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2026-11-05 14:52:26 HSBC Global Investment Research published a research report stating that VICTORY GIANT TECHNOLOGY (02476.HK) (300476.SZ) is a key PCB supplier to NVIDIA and Google. Benefiting from demand for AI server PCBs, the broker forecast a 2026-2028 earnings CAGR of 58%, although below market expectations. It initiated coverage on both H/A shares with a Buy rating, setting a TP of HKD178 for the H shares and RMB187 for the A shares. The broker noted that according to Prismark, the global PCB market is expected to record a CAGR of 7% from 2026 to 2030, while demand growth for AI server PCBs is forecast at 18%. The proportion of AI server PCB demand in the global PCB market by value is expected to rise from 15% in 2026 to 22% in 2030. Leveraging its first-mover advantages in scale, technology and execution, VICTORY GIANT TECHNOLOGY is estimated to account for around half of NVIDIA's PCB supply, while NVIDIA is also expected to contribute half of the company's revenue in 2026. Revenue contribution from ASIC customers such as Google is also expected to increase gradually. Since the beginning of the year, the company's A/H shares have corrected about 55% and 61% respectively, underperforming the broader market, reflecting concerns over AI, risks that co-packaged optics (CPO) with higher data transmission density may reduce the value of AI server PCBs, and potential overcapacity in 2027. The broker believed these risks have largely been priced in and already incorporated into its relatively conservative earnings forecasts. It expected NVIDIA to remain the company's main growth driver in the coming years. The broker added that 3Q results missed market expectations mainly because shipment delays from key customers led to upfront costs and deferred revenue recognition. It expected earnings to rebound strongly in 4Q, supported by the ramp-up of NVIDIA Vera Rubin and improved yield rates. In terms of valuation, the broker derived the A-share TP based on a 2027 price-to-earnings ratio of 15.1x and EPS of RMB12.4, and then calculated the H-share TP of HKD178 based on a RMB/HKD exchange rate of 1.19 at end-2027 and an 80% discount of H shares to A shares. Major downside risks include customer concentration, oversupply of AI PCBs, normalization of AI demand, delays in customer ramp-up, and rising raw material costs. (da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |