BofA reiterates Victory Giant Buy rating, raises target price to CNY455

Overview

This report is Victory Giant's company research note released by BofA Securities after a conference in China. The core conclusion is that the company maintains a leading position in the AI server PCB supply chain, with capacity expansion, customer diversification, and technology upgrades jointly supporting an earnings upcycle. The report raises the target price from CNY400 to CNY455 and reiterates a Buy rating.

Core views

First, the pace of capacity expansion is faster than peers and matches key customers' product roadmaps, which the report believes will help the company extend its earnings cycle amid tight supply. Second, the customer mix is shifting from a prior Nvidia-heavy exposure toward major ASIC customers; ramp-up of new 20L+ MLPCB customers and progress in Thailand plant certification improve medium-term visibility. Third, Nvidia platform specification upgrades, customer diversification, and product-mix improvements are expected to offset depreciation and potential CCL cost pressure, supporting margin stability. Fourth, over the long term, backplane design changes and CoWoP technology migration may continue to support valuation across the AI server PCB supply chain.

Analysis framework

The report analyzes management feedback from the conference, capacity progress, customer expansion, product specification upgrades, slight earnings forecast adjustments, and relative valuation. The target price uses 2027E earnings as the valuation base and applies a 30x P/E to reflect the more meaningful contribution from Nvidia's Rubin platform and the company's position in a strong earnings cycle and industry leadership.

Methodology notes

• Valuation methodsP/E valuation

  30x 2027E P/E

  The CNY455 target price is based on 30x 2027E P/E. The report says this multiple is about 0.5 standard deviations above the company's 10-year trading mean and sits at the high end of the 25-30x 2027E P/E range for Chinese AI server PCB peers.

• Financial qualityiQmethod

  Business Performance and Quality of Earnings

  BofA Global Research uses iQmethod standard metrics to assess business performance and earnings quality, including ROCE, ROE, operating margin, EBITDA margin, cash conversion ratio, asset replacement ratio, tax rate, net debt-to-equity ratio, and interest coverage ratio.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Victory Giant / 300476 CH / XENEF

  Research target, core beneficiary in the AI server PCB supply chain

  Strengths

  Aggressive capacity expansion, key product share target above 50%, leading position on the Nvidia platform, expanding into major ASIC customers, and AI-related revenue mix expected to rise to 60-70% in 2026.

  Weaknesses

  Depreciation pressure from expansion; 2026E free cash flow is negative; gross margin forecast is below consensus; potential CCL cost increases may weigh on margins.

  Comparison

  30x 2027E P/E is at the high end of the 25-30x range for Chinese AI server PCB peers; the report says this is supported by the company's industry-leading position and earnings cycle.

  Risks

  Global AI cloud capex falls short of expectations, GPU platform upgrades are slower than expected, share loss, supply-chain bottlenecks, and worsening US-China tensions.

• AI server PCB supply chain

  Beneficiary theme and valuation mapping

  Strengths

  AI server specification upgrades, higher PCB content value, backplane design changes, and CoWoP technology migration may increase value across the industry chain.

  Weaknesses

  Industry valuation depends on AI capex and platform-upgrade pace; supply expansion could bring competition and pricing pressure.

  Comparison

  Victory Giant is positioned by the report as a leading company among Chinese AI server PCB peers, with its valuation multiple at the high end of the peer range.

  Risks

  A slowdown in AI cloud capex, server rack shipments constrained by supply-chain bottlenecks, and a worse-than-expected technology roadmap shift.

Key data

• Target priceCNY455Raised from CNY400 to CNY455.
• RatingBuyThe report reiterates a Buy rating.
• Valuation basis30x 2027E P/EUses 2027E as the valuation base to reflect a more meaningful contribution from Nvidia's Rubin platform.
• 2026E EPSCNY9.08Previously CNY9.17, down 1.0%.
• 2027E EPSCNY15.11Previously CNY15.10, broadly unchanged.
• 2028E EPSCNY23.12Previously CNY23.26, down 0.6%.
• 2026E revenueCNY33,425mnBofA forecast, 1.4% above 2026E consensus.
• 2027E revenueCNY55,001mnBofA forecast, 1.7% above 2027E consensus.
• 2028E revenueCNY77,990mnBofA forecast, 1.7% below 2028E consensus.
• 2026E net profitCNY8,670mnBofA forecast, 4.0% below 2026E consensus.
• 2027E net profitCNY14,852mnBofA forecast, 1.7% below 2027E consensus.
• 2028E net profitCNY22,718mnBofA forecast, broadly in line with 2028E consensus.
• AI-related revenue mix60-70% in 2026Management guidance; about 50% in 2025.
• Key product share50%+The company says it is confident key product share can stay above 50%.
• 2027 capacity planCNY140bnThe company reiterated its capacity expansion plan at the conference.
• 2026E P/E41.7xAs disclosed in the valuation table.
• 2027E P/E25.0xAs disclosed in the valuation table.
• 2028E P/E16.4xAs disclosed in the valuation table.

Impact & implications

If the report's view proves correct, Victory Giant will continue to benefit from higher PCB content value in AI servers, Nvidia platform upgrades, and ASIC customer expansion, extending earnings visibility into 2027-2028. The higher target price shows the analyst is placing greater emphasis on the company's leading position in a tight-supply and technology-upgrade cycle, but margins still need to be monitored for depreciation, CCL cost pressure, and supply-chain bottlenecks.

Risks

• Global AI cloud capex is slower than expected.
• GPU platform upgrades are slower than expected.
• The company materially loses market share to competitors.
• Supply-chain bottlenecks limit server rack shipments.
• Worsening US-China tensions.
• Depreciation burden and potential CCL cost increases may affect margins.

What to watch

• The ramp-up pace at Plant 4 and the capacity release after equipment move-in at Plant 10.
• Execution progress toward the CNY140bn capacity plan by 2027.
• Whether AI-related revenue mix reaches 60-70% in 2026.
• Ramp-up progress of new 20L+ MLPCB customers and potential HDI adoption.
• Final testing and mass-production progress after the Thailand plant receives certification from multiple ASIC customers.
• The timing of Nvidia Rubin platform contributions and the lift to PCB content value from specification upgrades.
• Net margin impact from CCL cost changes, depreciation pressure, and product-mix improvement.