Investment Rating - The report initiates coverage with an "Accumulate" rating for Ding Tai High-Tech (301377.SZ) [3][8]. Core Views - Ding Tai High-Tech is a leading global PCB drill needle manufacturer, achieving a market share of 26.5% in 2023, with a solid competitive position [1][14]. - The company's performance is expected to benefit from the synergy between AI computing power and technological innovation, leading to a continuous improvement in profitability [1][21]. - The entry into the robotics sector, leveraging its self-research capabilities, is anticipated to open new growth avenues for the company [2][8]. Company Overview - Ding Tai High-Tech focuses on providing integrated solutions in tools, materials, and equipment for PCB and precision machinery industries, with a significant revenue contribution from its drill needle and milling cutter products [14][15]. - The company has a comprehensive product portfolio, including tools, grinding materials, functional films, and intelligent CNC equipment, with the tool segment accounting for approximately 75.40% of revenue in 2024 [15][25]. Traditional Business - The PCB industry is experiencing a recovery driven by structural demand, particularly from AI and automotive electronics, which is expected to enhance the company's profitability [21][22]. - The company has established deep partnerships with leading PCB manufacturers, which is likely to further increase its market share [7][21]. Potential Growth Options - The company is positioned to benefit from the domestic replacement of high-precision grinding machines, which are currently reliant on imports, indicating significant market potential [7][22]. - Ding Tai High-Tech has been actively investing in R&D, with an average R&D expense ratio of 14% over the past three years, indicating a strong commitment to innovation [2][8]. Financial Forecast and Investment Recommendations - Revenue projections for Ding Tai High-Tech are estimated at 20.52 billion, 25.08 billion, and 30.14 billion yuan for 2025, 2026, and 2027, respectively, with corresponding net profits of 3.39 billion, 4.54 billion, and 5.54 billion yuan [8][9]. - The expected growth rates for revenue and net profit are 29.92% and 49.45% for 2025, respectively, reflecting the company's strong growth trajectory [8][9].

Core Viewpoint - The company, Ding Tai High-Tech, has experienced significant growth in revenue and profit due to the rising demand for high-value PCB products driven by AI technology and the increasing complexity of PCB designs [1][2][4]. Financial Performance - In 2024, Ding Tai High-Tech reported a revenue of 1.58 billion yuan, representing a year-on-year growth of 19.65%, with a net profit of 227 million yuan, up 3.45% [1]. - The company achieved a revenue of 423 million yuan in Q1 2023, marking a 27.21% increase compared to the previous year [2]. - For the first half of 2024, the revenue from tools reached 541 million yuan, a growth of 12.10%, while polishing materials generated 70 million yuan, up 28.58% [3]. Market Position - Ding Tai High-Tech holds approximately 26.5% of the global PCB drill market share, establishing itself as an "invisible champion" in the industry [2][3]. - The company has seen its market share in PCB drill sales increase from 19% at the time of its IPO in 2022 to the current level, reflecting its strong competitive position [3]. Product Development and R&D - The company has focused its R&D efforts on product iteration and advanced technology research, particularly in micro-drills for AI and semiconductor applications [5]. - In 2023, Ding Tai High-Tech invested around 100 million yuan in R&D, accounting for 6.94% of its revenue, and increased its R&D personnel from 348 to 373 [4]. - The company has developed key technologies for high-end chip substrates and continues to enhance its product offerings through ongoing R&D projects [4]. Global Expansion - Ding Tai High-Tech has been actively expanding its international presence, establishing production bases in Thailand and subsidiaries in Vietnam, and has set up a wholly-owned subsidiary in Germany to enhance its R&D and sales capabilities [6]. - The company's overseas revenue reached 92.66 million yuan, reflecting a 96.95% year-on-year increase, indicating strong growth in international markets [6]. Industry Trends - The rise of AI has created unprecedented opportunities for the PCB industry, with increasing demands for high-layer PCBs and advanced drilling technologies [4][5]. - The global tool market is estimated to be around 240 billion yuan, with China's market accounting for only one-fifth, suggesting significant growth potential for Ding Tai High-Tech in international markets [5].