Summary of Han's CNC Technology Conference Call Company Overview - **Company Name**: Han's CNC Technology - **Ticker Symbols**: 3200.HK (H-share), 301200.SZ (A-share) - **Industry**: PCB (Printed Circuit Board) Equipment Manufacturing - **Market Position**: Leading PCB drilling equipment maker in China with a global market share of 6.6% in 2024, potentially reaching 10-11% [35][39] Core Insights - **Earnings Forecasts**: - 2025E earnings revised up by 18% and 2026E by 21% due to stronger-than-expected preliminary results for 2025 [1] - Target price for A-shares raised by approximately 14% to Rmb160, while H-shares initiated at Buy with a target price of HK$142 [1][41] - **Market Demand**: - Anticipated growth in AI PCB equipment revenue by 134% YoY to Rmb4.0 billion in 2026E and 72% YoY to Rmb6.9 billion in 2027E [1] - Global AI PCB Total Addressable Market (TAM) expected to increase by 101% YoY to Rmb96.3 billion in 2026E and 81% YoY to Rmb174.1 billion in 2027E [1] - **Market Share**: - Han's CNC's market share in AI PCB equipment projected to be 19% in 2026E and 20% in 2027E [1] Equipment Insights - **Ultrafast Laser Drilling Equipment**: - Currently used by Chinese PCB makers for mSAP PCBs but has not passed certification for HDI in AI servers [2] - Higher average selling price (ASP) of Rmb5 million-6 million compared to Rmb3 million for CO2 laser drilling raises concerns about client retention [2] Financial Metrics - **Revenue and Profit Projections**: - Revenue expected to grow from Rmb5.706 billion in 2025E to Rmb8.902 billion in 2026E, with net profit projected to rise from Rmb829 million to Rmb1.424 billion [18] - Gross profit margin (GPM) expected to stabilize around 34% in 2026E [18] Risks and Considerations - **Investment Risks**: - Rated as High Risk due to potential volatility in share price, but mitigated by strong earnings visibility from AI PCB demand [38] - Downside risks include weaker-than-expected demand, rising component costs affecting GPM, and increased price competition [38][43] - Upside risks include stronger demand and favorable product mix changes [38] Valuation - **Target Price Justification**: - Target price of Rmb160 for A-shares and HK$142 for H-shares based on a P/E ratio of approximately 53x for 2026E, reflecting a 55% earnings CAGR for 2026E-27E [37][42] Conclusion - Han's CNC Technology is positioned to benefit from the growing demand for AI PCB equipment, with strong earnings growth anticipated. However, investors should remain cautious of potential risks that could impact performance and valuation.

Summary of Key Points from the Conference Call Industry Overview - **Construction Machinery**: - According to the China Construction Machinery Association (CCMA), domestic excavator shipment/export volume increased by **61%** and **40%** year-over-year (YoY) in January 2026, attributed to a low base effect from January 2025 [1][4][11]. - The tower crane leasing rate index decreased by **6%** week-over-week (WoW) as the Chinese New Year (CNY) low season approaches, but remains **15%** higher than the same period last year, marking the third consecutive week of YoY increase [1][12]. - **Factory Automation**: - Ta Liang Technology (3167.TW), a Taiwanese peer of Han's CNC, reported a **120%** YoY revenue growth in January 2026, up from **61%** and **53%** in December 2025 and November 2025 respectively, indicating strong demand for PCB drilling equipment from AI PCB manufacturers [1][8][10]. Company Insights - **Top Picks in Construction Machinery**: - Recommended companies include: - Zoomlion (1157.HK) - Sany Heavy (6031.HK) and Sany Heavy Equipment International Holdings Company Ltd (631.HK) - In the AI PCB and Apple equipment theme: - Han's Laser (002008.SZ) and Han's CNC (301200.SZ) - For humanoid robots: - Hengli Hydraulic (601100.SS) [1]. - **Price Adjustments**: - THK (6481.T) announced a **10%** increase in the average selling price (ASP) of all ball screw products effective from February 2, 2026, to reflect rising raw material and operating costs. This follows similar price hikes by SKF and Schaeffler in January 2026 [2]. Upcoming Events - A business update call with Sany International (631.HK) is scheduled for **10 AM HKT on February 12, 2026**, focusing on how rising commodity prices may benefit mining equipment [1]. Additional Notes - The ball screw is estimated to account for approximately **2%** of total revenue in 2026E for THK [2]. - The report emphasizes the importance of monitoring the construction machinery and factory automation sectors for potential investment opportunities, especially in light of the recent positive data points and company performance metrics [1][2].

Summary of Han's CNC Technology (301200.SZ) Conference Call Company Overview - **Company Name**: Han's CNC Technology (HC) - **Ticker**: 301200.SZ - **Industry**: PCB (Printed Circuit Board) Equipment Manufacturing - **Market Position**: Leading PCB equipment supplier in China with a global market share of 6.6% in 2024, potentially reaching 10-11% [23][24] Key Financial Highlights - **4Q25 Revenue Growth**: Estimated at 64% YoY, leading to a projected revenue of Rmb1,644 million [2][11] - **Net Profit**: Expected to increase by 117% YoY to Rmb213 million in 4Q25 [2] - **Gross Profit Margin (GPM)**: Anticipated expansion of 5.8 percentage points YoY, reaching 34.2% in 4Q25 [2][11] - **Earnings Forecast**: - 2025E Net Profit: Rmb705 million - 2026E Net Profit: Rmb1,179 million - 2027E Net Profit: Rmb1,666 million [4][10] Product and Market Dynamics - **Ultrafast Laser Drilling Equipment**: Recently started deliveries, with an average selling price (ASP) of US$800k and a gross profit margin (GPM) exceeding 50% [1] - **Mechanical vs. Laser Drilling**: Demand for mechanical drilling remains strong, as evidenced by capacity expansions from leading drill bit manufacturers [3] - **Competitors**: Notable competitors include Ta Liang (3167.TW) and China Tungsten and Hightech Materials (000657.SZ) [3][17] Investment Strategy - **Rating**: Buy/High Risk - **Target Price**: Rmb140, implying a potential upside of 17.4% from the current price of Rmb119.30 [5][10] - **Expected Total Return**: 18.1%, including a dividend yield of 0.8% [5] Risks and Considerations - **High Risk Rating**: Potential risks include weaker-than-expected demand for AI PCB equipment, rising component costs affecting GPM, and increased price competition due to supply increases in the industry [26] Conclusion - Han's CNC is positioned to benefit from the ongoing AI PCB super cycle, with strong revenue and profit growth expected in the coming years. The company remains a top pick in the automation and machinery sector in China, supported by robust demand for its products and strategic market positioning [1][24]