Group 1: Financial Performance - In the first half of 2025, the company achieved revenue of 3.533 billion CNY, a year-on-year increase of 20.73% [2] - The net profit attributable to shareholders was 222 million CNY, a year-on-year decrease of 6.19%, primarily due to a decline in gross profit margin [2] - The gross profit margin for the first half of 2025 was 21.51%, down 3.57 percentage points from the previous year, largely due to rising prices of precious metal raw materials [2] Group 2: Cost Management Strategies - The company is implementing measures to improve product gross margins by optimizing sales structure and focusing on high-value customers [3] - Cost management initiatives include enhancing unit cost monitoring, improving material utilization, and implementing price adjustments for certain products [7] - The company aims to achieve a dual increase in per capita output and efficiency to mitigate the impact of rising raw material costs [7] Group 3: Capacity Expansion and Utilization - The current overall capacity utilization rate is approximately 85% [8] - The company is accelerating capacity expansion at its Zhuhai plants and establishing a new HDI factory to meet growing market demand [8] - Plans are in place to enhance production capabilities at overseas facilities, including a factory in Thailand [8] Group 4: Market Diversification and Sales Strategy - Sales in the U.S. market account for about 10% of total revenue, with ongoing operations unaffected by recent tariff changes [11] - The company is diversifying its market strategy, with domestic sales exceeding 50% of total revenue to reduce reliance on the U.S. market [12] - Strategies include optimizing customer cooperation terms and accelerating the establishment of overseas production bases to mitigate tariff impacts [12] Group 5: Subsidiary Performance - The subsidiary San De Guan continues to face challenges in the flexible printed circuit board (FPC) sector, although it has made progress in reducing losses [9] - The subsidiary Puno Wei has successfully launched its mSAP production line for advanced packaging substrates, with ongoing improvements in profitability [10]

Group 1: Financial Performance - In the first half of 2025, the company achieved revenue of CNY 3.533 billion, representing a year-on-year growth of 20.73% [2] - The net profit attributable to shareholders for the same period was CNY 222 million, a decline of 6.19% year-on-year, primarily due to a decrease in gross profit margin [2] - The gross profit margin for the first half of 2025 was 21.51%, down by 3.57 percentage points compared to the previous year, largely due to rising raw material prices, particularly gold salts, which increased by 36.57% year-on-year [2][3] Group 2: Strategic Measures for Profitability Improvement - The company is focusing on high-value customers and orders, optimizing the sales structure by eliminating loss-making orders and enhancing collaboration with key clients for new product development [3] - Strengthening the sales team by recruiting experienced professionals and implementing a performance evaluation system that includes high-value customer development metrics [3] - Enhancing cost management through standardized cost control measures and improving material utilization to lower unit product costs [3][7] Group 3: Capacity Expansion and Utilization - The current overall capacity utilization rate is approximately 85% [8] - The company is accelerating capacity expansion at its Zhuhai plants to meet increasing market demand, with plans for a new high-density interconnect (HDI) factory [8] - Ongoing construction of a factory in Thailand aims to establish a more comprehensive overseas production network [8] Group 4: Response to Raw Material Cost Increases - The company is implementing detailed cost control measures to manage rising raw material costs, including dynamic monitoring of costs and optimizing production processes [7] - Structural price adjustments are being made for certain products based on market demand and customer acceptance [7] Group 5: Market Diversification and Risk Management - Currently, approximately 10% of the company's revenue comes from the U.S. market [11] - The company is diversifying its market strategy to reduce reliance on the U.S. market, with domestic sales now exceeding 50% of total revenue [12] - Strategies include optimizing customer cooperation terms and accelerating the establishment of overseas production bases to mitigate the impact of U.S. tariffs [12] Group 6: Subsidiary Performance - The subsidiary San De Guan is facing challenges in the flexible printed circuit board (FPC) sector, with a projected industry growth of 3.6% in 2025, but still under pressure from low profit margins [9] - The subsidiary Puno Wei has successfully launched a production line for advanced packaging substrates, focusing on high-end applications and showing signs of improving profitability [10]

Core Viewpoint - The company reported strong financial performance in the first half of 2025, driven by increased demand in the AI sector and effective operational management strategies [2][3] Financial Performance - In the first half of 2025, the company achieved revenue of 10.453 billion yuan, representing a year-on-year growth of 25.63% [2][3] - The net profit attributable to shareholders was 1.360 billion yuan, reflecting a year-on-year increase of 37.75% [2][3] - Overall gross margin and net margin for the first half of 2025 were 26.28% (up 0.08 percentage points YoY) and 13.02% (up 1.16 percentage points YoY) respectively [2] Business Segments - **PCB Business**: Generated revenue of 6.274 billion yuan, a year-on-year increase of 29.21%, accounting for 60.02% of total revenue; gross margin was 34.42%, up 3.05 percentage points YoY [2] - **IC Substrate Business**: Revenue reached 1.740 billion yuan, a growth of 9.03%, making up 16.64% of total revenue; gross margin was 15.15%, down 10.31 percentage points YoY [2] - **Electronic Assembly Business**: Achieved revenue of 1.478 billion yuan, a year-on-year increase of 22.06%, representing 14.14% of total revenue; gross margin was 14.98%, up 0.34 percentage points YoY [2] Cost Management - The company maintained effective cost control with sales expense ratio at 1.64% (YoY stable), management expense ratio at 4.27% (up 0.53 percentage points YoY), R&D expense ratio at 6.43% (down 1.25 percentage points YoY), and financial expense ratio at 0.2% (up 0.3 percentage points YoY) [2] Market Trends - The company benefited from the accelerated construction of computing power infrastructure and the release of demand for AI acceleration cards, which significantly boosted orders in the PCB business [2] - The domestic and international major cloud service providers continued to increase capital expenditures, particularly in AI computing power investments, driving demand for AI servers and related products [2] Investment Outlook - The company is expected to see a slight upward adjustment in profit forecasts, with projected net profits for 2025-2027 at 2.856 billion yuan, 3.815 billion yuan, and 4.762 billion yuan respectively, corresponding to P/E ratios of 40, 30, and 24 times [3] - The company is positioned to benefit from the domestic substitution in the semiconductor substrate market, maintaining a "recommended" rating based on current valuations [3]