Summary of Dazhu CNC Conference Call Company Overview - Dazhu CNC is a leading supplier of PCB production equipment in China, particularly dominant in the mechanical drilling sector, and is actively expanding its full industry chain layout, including exposure, testing, and lamination processes [2][3][4] - The company is 84% owned by Dazhu Laser, indicating a stable shareholding structure [2][3] Industry Context - Dazhu CNC's performance is closely tied to the PCB industry's cyclical nature, with a peak in 2021 followed by profit pressure in 2022-2023 due to industry downturns [2][5] - Starting in 2024, the company is expected to benefit from increased demand for AI computing power and high-density interconnect (HDI) boards, leading to a significant recovery in net profit margins [2][5][6] Key Insights - The PCB industry is entering a new growth cycle driven by the demand for high-end HDI boards, particularly from AI computing servers [2][6] - Domestic PCB manufacturers are actively expanding production capacity to meet this demand, with Dazhu CNC positioned to benefit significantly from this expansion [2][6][8] - High-end HDI boards require more advanced drilling processes, leading to increased demand for drilling equipment, which Dazhu CNC is well-equipped to fulfill due to its technological advantages [2][6][10] Financial Performance - For the period from January to August 2025, Dazhu CNC secured nearly 4.5 billion yuan in orders, with 1 billion yuan in orders in July and August alone, indicating a high industry demand [4][20] - Revenue is projected to reach 6 billion yuan in 2025, with a net profit of 800 million yuan, and a potential market capitalization of 80 billion yuan [4][21] Competitive Landscape - Dazhu CNC is recognized as a top player in the mechanical drilling equipment market, with its products gaining traction due to their performance and cost-effectiveness [14][15] - The company has made significant progress in the CCD back drilling sector, achieving yield rates comparable to German competitors while maintaining a price advantage [15][18] Future Outlook - The company is expected to continue benefiting from the growth in demand for high-end HDI boards driven by AI computing needs, with a forecasted increase in orders and revenue [7][8][21] - Dazhu CNC's market position is strengthened by its comprehensive product offerings across the PCB production process, including exposure, lamination, and testing equipment [18][21] Additional Considerations - The PCB industry is characterized by a three-year cyclical investment period, currently in its early stages, suggesting significant growth potential for Dazhu CNC [21] - The company is well-positioned to capture market share through its full industry chain layout and competitive product offerings, indicating a strong future growth trajectory [21]

Investment Rating - The report maintains an "Overweight" rating for the mechanical equipment industry, specifically highlighting the potential in PCB equipment, solid-state battery equipment, and humanoid robots [1]. Core Insights - The demand for AI computing power is driving the high-end PCB market, with significant growth expected in the server market from 2024 onwards, leading to increased production capacity among domestic PCB manufacturers [2][29]. - Solid-state battery equipment is seeing steady industrialization, with key suppliers like Xian Dao Intelligent delivering critical production lines, indicating a growing market for solid-state batteries [4]. - The humanoid robot sector is poised for significant opportunities, particularly with upcoming product launches from Tesla and other companies, suggesting a favorable investment environment [5]. Summary by Sections PCB Equipment - Oracle's recent financial results indicate a substantial increase in remaining performance obligations (RPO), suggesting a strong demand for AI computing infrastructure [2]. - Leading PCB manufacturers in China are expanding their high-end HDI production capacity to capture quality orders in the server PCB market, which will significantly boost demand for drilling equipment [3]. - Key recommendations for PCB production include focusing on drilling, exposure, and electroplating processes, with specific companies highlighted for their roles in these areas [3][30]. Solid-State Battery Equipment - Leading equipment manufacturers are successfully delivering key solid-state battery production equipment, with significant energy savings and cost reductions reported [4]. - The solid-state battery sector is expected to enter a critical phase of pilot production by 2025-2026, with ongoing equipment optimization anticipated [4][22]. Humanoid Robots - The humanoid robot sector is experiencing a surge in interest, driven by new product releases and advancements in AI capabilities, with specific companies recommended for investment [5][44]. - The report emphasizes the importance of high-performance AI models for the development of humanoid robots, indicating a need for continued innovation in this area [44][45]. Industry Trends - The mechanical equipment industry is witnessing a strong upward trend, with significant sales growth in excavators and other machinery, driven by infrastructure projects and international demand [11][36]. - The report highlights the increasing importance of electric and unmanned machinery in high-altitude projects, suggesting a shift in industry dynamics towards more advanced technologies [37][38].

Group 1 - The global server market is entering a new growth cycle starting in 2024, driven by the increasing demand for AI computing power, with an expected CAGR of 18.8% from 2024 to 2029 [2] - The PCB industry is recovering from a phase of adjustment due to weak consumer electronics and inventory cycles, with emerging demands from AI servers and high-performance infrastructure expected to drive growth from 2024 [2][3] - Domestic PCB manufacturers are actively expanding production and increasing capital expenditures, focusing on high-end products such as HDI and multi-layer boards [2][3] Group 2 - The global PCB equipment market is projected to reach 51 billion yuan in 2024, with a year-on-year growth of 9.0%, and a CAGR of 4.9% from 2020 to 2024 [3] - The demand for PCB equipment is significantly boosted by AI computing infrastructure, with the market expected to grow to 77.5 billion yuan by 2029, reflecting a CAGR of 8.7% from 2024 to 2029 [3] - Drilling, exposure, and testing equipment represent the highest value segments in the PCB equipment market, accounting for 20.75%, 16.99%, and 15.00% respectively in 2024 [3] Group 3 - The drilling equipment segment is expected to benefit from increased demand for high-end HDI, with both mechanical and laser drilling seeing growth due to the rising complexity of HDI designs [3] - The exposure equipment market is currently dominated by foreign brands, with low domestic penetration, particularly in LDI technology which is more suited for HDI [4] - The demand for plating equipment is increasing due to the higher number of plating cycles required for advanced HDI, alongside quality control pressures [5] Group 4 - Major equipment manufacturers are showing a clear upward trend, with expectations for accelerated performance in the future [6] - Key players in the drilling segment include Dazhu CNC (301200), while the exposure segment is led by Xinqi Micro (688630) and Tianzhun Technology (688003) [7] - The plating segment is highlighted by Dongwei Technology (688700), with Keg Precision (301338) noted for its role in the solder paste printing segment [7]

Investment Rating - The report maintains a "Recommended" rating for leading PCB manufacturers such as Shenghong Technology, Pengding Holdings, and Huadian Co., Ltd. [4][5] Core Viewpoints - The PCB industry is experiencing rapid advancements in packaging and high-density interconnect technologies, with traditional HDI and substrate technologies evolving into mSAP processes to meet the demands of high-speed signal transmission and large-scale integration [1][2] - The demand for PCB is driven by AI applications, leading to significant expansions in production capacity among leading companies, with total investments exceeding 30 billion RMB [2][20] - The core materials for PCB, including copper foil, electronic cloth, and resin, are undergoing upgrades to meet the high-frequency and high-speed requirements of AI applications [2][20][26] Summary by Sections 1. CoWoP and mSAP as Core Technologies - CoWoP (Chip-on-Wafer-on-PCB) is emerging as a future packaging route, enhancing interconnect density and reducing costs by directly using large-size PCBs [1][11] - mSAP (Modified Semi-Additive Process) is becoming the core process for achieving sub-10 µm line capabilities, essential for high-performance applications [1][14] 2. PCB Capacity Expansion and Material Upgrades - Leading PCB manufacturers are actively expanding production capacity, with significant investments announced by companies like Huadian Co., Ltd. and Shenghong Technology [2][20] - The upgrade of core materials includes the transition of copper foil from HVLP1 to HVLP5, electronic cloth to third-generation low-dielectric cloth, and resin to hydrocarbon and PTFE types [2][20][28] 3. Tight Supply of Core Equipment and Acceleration of Domestic Substitution - The supply of core PCB equipment, including drilling, plating, and etching imaging, is tight, with domestic manufacturers accelerating their layouts in advanced process equipment [2][49] - Companies like Dazhu CNC and Ding Tai High-Tech are focusing on high-layer boards and HDI equipment to meet the increasing demands of the industry [2][49] 4. Investment Recommendations - The report suggests focusing on leading PCB manufacturers such as Shenghong Technology, Pengding Holdings, and Huadian Co., Ltd., as well as material companies with core technologies like Honghe Technology and Zhongcai Technology [3][4] - Equipment manufacturers involved in domestic substitution, such as Dazhu CNC and Xinqi Microelectronics, are also highlighted as potential investment opportunities [3][4]

Core Viewpoint - The upcoming unlocking of approximately 359 million restricted shares of Shenzhen Dazhu CNC Technology Co., Ltd. is expected to significantly impact the company's market capitalization, which could reach 31.743 billion yuan, representing a potential increase in the circulating share volume by over 579% [1][3]. Company Overview - Dazhu CNC, established in April 2002, specializes in PCB production equipment solutions and was listed on the Shenzhen Stock Exchange in February 2022, with plans to apply for a listing on the Hong Kong Stock Exchange in May 2025 [3]. - The company is the leading manufacturer of PCB production equipment globally, holding approximately 6.5% of the global market share and 10.1% of the domestic market share [6]. Financial Performance - The company's revenue from 2022 to 2024 was 2.786 billion yuan, 1.634 billion yuan, and 3.343 billion yuan, respectively, with a significant decline of 41.3% in 2023, followed by a recovery of 104.56% in 2024 due to increased demand from the AI industry and the recovery of the consumer electronics sector [6][7]. - Net profits for the same period were 432 million yuan, 136 million yuan, and 300 million yuan, with a notable increase of 120.82% in 2024 [7]. Market Dynamics - The global PCB equipment market is projected to grow from approximately 5.84 billion USD in 2020 to about 7.085 billion USD in 2024, with a compound annual growth rate (CAGR) of 4.9%, and is expected to reach around 10.765 billion USD by 2029 with a CAGR of 8.7% [6]. - The competitive landscape is fragmented, with the top five manufacturers holding about 20.9% of the total market share [6]. Shareholder Dynamics - The unlocking of shares involves major shareholders, including Dazhu Laser Technology Group Co., Ltd., which holds 356 million restricted shares, and Dazhu Holdings Group Co., Ltd., with 3.2319 million shares [3][4]. - The original lock-up period for these shares was 36 months, with potential extensions based on stock performance [3]. Valuation Metrics - As of August 18, the company's market capitalization was 38.13 billion yuan, with a TTM price-to-earnings ratio of 107.6, indicating high market expectations for future growth [8]. - Comparatively, peers in the industry have TTM price-to-earnings ratios of 102.9 and 262, suggesting that Dazhu CNC's valuation is relatively high [8]. Cash Flow and Operational Efficiency - The company's cash flow from operating activities has been declining, with net cash flows of 655 million yuan, 417 million yuan, and 155 million yuan from 2022 to 2024 [8]. - High levels of trade receivables and notes receivable, totaling 2.268 billion yuan, 1.756 billion yuan, and 2.846 billion yuan, indicate potential operational pressures and risks related to cash conversion efficiency [8].

Core Viewpoint - The upcoming unlock of approximately 359 million restricted shares of Dazhu CNC Technology Co., Ltd. is expected to significantly impact its market capitalization, potentially reaching 31.743 billion yuan, which could lead to increased volatility in the stock price due to a more than 579% increase in the circulating shares [1][4][10]. Group 1: Company Overview - Dazhu CNC, established in April 2002, specializes in PCB production equipment solutions and was listed on the Shenzhen Stock Exchange in February 2022, with plans to apply for a listing on the Hong Kong Stock Exchange in May 2025 [4][8]. - The company is the leading manufacturer of PCB production equipment globally, holding approximately 6.5% of the global market share and 10.1% of the domestic market share [8][9]. Group 2: Financial Performance - Dazhu CNC's revenue from 2022 to 2024 was 2.786 billion yuan, 1.634 billion yuan, and 3.343 billion yuan, respectively, with a significant decline of 41.3% in 2023, followed by a recovery of 104.56% in 2024 due to increased demand from the AI industry and the recovery of the consumer electronics sector [8][9]. - The net profit for the same period was 432 million yuan, 136 million yuan, and 300 million yuan, with a notable increase of 120.82% in 2024 [9][10]. - The gross margin has been declining, with figures of approximately 34.02%, 29.18%, and 27.15% from 2022 to 2024, primarily due to increased competition and pricing strategies [9][10]. Group 3: Market Dynamics - The global PCB equipment market is projected to grow from approximately 5.84 billion USD in 2020 to about 7.085 billion USD in 2024, with a compound annual growth rate (CAGR) of 4.9%, and expected to reach around 10.765 billion USD by 2029 with a CAGR of 8.7% [8]. - The competitive landscape is fragmented, with the top five manufacturers holding about 20.9% of the total market share [8]. Group 4: Cash Flow and Valuation - Dazhu CNC has experienced a decline in cash flow from operating activities, with net cash from operations of 655 million yuan, 417 million yuan, and 155 million yuan from 2022 to 2024 [10]. - The company's trade receivables have remained high, with 2.268 billion yuan, 1.756 billion yuan, and 2.846 billion yuan reported at the end of each respective year, indicating potential liquidity issues [10]. - As of August 18, the company's market capitalization was 38.13 billion yuan, with a TTM price-to-earnings ratio of 107.6, suggesting high market expectations for future growth but also indicating a risk of overvaluation [10].

Investment Rating - The report maintains a "Positive" investment rating for the PCB industry [3][11]. Core Insights - The PCB industry is experiencing growth driven by strong demand from AI applications and technological upgrades, leading to increased capital expenditures in downstream sectors [8][21]. - The global PCB market is expected to see differentiated growth across product segments, with high-density interconnect (HDI) boards benefiting from AI server demand, projected to grow by 18.8% year-on-year to reach $12.5 billion in 2024 [11][12]. - The report highlights a trend towards high-density, high-performance PCB products, with the combined market share of HDI and packaging substrates exceeding 34% [11][12]. Summary by Sections PCB Product Overview - PCB products are categorized into rigid boards, flexible boards, rigid-flex boards, and packaging substrates, with HDI boards widely used in consumer electronics and high-frequency boards for 5G communication [8][9]. Market Segmentation and Growth - In 2024, the global PCB market is projected to reach $73.57 billion, with multilayer boards holding the largest share at 38.1% [11][12]. - The smartphone sector accounts for 19% of the PCB market, with a projected value of $13.89 billion, while the server/storage sector is expected to grow by 33.1% year-on-year to $10.92 billion [15][16]. Regional Market Dynamics - China is expected to dominate the PCB market, with its share increasing from 54.4% in 2023 to 56.0% in 2024, reflecting its significant role in global PCB production [22][23]. Technological Advancements - The report emphasizes the need for PCB manufacturers to adapt to higher complexity and performance requirements driven by AI and high-speed networking, necessitating advancements in design and manufacturing processes [21][24]. Equipment and Supply Chain - The report outlines the production processes and key equipment used in PCB manufacturing, highlighting the importance of drilling equipment, which holds the highest market share in the PCB production process [31][34]. - The global drilling equipment market is projected to grow from $1.17 billion in 2020 to $1.47 billion in 2024, with a compound annual growth rate (CAGR) of 10.3% expected from 2024 to 2029 [38][43]. Market Trends and Future Outlook - The PCB industry is expected to continue evolving with the increasing demand for high-density and high-layer count boards, particularly in AI server applications, which are pushing the boundaries of PCB technology [27][28].

2025年以来，港股市场迎来"A+H"上市热潮。这不，A股市场一家PCB龙头也开启了赴港上市之旅。 5月30日，深圳市大族数控科技股份有限公司(以下简称"大族数控")向港交所递交上市招股书，拟香港主板上市， 中金公司担任独家保荐人。 该公司成立于2002年，是一家专注于PCB(印刷电路板)专用生产设备解决方案的服务商，主要从事PCB专用生产 设备的研发、生产及销售，为PCB制造商提供端到端工序解决方案。2022年2月，大族数控(301200.SZ)在深交所 创业板上市，直至如今公司市值超155亿元。此外，公司公司控股股东大族激光(002008.SZ)，目前市值则超247亿 元。 据智通财经APP观察，自2009年以来，按收入计，大族数控已连续16年位列CPCA专用设备和仪器榜单第一名。 按2024年收入计，公司是全球最大的PCB专用生产设备制造商，全球市占率为6.5%。 这么一家PCB龙头赴港上市的背后，又将书写什么样的发展故事呢，投资价值又将如何? 2024年业绩倍增，营收超33亿元 深耕PCB专用设备领域20余年，大族数控目前已然形成了广泛且多元化的业务版图。 具体而言，该公司拥有全球PCB专用设备行业最 ...

Group 1 - Dazhu CNC has submitted a prospectus to the Hong Kong Stock Exchange for a dual listing after its A-share debut in 2022, aiming to raise funds for establishing a new factory and research center in Singapore, as well as hiring personnel for AI server and new energy vehicle PCB production equipment development [1] - Dazhu CNC, established in 2002, specializes in PCB production equipment solutions and has a comprehensive product matrix covering various PCB segments, making it a leader in the global PCB equipment industry [2][3] - The company has maintained a stable customer base, ranking first in the CPCA specialized equipment and instruments list for 16 consecutive years since 2009, with a global market share of 6.5% and a Chinese market share of 10.1% as of 2024 [3] Group 2 - The PCB equipment industry is entering a new era of intelligent production, with the market size in China expected to grow from approximately $3.306 billion in 2020 to about $4.111 billion in 2024, reflecting a compound annual growth rate (CAGR) of 5.6% [4] - Dazhu CNC's product sales are projected to reach 4,510 units in 2024, a 117% increase from 2,080 units in 2023, with an average product price remaining stable at 679,000 RMB per unit [4] - The company experienced a revenue decline from 2.786 billion RMB in 2022 to 1.634 billion RMB in 2023 due to a downturn in the PCB industry, but is expected to rebound to 3.343 billion RMB in 2024, driven by demand from the AI and electric vehicle sectors [6][7] Group 3 - Dazhu CNC's profit figures for 2022, 2023, and 2024 are approximately 432 million RMB, 136 million RMB, and 300 million RMB, respectively, with a declining gross margin from 34% in 2022 to 27.2% in 2024 due to the introduction of new automated drilling equipment [8] - The company's revenue structure is diverse, with drilling equipment accounting for 62.8% of revenue in 2024, followed by exposure equipment at 10.2%, highlighting the importance of these segments in the PCB production process [8] - Dazhu CNC is expanding its international business, particularly targeting the Southeast Asian market, with plans to establish a customer service center in Thailand and expand sales networks in Malaysia and Vietnam [8][9]