Core Viewpoint - Dongshan Precision (002384) has submitted a listing application to the Hong Kong Stock Exchange, with UBS Group, Haitong International, GF Securities, and CITIC Securities as joint sponsors [1] Company Summary - Dongshan Precision is the largest PCB supplier for edge AI devices globally and the second-largest flexible circuit board supplier, ranking among the top three PCB suppliers worldwide based on 2024 revenue [1] - The company's products are widely used in smartphones, PCs, automotive, industrial, and IoT devices, and it is expanding into the data center terminal market [1] - As an innovation-driven enterprise, Dongshan Precision offers a diversified product portfolio and one-stop solutions for top global technology companies [1] - It is the only supplier with mass production capabilities for PCBs, optical chips, and optical modules, which together account for 9%-14% of the material costs for AI servers, second only to GPUs [1] - Long-term partners include four of the top five consumer electronics companies and major electric vehicle and cloud service giants [1] Industry Summary - The PCB industry is experiencing continuous technological upgrades, with strong demand for high-end products driven primarily by AI, consumer electronics, communications, and automotive electronics [1] - The global edge AI device PCB market is projected to reach USD 9.8 billion in 2024, with rapid growth expected to increase to USD 31.7 billion by 2029, reflecting a compound annual growth rate (CAGR) of 26.4% [1]

Core Viewpoint - The stock of Dianzhi Technology has experienced a decline of 20.78% year-to-date, with a recent drop of 2.07% on November 17, 2023, indicating potential concerns regarding its market performance and investor sentiment [1]. Company Overview - Dianzhi Technology Co., Ltd. is located in Shenzhen, Guangdong Province, and was established on November 20, 2006. It was listed on July 31, 2017. The company specializes in the research, design, manufacturing, and sales of micro connectors and interconnection systems [1]. - The main revenue sources for Dianzhi Technology include automotive connectors (32.14%), RF connectors and cable assemblies (18.52%), electromagnetic compatibility components (17.75%), flexible boards (16.28%), and other products (15.32%) [1]. Financial Performance - For the period from January to September 2025, Dianzhi Technology reported a revenue of 4.039 billion yuan, representing a year-on-year growth of 21.20%. However, the net profit attributable to shareholders decreased by 18.71% to 373 million yuan [2]. - Since its A-share listing, Dianzhi Technology has distributed a total of 889 million yuan in dividends, with 430 million yuan distributed over the past three years [3]. Shareholder Information - As of November 10, 2023, the number of shareholders for Dianzhi Technology was 22,200, a decrease of 0.46% from the previous period. The average number of circulating shares per person increased by 0.46% to 16,208 shares [2]. - The top ten circulating shareholders include Hong Kong Central Clearing Limited, which holds 15.5804 million shares, an increase of 2.0336 million shares from the previous period. Other notable shareholders include Xingquan Huitai Mixed A and Xingzheng Global Huanheng Three-Year Holding Mixed A, both of which increased their holdings [3].

Group 1 - The company stated that its factory in Thailand does not involve the production of flexible printed circuit boards [1]

Group 1 - The company has not yet entered the Apple supply chain [2] - The company's flexible circuit board products are currently used in major domestic smartphone brands [2]

Core Insights - The company reported a revenue of 27.071 billion yuan for the first three quarters of 2025, a year-on-year increase of 2.28%, and a net profit attributable to shareholders of 1.223 billion yuan, up 14.61% year-on-year [1] - In Q3 2025, the company achieved a revenue of 10.115 billion yuan, a year-on-year increase of 2.82% and a quarter-on-quarter increase of 21.1%, while the net profit attributable to shareholders was 465 million yuan, down 8.19% year-on-year but up 53.99% quarter-on-quarter [1] - The company is focusing on high-end PCB production and capacity upgrades to capitalize on AI-related demand, with a total investment plan of 1 billion USD for Multek over 2-3 years [2] Financial Performance - For Q3 2025, the gross margin was 14.11%, an increase of 1.07 percentage points quarter-on-quarter, and the net margin was 4.60%, up 0.98 percentage points quarter-on-quarter [1] - The overall revenue growth without profit increase in Q3 was primarily due to insufficient new capacity conversion and increased management expenses [1] Business Segments - The softboard business saw growth driven by demand for new consumer electronics models, but profit did not increase due to insufficient capacity conversion in Thailand [1] - The hardboard business benefited from AI-driven demand for high-layer and HDI boards, leading to increased revenue and profit [1] - The LED business underwent strategic adjustments, resulting in slight improvements compared to the same period last year [1] - The precision manufacturing business experienced a decline in operating profit due to lower capacity utilization from client progress not meeting expectations [1] Strategic Initiatives - The company is investing in high-density interconnect (HDI) and high-layer boards to upgrade its product structure and reduce competition in the low-end market [2] - The acquisition of Solstice Optoelectronics aims to create synergies and strengthen the company's leading position in the optical communication sector [3] - The integration with Solstice is expected to enhance collaboration in technology, market expansion, and supply chain management across core business areas [3] Future Outlook - The company is projected to achieve net profits attributable to shareholders of 1.922 billion, 4.633 billion, and 6.034 billion yuan for the years 2025 to 2027, with corresponding PE ratios of 65.97, 27.37, and 21.01 [3] - The company is positioned to benefit from the rapid growth in AI demand, with significant growth potential in the PCB and optical communication sectors [3]

Core Viewpoint - Pengding Holdings has provided updates on its Thailand base progress, short-term performance fluctuations, and future growth drivers, indicating that the first phase of the Thailand base is on track and expected to reach a good production rhythm by mid-next year [1]. Group 1: Thailand Production Base - The Thailand Phase I base has been in production line debugging since May, and the overall progress is in line with expectations [1]. - Products are currently undergoing customer certification, with a good production rhythm anticipated by the first half of next year [1]. - Short-term cost differences are attributed to production efficiency and yield factors of the new production line, which are expected to diminish over time as local industry support improves and employee skills enhance [3]. Group 2: Financial Performance - The company expects revenue to grow in the fourth quarter due to seasonal demand, with operating profit also anticipated to rise [3]. - Profit performance will be impacted by increased depreciation costs and additional expenses during the certification and ramp-up process of the new production line [3]. - In Q3, the gross margin declined by approximately one percentage point year-on-year, primarily due to a quarterly increase in depreciation costs of over 60 million yuan and higher certification costs for the new factory [3]. - Despite the Q3 decline, the overall gross margin for the first three quarters of the year showed a slight year-on-year increase [3]. Group 3: High-Growth Areas - The automotive and server businesses saw a significant revenue increase of 91% year-on-year in the first three quarters, with expectations for these sectors to become important pillars for future growth [3]. - The optical module PCB business also experienced substantial revenue growth compared to the same period last year, aligning with the demand for next-generation 1.6T optical modules [3]. Group 4: AI Smart Hardware - In the AI smart hardware sector, the company is a major supplier for high-end products, with AI glasses requiring higher layers and precision for flexible boards [4]. - The company holds an optimistic outlook for the market next year, anticipating significant growth in demand for AI glasses as more clients enter the field and product functionalities and ecosystems improve [4]. - The company expects AI glasses to contribute incrementally to flexible and high-end rigid boards over the next two years [4]. Group 5: Automation in Production - The automation rate of the new production lines is generally high, but the specific level depends on the product type [4]. - Large-scale production lines can achieve "lights-out factories," while smaller, more diverse production lines do not pursue excessive automation to avoid efficiency loss [4].

Group 1 - The company, Siwei Fushi (300852.SZ), primarily focuses on high multilayer PCB production at its factory in Thailand and has not yet ventured into flexible circuit boards [1]

Core Viewpoint - Suzhou Dongshan Precision Manufacturing Co., Ltd. held a performance briefing for Q3 2025, discussing business segment performance, strategic projects, and capital operations, with participation from 392 investment institutions [1][2][5] Group 1: Business Performance - The company reported a mixed performance across its business segments in Q3 2025, with revenue growth but profit decline due to insufficient new capacity conversion and increased management expenses [3] - Softboard business saw revenue growth driven by demand for new consumer electronics, but profits did not increase due to underutilization of new capacity in Thailand [3] - Hardboard business benefited from strong demand for high-layer and HDI boards driven by AI, resulting in both revenue and profit growth [3] - Touch display business remained stable despite project delays, while LED business showed slight improvement year-on-year through strategic adjustments [3] - Precision manufacturing faced a decline in operating profit due to lower capacity utilization from client delays [3] Group 2: Strategic Projects - The company is actively expanding its AI PCB and new energy vehicle businesses, with a focus on order and customer expansion [3] - The GMD acquisition in the new energy vehicle sector is progressing as planned, with internal structure adjustments anticipated post-acquisition [3][4] - The Thai factory is expected to gradually release capacity starting in the second half of 2026, following successful client validation [4] Group 3: Capital Operations - The company is advancing its plans for a Hong Kong stock listing, with board approval obtained for related proposals, pending shareholder review [4]

Group 1: Financial Performance - The company's softboard business experienced growth in Q3 2025 due to increased demand from new consumer electronics models, but profit did not grow due to insufficient capacity conversion in Thailand [2] - The hardboard business benefited from AI demand for high-layer and HDI boards, leading to increased revenue and profit [2] - Overall revenue increased, but profit did not grow primarily due to insufficient new capacity conversion and increased management expenses [2] Group 2: Business Development and Strategy - The first phase of capacity for Multek's AI PCB-related orders is expected to be ready by Q2 2026, with production ramp-up starting in Q3 2026 [2] - The company is actively expanding its domestic customer base in the new energy vehicle sector, with stable overseas shipments and gradual volume growth [3] - The acquisition of GMD is progressing as planned, and post-acquisition, the company will adjust its internal structure and optimize production capacity based on market dynamics [3] Group 3: Future Outlook - The softboard business in the Thailand factory has completed major customer validation, with production capacity expected to gradually release starting in H2 2026 [3] - The company is actively and orderly advancing the overall progress of its Hong Kong listing, with relevant proposals approved by the board on October 15, 2025 [3]

Summary of Dongshan Precision's Conference Call Industry and Company Overview - **Company**: Dongshan Precision - **Industry**: PCB (Printed Circuit Board) manufacturing, AI technology, automotive components, and consumer electronics Key Points and Arguments Financial Performance - **Revenue**: In Q3 2025, total revenue reached 27.07 billion yuan, a year-on-year increase of 2.28% driven primarily by the PCB business [4][5] - **Net Profit**: Net profit attributable to shareholders decreased by 14.61% to 1.223 billion yuan [2][4] - **Gross Margin**: Gross margin slightly improved to 13.79%, despite increased depreciation and amortization costs of 200-300 million yuan due to new capacity coming online [2][4] - **Cash Flow**: Operating cash flow net amount was 2.95 billion yuan, showing slight growth year-on-year [4] Business Segments Performance - **Soft Board Business**: Benefited from new model releases, leading to revenue recovery [2][4] - **AI Demand**: Increased demand for HDI (High-Density Interconnect) and high-layer boards due to AI applications [2][4] - **Hard Disk Business**: Maintained steady performance [2] - **Touch Display and Precision Manufacturing**: Performance was subdued due to external factors [2] - **LED Business**: Continued decline due to industry demand weakness and overcapacity [2][4] Strategic Initiatives - **AI Infrastructure**: The company is actively investing in AI-related PCB production, with phase one expected to be operational by mid-2026 [2][6] - **Acquisition of Solstice Optoelectronics**: The acquisition is progressing, with most of the share transfer payment completed [2][8] - **Apple iPhone 17**: Sales performance has been strong, with millions of Display components delivered [2][6] Future Outlook - **MOTEC AI PCD Orders**: New capacity expected to be ready by Q2 2026, primarily to meet domestic cloud service provider demands [2][7] - **Automotive Business**: Efforts to expand into domestic new energy vehicle companies are ongoing, with stable demand from overseas clients [2][7] - **CMD Acquisition**: Ongoing with plans to stabilize and optimize production capacity in Europe [3][11] Challenges and Risks - **Management Expenses**: Increased management expenses by 151 million yuan year-on-year, primarily due to intermediary fees related to acquisitions [4][21] - **Trade Conflicts**: Minimal direct impact from US-China trade tensions, with a dual circulation strategy in place [2][15] Other Important Insights - **LED and Touch Display Strategy**: Plans to dispose of underperforming LED business while continuing to develop touch display products in collaboration with partners [2][14] - **Market Position**: The company has established a strong position in the soft board market, ranking second globally and first domestically [2][22] - **Future Strategic Direction**: Focus on leveraging flexible PCBs, touch displays, and precision manufacturing to support stable cash flow and drive AI infrastructure development [2][24] This summary encapsulates the key insights from Dongshan Precision's conference call, highlighting financial performance, strategic initiatives, and future outlook while addressing challenges faced by the company.