AI Demand, Price Increases, and Tight High-End Supply Drive Accelerating Growth at Shengyi Technology
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AI Demand, Price Increases, and Tight High-End Supply Drive Accelerating Growth at Shengyi Technology
Following 1H26 results, Nomura maintains its Buy rating and CNY 195 target price, believing that demand for AI CCLs/PCBs, raw-material-driven price increases, and shortages of high-end products will continue to improve growth momentum in the second half.
- 1H26 revenue and profit grew 50% and 130% YoY, respectively, with net profit of CNY 3,287mn, at the high end of the previously guided range.
- 2Q26 revenue and profit grew 54% and 146.7% YoY, respectively, and 33.7% and 83.9% QoQ, respectively.
- 2Q26 gross margin rose to a record high of 32.63%, up 5.78 percentage points YoY and 4.53 percentage points QoQ.
- Maintains the CNY 195 target price, based on 43x FY27F EPS of CNY 4.51; the report states that this valuation is consistent with a 43% FY26-28F earnings CAGR.
Report interpretation
Overview
After Shengyi Technology announced its 1H26 results, Nomura believes that the company’s growth is jointly driven by strong demand for AI CCLs and PCBs, price increases for both non-AI and AI CCLs, and an upgrade in product mix toward high-end customers. The report maintains a Buy rating and CNY 195 target price.
Core views
Nomura expects price increases driven by rising fiberglass and copper-foil costs to continue in 2H26F, while tight supply of high-end AI CCLs/PCBs will also persist. The company is expected to benefit from AI-related technology upgrades and greater AI business exposure, further improving operating momentum in the second half.
Analysis framework
Fundamental analysis based on interim performance, revenue and profit growth, quarterly gross-margin changes, downstream demand, and supply-demand assessments; the target price is derived by applying a P/E multiple to FY27F EPS.
Methodology notes
The target price is calculated using 43x FY27F EPS of CNY 4.51.
This valuation multiple is aligned with the report’s projected FY26-28F earnings CAGR of 43%.
The growth outlook is assessed by combining quarterly results, gross margin, demand, price increases, and supply conditions.
The report focuses on demand for AI CCLs/PCBs, tight supply of high-end products, and the pass-through of raw-material costs.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- 600183.SSCovered Company
- Strengths
- Strong demand for AI-related CCLs/PCBs, price increases, and product-mix upgrades support growth and margins; tight supply of high-end products is favorable for the company.
- Weaknesses
- Earnings are relatively sensitive to downstream demand, raw-material cost pass-through, and the sustainability of price increases.
- Comparison
- The report states that the share price trades at 31.8x FY27F EPS, below the 43x valuation multiple used for the target price.
- Risks
- Weaker-than-expected downstream PCB demand in 5G, servers, automotive electronics, and other sectors; intensifying competition in the CCL market that compresses margins.
Key data
- 1H26 Revenue YoY Growth50%Disclosed by the company after market close on August 14, 2026.
- 1H26 Profit YoY Growth130%Net profit was CNY 3,287mn, at the high end of the previously guided range of CNY 3,099mn-CNY 3,298mn.
- 2Q26 Revenue/Profit YoY Growth54% / 146.7%QoQ growth was 33.7% / 83.9%.
- 2Q26 Gross Margin32.63%A record high, up 5.78/4.53 percentage points YoY/QoQ, respectively.
- FY27F EPSCNY 4.51Basis for target-price valuation.
- FY26-28F Earnings CAGR43%Used to support the 43x FY27F P/E valuation.
Impact & implications
If AI-related demand, tight supply of high-end CCLs/PCBs, and price increases persist, the company’s revenue growth and gross margin may continue to benefit. Based on the CNY 143.21 closing price, the CNY 195 target price implies approximately 36.2% upside; however, achievement of this target price still depends on demand, competition, and delivery of earnings forecasts.
Risks
- PCB demand in downstream sectors such as 5G, servers, and automotive electronics is below expectations.
- Intensifying competition in the CCL market puts pressure on prices or margins.
- If rising raw-material costs cannot continue to be passed through downstream, earnings improvement may weaken.
- The sustainability of price increases and the degree of tight supply for high-end AI CCLs/PCBs may be below expectations.
What to watch
- The sustainability and magnitude of CCL and PCB price increases in 2H26F.
- The revenue contribution of AI-related products and progress in onboarding high-end customers.
- Changes in raw-material costs, including fiberglass and copper foil, and the effectiveness of cost pass-through.
- Whether quarterly gross margin can remain at a high level.
- Demand trends in downstream sectors including 5G, servers, and automotive electronics.