VGT(SZ:300476)2025-10-16 01:48Summary of Victory Giant Tech (300476.SZ) Conference Call Company Overview - Company: Victory Giant Tech (VGT) - Ticker: 300476.SZ - Market Cap: Rmb216.647 billion (approximately US$30.377 billion) [2] Key Financial Estimates - Earnings Estimates: - 2025: Rmb5.1 billion (down 8%) - 2026: Rmb11.7 billion (down 9%) - 2027: Rmb19.6 billion (down 7%) [1] - 3Q25 Net Profit Estimate: Rmb1.34 billion (QoQ +10%) [1] - Target Price: Rmb407.0 (down from Rmb447.0) based on a 30x 2026 P/E ratio [1][2] Revenue Drivers - NVDA Revenue Growth: Expected to grow by 2% QoQ to Rmb2.4 billion, influenced by a high base in 2Q25 and product transitions [1]. - New Capacity Impact: New capacity in Huizhou and Thailand is anticipated to drive revenue in 3Q25 but may negatively affect profitability due to yield ramp-up and depreciation & amortization (D&A) pressures [1]. Growth Projections - Sales Revenue Growth: - 2025: 97.4% - 2026: 90.6% - 2027: 51.7% [7] - Core NPAT Growth: - 2025: 343.4% - 2026: 128.6% - 2027: 67.3% [7] Valuation Justification - Earnings CAGR: Projected 96% from 2025 to 2027 driven by: 1. Strong demand for GenAI-related PCBs 2. Potential improvements in average selling price (ASP) and gross margin (GM) due to favorable product mix 3. New business opportunities in datacenter switches and ASICs [10] Risks - Key Downside Risks: 1. Lower-than-expected share allocation in GenAI-related PCBs due to yield issues 2. Pricing and competition pressures in the automotive supply chain 3. CSP capital expenditure reductions and weak economic conditions affecting demand 4. Rising material costs 5. US-China geopolitical risks [11] Investment Recommendation - Recommendation: Maintain Buy rating, with a potential buying opportunity expected post the deceleration in 3Q25 net profit growth [1]. Additional Financial Metrics - 2025 Estimated P/E: 42.3 - 2026 Estimated P/E: 18.5 - 2027 Estimated P/E: 11.1 [7] Conclusion Victory Giant Tech is positioned for significant growth driven by advancements in AI-related technologies and new capacity expansions. However, investors should remain cautious of potential risks that could impact profitability and market performance.