VGT(SZ:300476)2025-10-29 02:51Summary of Victory Giant (300476.SZ) 3Q25 Earnings Call Company Overview - Company Name: Victory Giant (VGT) - Ticker: 300476.SZ - Sector: Technology - Date of Report: 27 October 2025 Key Financial Highlights - Revenue: CNY 5.1 billion, up 79% year-on-year (y-y) and 7.8% quarter-on-quarter (q-q) [1][4] - Earnings: CNY 1.1 billion, up 260% y-y but down 9.9% q-q [1][4] - Gross Profit Margin (GPM): Increased by 12 percentage points (pp) y-y to 35.2%, but decreased by 3.6 pp q-q [1][4] - Research and Development (R&D) Expense: Increased by 93% y-y to CNY 254.8 million, contributing to a decline in net margin by 4.2 pp q-q [2][4] Core Insights - Sequential Growth: The company achieved sequential top-line growth, but the earnings decline may disappoint investors given the strong market sentiment around AI infrastructure spending [1][2] - AI PCB Contribution: The increase in GPM is attributed to higher contributions from AI-related products, specifically High Density Interconnect (HDI) and High Layer Count (HLC) products [1][4] - Capacity Ramp-Up: The decline in GPM q-q is likely due to the ramp-up of capacity in overseas production, leading to short-term cost pressures [1][4] Future Outlook - Proactive R&D Investment: The significant increase in R&D spending is expected to strengthen the company's position with global AI customers, particularly NVIDIA [2][4] - Target Price: The target price remains at CNY 392, based on a price-to-earnings (P/E) ratio of 45x for FY26F EPS of CNY 8.72 [2][3] - Current Trading: The stock is currently trading at 39x FY26F EPS [2][3] Risks and Challenges - Supply Chain Diversification: Key customers may diversify their supply chains, posing a risk to the company [11] - Intensified Competition: Increased competition from peers could impact market share [11] - Technology Changes: Innovations such as COWOP may alter the competitive landscape [11] - Geopolitical Tensions: Escalating geopolitical issues could pose additional risks [11] Additional Notes - Analyst Ratings: The stock is rated as "Buy" with a target price of CNY 392 [3][10] - Closing Price on Report Date: CNY 340.32 [3][10]