Core Viewpoint - The current stage of AI development differs from the internet bubble period, with hardware supply still in a state of shortage and a safety margin remaining in the market [1] Group 1: AI Development and Market Dynamics - Since 2022, AI technology has led to unprecedented infrastructure investments in the AI industry, creating a boom in the semiconductor hardware sector [1] - Concerns about an "AI bubble" are valid, as capital expenditures of major global cloud providers are expected to exceed their combined operating cash flow by 2026 [1] - Key differences between the current AI phase and the internet bubble include different driving enterprises, incomplete commercialization of AI, limited transmission of investment bubbles to the stock market, and the ongoing loose global monetary environment [1] Group 2: Supply Chain Constraints - The demand for high-performance computing is rigid due to the rapid development of multimodal large models and AI Agent functionalities, leading to a tight supply-demand relationship [2] - Global data center vacancy rates are at historical lows, and the consumption of electricity by data centers is impacting the elasticity of power supply [2] - Domestic computing power is still in a catch-up phase, with supply constraints persisting [2] Group 3: PCB Market Insights - The current PCB upcycle is primarily driven by growth in HDI and high-layer board shipments, with a projected compound annual growth rate of 20.3% for high-end HDI PCBs and 11.6% for boards with 14 layers or more from 2024 to 2029 [3] - The technology barriers for high-end HDI and high-layer boards are significant, with major companies leading the expansion [3] - Capital expenditures in the industry are expected to increase by 8.4% in the first three quarters of 2025 compared to the entire year of 2024, indicating that capacity expansion will still be limited relative to demand growth [3]

Core Viewpoint - The ongoing "A+H" listing trend is exemplified by Jingwang Electronics' application for a Hong Kong IPO, aiming to transition from a domestic leader to a global player in the PCB industry [1][2]. Group 1: Company Overview - Jingwang Electronics, founded in 1993, is a leading global manufacturer of PCB products, particularly in the automotive electronics sector and AI computing infrastructure [1][2]. - The company has expanded its market from consumer electronics and industrial control to automotive electronics and advanced technologies like AI and robotics, forming a diversified business model [2][3]. Group 2: Financial Performance - In 2023, 2024, and the first three quarters of 2025, Jingwang Electronics reported revenues of 10.757 billion, 12.659 billion, and 11.083 billion yuan, respectively, with year-on-year growth rates of 17.68% and 22% for 2024 and 2025 [3]. - The automotive electronics segment remains the primary revenue source, contributing 50.66 billion yuan, or 45.7%, in Q3 2025 [3]. Group 3: Profitability Challenges - The company faced pressure on short-term profit growth, with net profits of 0.911 billion, 1.160 billion, and 0.961 billion yuan from 2023 to the first three quarters of 2025, showing a slowdown in profit growth [4]. - The gross margin has declined from 23.2% in 2023 to 21.6% in the first three quarters of 2025, attributed to high raw material prices and strategic investments [4][5]. Group 4: Market Trends and Opportunities - The PCB industry is experiencing structural growth driven by AI and automotive electronics, with the global PCB market expected to grow from $75 billion in 2024 to $105.2 billion by 2030, at a CAGR of 5.8% [7]. - The AI server PCB market is projected to grow from $3.5 billion in 2024 to $10.8 billion by 2030, with a CAGR of 20.7% [7]. - Jingwang Electronics is well-positioned in the automotive electronics sector and is one of the few suppliers for global AI computing infrastructure, indicating strong growth potential [7][8].

Application Proof of Shenzhen Kinwong Electronic Co., Ltd. 深圳市景旺電子股份有限公司 The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. (the "Company") (A joint stock company incorporated in the Peop ...

本申請版本乃根據香港聯合交易所有限公司（「聯交所」）及證券及期貨事務監察委員會（「證監會」）的要求 而刊發，僅用作提供資訊予香港公眾人士。 香港聯合交易所有限公司與證券及期貨事務監察委員會對本申請版本的內容概不負責，對其準確性或完整 性亦不發表任何意見，並明確表示概不就因本申請版本全部或任何部分內容而產生或因倚賴該等內容而引 致的任何損失承擔任何責任。 Shenzhen Kinwong Electronic Co., Ltd. 深圳市景旺電子股份有限公司 （「本公司」） （於中華人民共和國註冊成立之股份有限公司） 申請版本 警 告 本申請版本為草擬本，其內所載資訊並不完整，亦可能會作出重大變動。 閣下閱覽本文件，即代表 閣 下知悉、接納並向本公司、本公司的聯席保薦人、整體協調人、顧問或承銷團成員表示同意： 倘在適當時候向香港公眾人士提出要約或邀請，有意投資者務請僅依據於香港公司註冊處處長註冊的本公 司招股章程作出投資決定。招股章程的文本將於發售期內向公眾人士提供。 (a) 本文件僅為向香港公眾人士提供有關本公司的資料，概無任何其他目的；投資者不應根據本文件中 的資料作出任何投資決定； (b) 在聯交所網站登載 ...

Investment Rating - The report maintains an "Overweight" rating for the electronics industry [1] Core Insights - The electronics industry continues to show strong performance in the first half of 2025, driven by the recovery in demand for smart terminals and the increasing need for AI computing power, with revenue and profit maintaining double-digit growth [2][89] - Each sub-sector has experienced rapid growth, particularly in AI-related segments such as PCB and CCL, which have shown remarkable performance and significant improvements in profitability [2][89] Summary by Sections 1. Performance Overview for H1 2025 - The total revenue for the electronics industry reached CNY 1,499.979 billion, a year-on-year increase of 20.17% - The net profit attributable to shareholders was CNY 577.88 billion, with a year-on-year growth of 28.95%, while the net profit after deducting non-recurring gains and losses was CNY 490.27 billion, up 32.31% year-on-year - The industry's gross margin was 13.15%, a decrease of 0.38 percentage points year-on-year, while the net margin improved by 0.30 percentage points to 3.76% [12][11] 2. Sub-sector Performance PCB Sector - PCB sector revenue for H1 2025 was CNY 112.217 billion, with a year-on-year growth of 25.32% - The net profit attributable to shareholders was CNY 10.805 billion, up 61.03% year-on-year - The gross margin reached 22.25%, an increase of 2.24 percentage points, while the net margin improved to 9.56%, up 2.13 percentage points [22][33] CCL Sector - CCL sector revenue totaled CNY 19.130 billion, reflecting a year-on-year increase of 26.23% - The net profit attributable to shareholders was CNY 1.627 billion, with a year-on-year growth of 52.37% - The gross margin was 21.16%, up 3.76 percentage points, and the net margin was 9.56%, an increase of 2.21 percentage points [38][49] Consumer Electronics Sector - Revenue in the consumer electronics sector reached CNY 811.048 billion, a year-on-year increase of 27.28% - The net profit attributable to shareholders was CNY 290.43 billion, with a year-on-year growth of 25.67% - The gross margin was 9.96%, a decrease of 0.61 percentage points, while the net margin remained stable at 3.69% [57][72] Panel Manufacturing Sector - The panel manufacturing sector reported revenue of CNY 186.838 billion, a year-on-year increase of 7.62% - The net profit attributable to shareholders was CNY 51.30 billion, with a year-on-year growth of 56.45% - The gross margin was 13.95%, a decrease of 0.32 percentage points, while the net margin improved to 1.64%, up 0.89 percentage points [73][85] 3. Investment Recommendations - The report suggests focusing on two main lines: AI computing power and AI terminals - The demand for computing power is expected to increase due to the training and application of large AI models, with significant capital expenditure from overseas tech giants and domestic support for local computing applications - The second focus is on AI terminals, with expectations for a surge in new product releases in the consumer electronics sector in the second half of the year, particularly in the Apple supply chain and AI glasses industry [2][89]

Core Viewpoint - The company Shenghong Technology has experienced a significant stock price surge due to its association with Nvidia, leading to a market capitalization exceeding 220 billion yuan, while also facing scrutiny over executive stock sales prior to its IPO [1][3]. Financial Performance - Shenghong Technology's revenue has shown consistent growth from 2022 to 2024, with figures of 7.885 billion yuan, 7.931 billion yuan, and 10.731 billion yuan, respectively, marking a 35.3% year-on-year increase in 2024 [4]. - Net profit for the same years was 791 million yuan, 671 million yuan, and 1.154 billion yuan, with a substantial 72% increase in 2024 [4]. - In Q1 2025, the company reported a revenue of 4.312 billion yuan, an 80.3% increase year-on-year, and a net profit of 921 million yuan, a staggering 339.2% increase [4]. - The sales volume of HDI products surged from 260 million yuan in Q1 2024 to 1.65 billion yuan in Q1 2025, reflecting a 533% increase [4]. Profitability Metrics - The gross margin improved from 18.1% in 2022 to 22.7% in 2024, with Q1 2025 reaching 33.4% [4][5]. - Net profit margin also increased from 10.0% in 2022 to 10.8% in 2024, with Q1 2025 showing a significant rise to 21.3% [4][5]. Market Position and Client Base - Shenghong Technology has positioned itself as a key supplier in the AI computing infrastructure sector, particularly for Nvidia's products, although it has not explicitly named Nvidia as a client [8][9]. - The company’s revenue from markets outside mainland China has consistently been high, accounting for 62.2%, 61.5%, and 60.9% from 2022 to 2024, increasing to 78.4% in Q1 2025 [5]. Executive Actions and Market Reactions - Despite strong performance, the company faces liquidity challenges, with cash and cash equivalents of 927 million yuan against short-term debts of 1.9 billion yuan [6]. - The company’s executives have been selling shares, raising concerns among investors, with significant sales totaling over 2.1 billion yuan in just three months [11][12][15]. - The company is planning to raise 1.9 billion yuan through a public offering, with funds allocated for projects in Vietnam and Thailand, as well as for operational liquidity [15][16]. Future Outlook - The company aims to expand its global manufacturing capabilities and enhance its technological infrastructure, but faces risks related to executive stock sales and customer concentration [15].

Core Viewpoint - The article discusses the rapid growth and challenges faced by Shenghong Technology, a PCB manufacturer, particularly in relation to its partnership with Nvidia and its upcoming IPO plans [1][3]. Group 1: Company Overview - Shenghong Technology, established in 2006 and listed in 2015, specializes in high-precision multilayer printed circuit boards (PCBs) and HDI PCBs [2]. - The company has seen significant stock price appreciation, rising from 41.79 CNY per share at the beginning of the year to 259 CNY per share by August 28, marking an increase of over 500% and a market capitalization exceeding 220 billion CNY [1]. Group 2: Financial Performance - Revenue for Shenghong Technology is projected to grow from 78.85 billion CNY in 2022 to 107.31 billion CNY in 2024, with a year-on-year growth of 35.3% in 2024 [4]. - Net profit is expected to increase from 7.91 billion CNY in 2022 to 11.54 billion CNY in 2024, reflecting a substantial year-on-year growth of 72% [4]. - In Q1 2025, the company reported a revenue of 43.12 billion CNY, a remarkable increase of 80.3% year-on-year, driven by a surge in HDI product sales [4]. Group 3: IPO and Capital Structure - Shenghong Technology has submitted a prospectus to the Hong Kong Stock Exchange for an IPO, aiming for a dual listing to enhance its capital structure [3]. - Despite strong financial performance, the company faces liquidity challenges, with cash and cash equivalents of 9.27 billion CNY against short-term debts totaling 19 billion CNY [6]. Group 4: Partnership with Nvidia - The partnership with Nvidia is seen as a critical factor in Shenghong Technology's recent growth, as the company has become a key supplier for Nvidia's AI acceleration products [8]. - Although Nvidia is not explicitly named in the company's disclosures, it is implied that Shenghong Technology plays a significant role in the supply chain for AI computing infrastructure [8]. Group 5: Management Actions and Market Sentiment - Concerns have arisen regarding the management's decision to sell shares while claiming the company's stock is undervalued, with significant insider selling amounting to over 2.1 billion CNY in just three months [13][17]. - The company is also planning to raise 1.9 billion CNY through a private placement to fund various projects, including AI-related initiatives in Vietnam and Thailand [17].

Group 1 - The PCB industry is experiencing continuous growth, with related concept stocks seeing significant price increases throughout the year [1] - Shenghong Technology, a leading PCB company, has a market capitalization exceeding 150 billion yuan and its stock price has surpassed 180 yuan per share, both reaching historical highs [1][5] - Shenghong Technology is planning to issue H-shares and list on the Hong Kong Stock Exchange to expand overseas production capacity and enhance its international influence [2] Group 2 - Shenghong Technology's revenue and profit have shown remarkable growth, with a reported revenue of 10.731 billion yuan in 2024, a year-on-year increase of 35.31%, and a net profit of 1.154 billion yuan, up 71.96% [4] - In Q1 2025, the company achieved a revenue of 4.312 billion yuan, a year-on-year increase of 80.31%, and a net profit of 921 million yuan, up 339.22% [4] - The company attributes its performance to the surge in AI computing demand and its strategic focus on high-value products, leading to a significant increase in order volume and profitability [4] Group 3 - The stock price of Shenghong Technology has risen significantly, with a closing price of 182.77 yuan per share on July 28, 2025, marking a 17.51% increase and a total market value of 157.7 billion yuan [5] - Since 2024, the company's stock price has increased by 917.65%, reflecting strong investor confidence and market performance [5]

Financial Data and Key Indicators Changes - The PCB industry in mainland China is experiencing rapid growth, becoming the largest production base globally due to the transfer of PCB capacity and the booming downstream electronic terminal manufacturing [12][22] - In 2023, the revenue for Huadian Co. was 89.4 billion, with a growth rate of 7%, while ShenNan Circuit's revenue was 135.3 billion, showing a decline of 3% [23] - Huadian Co. reported a net profit of 15.1 billion in 2023, an increase of 11%, while ShenNan Circuit's net profit decreased by 15% to 14.0 billion [23] Business Line Data and Key Indicators Changes - Huadian Co.'s PCB products focus on communication equipment, data center infrastructure, and automotive electronics, with AI server-related products accounting for 21.13% of its revenue [25] - ShenNan Circuit is engaged in high-end PCB design and manufacturing, with a focus on communication devices and data centers, while also expanding into automotive electronics [30] - Shengyi Technology's PCB products are heavily reliant on major clients like Huawei and ZTE, with a customer concentration of 42.28% in 2023 [31] Market Data and Key Indicators Changes - The demand for AI servers is driving PCB growth, with the market for HDI PCBs expected to reach $14.58 billion by 2027, growing at a CAGR of 6.2% from 2023 to 2028 [19][22] - The 800G optical module market is projected to grow significantly, driven by AI applications, with a forecasted CAGR of 11% over the next five years [17] - The PCB market is expected to continue growing due to the increasing complexity of AI models and the corresponding rise in computing power requirements [16][22] Company Strategy and Development Direction and Industry Competition - The PCB industry is moving towards high-density and high-performance designs, with companies like Huadian Co. and ShenNan Circuit focusing on technological innovation and quality improvement [25][30] - The competitive landscape is intensifying as major players expand their production capacities, leading to increased market competition [41] - Companies are investing in R&D to enhance their product offerings, with Huadian Co. maintaining a research expense rate of 6.03% in 2023, aligning with industry averages [25][30] Management's Comments on Operating Environment and Future Outlook - Management highlighted the rapid growth of AI applications as a key driver for the PCB market, emphasizing the need for advanced PCB technologies to meet increasing demands [16][22] - The management expressed concerns about macroeconomic risks and external environment uncertainties, particularly regarding geopolitical tensions affecting the industry [41] Other Important Information - The PCB industry is characterized by a wide range of applications, which helps mitigate development risks [12][22] - The main raw materials for PCB production are subject to price fluctuations based on global commodity markets, which poses a risk to profitability [41] Q&A Session Summary Question: What are the growth prospects for the PCB industry? - The PCB industry is expected to benefit from the increasing demand for AI applications and high-performance computing, with significant growth opportunities in the coming years [16][22] Question: How are companies managing risks in the current environment? - Companies are focusing on diversifying their client base and investing in R&D to mitigate risks associated with market competition and raw material price volatility [41]