Investment Ratings - The investment ratings for the companies discussed are all "Buy" with target prices set for VGT at Rmb407.0, WUS at Rmb98.0, and DSBJ at Rmb95.0 [9][11][7]. Core Insights - The PCB industry is experiencing structural growth driven by AI demand, with companies like VGT, WUS, and DSBJ positioning themselves to capitalize on this trend [2][3][6]. - VGT expects a return to normal production levels in 4Q25 after a transition impact in 3Q25, with significant revenue growth anticipated from its largest AI customer in 2026 [1][2]. - WUS highlights that while funds and equipment are not bottlenecks for capacity expansion, human resources may pose challenges [3]. - DSBJ is set to benefit from the AI cycle, with expectations for breakeven in its Thailand FPCB business and a turnaround in precision components by 2026 [6]. Company Summaries VGT (Victory Giant) - VGT has accelerated capacity expansion for 2026-2027, with most equipment booked and an increase in localization rates [2]. - The company anticipates meaningful contributions from CSP clients in 2026, despite small batch production in 4Q25 [2]. WUS - WUS faces fierce competition in the mid-to-low end PCB market, with AI driving structural growth [3]. - The company reported a loss of approximately Rmb40 million in its Thailand plant in 3Q25, but noted improvements in product quality and employee proficiency [3]. DSBJ (Dongshan Precision) - DSBJ is focusing on AI infrastructure opportunities through its RPCB and optical transceiver businesses, with a significant capacity expansion plan of US$1 billion [6]. - The company plans to dispose of its LED business this year and expects revenue growth from key smartphone customers [6].

Summary of Tiancheng Technology Conference Call Company Overview - **Company**: Tiancheng Technology - **Industry**: PCB (Printed Circuit Board) and Semiconductor Materials Key Points Financial Performance - In Q1 2025, Tiancheng Technology achieved revenue exceeding 100 million yuan, a year-on-year increase of 27% [2][4] - The net profit attributable to shareholders was approximately 19 million yuan, reflecting a growth of over 6% year-on-year [2][4] - The growth was primarily driven by AI-related products and the automotive electronics sector [2][4] Product and Market Position - The company is a global leader in PCB technology, particularly in high-reliability copper plating and blind via technologies, collaborating closely with clients like Fangzheng Circuit Board and Shenghong Technology [2][7] - In the IC substrate sector, multiple clients have begun adopting Tiancheng's products, including BT substrates and FPCBs, with significant progress expected in Q3 and Q4 2025 [2][8] - The company is a key supplier for AI computing-related circuit boards, providing high-reliability solutions to major international firms like NVIDIA [4][7] Strategic Developments - Tiancheng Technology is relocating its headquarters from Zhuhai to Pudong, expected to be completed by the end of June 2025, to align with its semiconductor business strategy [2][9] - A joint venture subsidiary has been established to support the semiconductor division, enhancing the company's capabilities in semiconductor wet electronic chemicals [2][10] Growth Projections - The sales volume of pure copper products is projected to grow by 30% year-on-year in 2024, with electroplating products expected to see over 50% growth [2][12] - The company anticipates a revenue growth rate of 30% to 50% for the entire year of 2025, with significant contributions expected from existing clients in the latter half of the year [2][13] Industry Dynamics - DuPont's investigation may lead clients to reassess their supplier choices, potentially accelerating the import substitution process, with DuPont's market share in China (approximately 3 billion yuan) likely shifting to other suppliers, including Tiancheng Technology [5][16] - The company is actively enhancing its technological capabilities to compete with DuPont, focusing on high-end applications and maintaining a strong market position [17][19] Challenges and Responses - The company faces challenges from rising labor costs and the need for extensive R&D investments, particularly in the semiconductor sector [15][36] - Despite short-term profit impacts due to these investments, long-term growth is expected as new high-margin products are introduced [15][43] Future Outlook - Tiancheng Technology aims to achieve a revenue target of 1.5 to 2 billion yuan within five years, driven by high-margin products and strategic acquisitions [43] - The company is optimistic about its growth trajectory, supported by ongoing R&D efforts and the expansion of production capacity in both Zhuhai and Thailand [43] Market Trends - The shift of PCB clients to overseas production due to geopolitical tensions and cost considerations is noted, with a significant impact on the domestic market [32][33] - The company is focusing on high-end products to ensure profitability amidst these market changes [33][39] Conclusion - Tiancheng Technology is well-positioned for growth in the PCB and semiconductor sectors, leveraging its technological advantages and strategic initiatives to capitalize on market opportunities while navigating industry challenges.