Summary of Dongshan Precision's Conference Call Company Overview - Dongshan Precision has entered the Apple supply chain through the acquisition of Weixin, leading to a fivefold increase in revenue after a three-year capital expenditure cycle, establishing a duopoly in the flexible circuit board (FPC) industry alongside Pengding, capturing a significant portion of the global market share [2][5] Financial Performance - Since 2019, Dongshan Precision's operating cash flow has surged, indicating strong profitability [2][6] - The company has improved overall profitability by scaling back unprofitable segments such as LED packaging and LCM modules [2][6] - The flexible circuit board business is expected to maintain a profit growth rate of around 25% annually, driven by increased demand for foldable screens [2][6] Strategic Acquisitions - The acquisition of Solstice has positioned Dongshan Precision favorably in the 800G optical module sector, with plans to expand production to 400,000 units per month [2][7] - Solstice's capability to self-supply optical chips mitigates potential supply bottlenecks, enhancing its prospects of becoming an industry leader [2][7] - A $1 billion investment plan for expanding rigid board production includes the acquisition of Cat Tech, which has decades of experience in high-end PCB manufacturing [2][8] Market Position and Future Outlook - The rigid board factory, acquired in 2018, has undergone significant transformation and maintains solid profitability despite the time required for heavy asset integration [2][9] - The focus on AI PCB technology is expected to drive substantial growth, with investments of 1-2 billion RMB already made for technological upgrades [3][11] - Dongshan Precision is projected to become a key player in the PCB industry by 2026, with potential incremental demand of $10 billion and the establishment of over $500 million in new fixed asset production capacity [4][12] Challenges and Competitive Landscape - The company faces profit pressure from high-end capacity investments made by competitors during the industry's peak in 2021, which will impact profits from 2022 to 2024 [4][10] - Despite historical valuation challenges due to shareholder structure, the market is expected to recognize the company's value as it aligns with the growing demand for AI hardware [4][13] Conclusion - Dongshan Precision is strategically positioned for growth in the flexible and rigid PCB markets, with strong financial performance, strategic acquisitions, and a focus on emerging technologies like AI PCB, setting the stage for significant future expansion and market leadership [2][12][13]

Core Viewpoint - The AI computing industry continues to show strong performance, with significant gains in related stocks and ETFs, particularly in the context of increasing demand for AI infrastructure and components [1][3][5]. Group 1: Stock Performance - On the last trading day of June, the AI computing sector remained active, with the ChiNext AI ETF achieving a six-day consecutive rise, closing up 2.1% [1]. - Notable stocks such as Zhongji Xuchuang and Tianfu Communication saw significant fluctuations, with Tianfu Communication leading with a rise of over 6% [1]. - The ChiNext AI ETF Huabao (159363) recorded a trading volume of 1.59 billion yuan, indicating strong market interest [1]. Group 2: Monthly Performance - The ChiNext AI ETF Huabao reported a monthly increase of 16.99%, outperforming the ChiNext Index, which rose by 8.02% [6]. - The ETF's performance was significantly better than other AI-themed indices, such as CS AI and Kexin AI [6]. Group 3: Industry Outlook - The investment strategy for July suggests continued high demand for AI computing infrastructure, particularly in light of the upcoming earnings forecast season [3]. - Key sectors to watch include optical modules and copper connection industries, which are expected to benefit from global AI development [3]. - The server manufacturing sector is experiencing robust growth, with Taiwanese AI server manufacturers reporting a year-on-year revenue increase of 162% in May [4]. Group 4: Market Trends - The A-share computing industry is viewed as a rare growth sector, with expectations that the commercialization of AI will enhance its market position [5]. - The report emphasizes the importance of focusing on leading companies in the optical module sector and related fields to capture opportunities in the AI market [5].