profit, increasing by 30%, indicating robust growth [2] Industry and Market Position - The company has entered the AI supply chain of NVIDIA and AMD through ODM, becoming one of the few PCB manufacturers capable of mass production for both clients [2][9] - Significant revenue growth of over 6 times was noted from a specific customer in North America [2][9] - The automotive electronics segment's revenue share decreased to 48%, while AI-related products increased to 15%, and energy storage and industrial control businesses rose to 23% [2][11] Technological Advancements - The company is investing in embedded chip technology, collaborating with XPeng Motors to develop an 800V high-voltage architecture embedded electric board project [2][6] - Embedded technology significantly enhances product value, potentially increasing it by five to ten times compared to traditional PCB [2][13] - The embedded chip packaging technology is in small-scale production and is expected to enter mass production soon, with a focus on reducing system noise and power consumption [6][12] Future Development Plans - The company plans to build an advanced manufacturing park in Thailand and a new embedded PCB manufacturing base in Jiangmen, with a total investment of 1.5 billion RMB [4][7] - Expected product shipments in the automotive sector by 2026, with energy storage business projected to grow by at least 50% year-on-year in the second half of 2025 [4][26] Financial Performance and Projections - The company aims to achieve significant improvements in financial performance in the second half of 2025, targeting a reduction in losses and potential profitability [19] - The embedded technology is expected to enhance the overall value and profitability of products, with projected high profit margins [30][31] Competitive Landscape - The company differentiates itself from competitors by integrating semiconductor packaging capabilities with PCB manufacturing, providing unique advantages in precision circuit handling and power chip packaging [23] Market Trends - The automotive sector is expected to remain strong, with significant sales growth anticipated for XPeng Motors and other clients [25] - The energy storage business is projected to maintain high growth rates, driven by strong demand and competitive products in the market [26][27] Conclusion - The company is strategically positioned to leverage advancements in technology and market trends, focusing on sustainable growth through innovation and expansion in key sectors such as AI, automotive electronics, and energy storage [28]