J.P. Morgan initiates coverage on Victory Giant Technology - H: a core beneficiary of the AI PCB cycle, target price HK$600

Overview

This is a J.P. Morgan initiation report on Victory Giant Technology - H (02476.HK). The report believes that demand for AI infrastructure and high-performance computing is driving global expansion in high-end PCB capacity, especially for high-layer-count MLPCBs and high build-up HDIs. Victory Giant Technology has already established a leading share in the AI PCB niche market and is benefiting from rising PCB content value through its technical capabilities, capacity expansion, and long-term cooperation with global technology leaders.

Core views

The core views include: first, upgrades in AI servers, accelerator cards, and data center equipment are bringing structural growth to high-end PCBs; second, Victory Giant Technology has globally leading share and mass-production capability in high-layer-count MLPCB and HDI; third, NVIDIA platform upgrades and ASIC projects such as Google TPU may bring incremental revenue and profit; fourth, the market may be underestimating the expansion of PCB content value and the company's ability to maintain share; fifth, strong earnings delivery and upward revisions to consensus expectations are likely to become catalysts for the share price.

Analysis framework

The report analyzes the company from six dimensions: industry demand, company competitiveness, capacity investment, customer projects, earnings forecasts, and relative valuation. It first assesses the pull from AI/HPC on PCB specifications and value, then evaluates Victory Giant Technology's technology and share advantages in HDI and MLPCB, and finally supports the target price with forecasts for revenue, gross margin, expense ratio, and net profit.

Methodology notes

• Valuation methodP/E relative valuation

  24x average 2026-27E EPS

  The target price of HK$600 is based on 24x average 2026-27E EPS, representing about a 20% discount to the average 2027E valuation of A-share PCB peers and about a 5% premium to the global peer average.

• Industry analysisAI/HPC PCB demand framework

  Growth in high-end PCB content value

  Through AI servers, GPU platform upgrades, ASIC projects, and high-performance computing demand, the report concludes that the MLPCB and HDI markets will grow faster than the overall PCB market.

• Earnings forecastRevenue-gross margin-expense ratio model

  High-growth forecast for 2025-28E

  Combining HDI/MLPCB revenue growth, product mix improvement, gross margin expansion, and scale effects, the report forecasts 2025-28E net profit CAGR of 81%.

Asset mapping & comparison

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

• 02476.HK（胜巨科技-H）

  Core coverage target and direct beneficiary of the AI high-end PCB cycle.

  Strengths

  Leading share in AI/HPC PCB, high-layer-count MLPCB, and high build-up HDI; possesses mass-production capability in high-layer-count MLPCB and HDI; long-term cooperation with global technology leaders; large-scale capacity expansion in 2026 shows order visibility.

  Weaknesses

  During the capacity ramp-up period, yield rate, utilization rate, and gross margin may fluctuate; the stock price has already risen substantially since listing; the market is concerned that competition may lead to share loss.

  Comparison

  H-shares trade at about a 6% discount to A-shares, lower than the average H-share discount of about 16% versus A-shares in 2026; target valuation implies about a 20% discount to A-share PCB peers and about a 5% premium to the global peer average.

  Risks

  Capacity expansion execution, delivery fulfillment, weaker-than-expected demand, intensified competition, raw material price fluctuations, and international trade policy risks.

• NVDA.US（NVIDIA CORP）

  An important downstream platform upgrade driver, but not a rated target in this report.

  Strengths

  Upgrades from Blackwell to Rubin/Rubin Ultra and subsequent platforms increase the specifications and value content of high-end PCBs.

  Weaknesses

  Victory Giant Technology's benefit from the relevant platform cycle depends on project timing, share, and customer supply chain arrangements.

  Comparison

  Compared with traditional PCB demand, NVIDIA platform upgrades require higher standards for HDI, MLPCB, and high-speed interconnect specifications.

  Risks

  If the pace of GPU platform upgrades, AI capital expenditure, or supply chain onboarding changes, PCB order timing may be affected.

Key data

• Current share priceHK$338.40The report price date is 2026-06-08.
• Target priceHK$600.00Jun-27 target price.
• RatingOverweightInitiated coverage with an Overweight rating.
• 2026/27/28E revenueRmb35.5bn / Rmb60.0bn / Rmb84.2bnCorresponding 2025-28E revenue CAGR is 63%.
• 2026/27/28E net profitRmb9.0bn / Rmb17.2bn / Rmb25.6bnCorresponding 2025-28E net profit CAGR is 81%.
• AI and high-performance computing PCB share13.8%Victory Giant Technology ranked global No.1 in 1H25.
• High-layer-count MLPCB share16.2%Victory Giant Technology ranked global No.1 in 1H25.
• High build-up HDI share44.6%Victory Giant Technology ranked global No.1 in 1H25.
• 2026 capital expenditure planUp to Rmb18bn for PPEHigher than Rmb6.4bn in 2025, which the report views as a positive signal for the order outlook.
• Overall gross margin forecast38.3% / 41.3% / 42.5%Corresponding to 2026/27/28E, respectively.
• Global AI and HPC PCB market growth2025-29E CAGR 14.9%Forecast by Frost & Sullivan.

Impact & implications

The report has a positive investment implication for Victory Giant Technology - H: if the AI server and platform upgrade cycle continues, the company is likely to benefit simultaneously from demand expansion, PCB specification upgrades, higher value content, and share retention. On valuation, J.P. Morgan believes current market concerns about competition and gross margin volatility are excessive, and strong future earnings delivery may drive valuation recovery.

Risks

• Capacity expansion execution may fall short of expectations, and yield and utilization ramp-up may cause gross margin volatility.
• Customer delivery fulfillment or AI demand may fall short of expectations.
• Competition in the global PCB industry may intensify, potentially causing share or pricing pressure.
• Raw material price fluctuations and supply chain risks.
• International trade policy, tariffs, and geopolitical tensions.
• The onboarding pace of new customers or ASIC projects may be slower than expected.

What to watch

• Whether net profit growth accelerates as expected in the report in 2H26, especially after 3Q26.
• Order share of HDI and MLPCB during NVIDIA's upgrade from Blackwell to Rubin/Rubin Ultra.
• Whether Google TPU and other ASIC customer projects bring additional revenue upside.
• Construction, yield, utilization, and delivery fulfillment of the Rmb18bn-level PPE capacity expansion.
• Whether a higher revenue mix of HDI and MLPCB continues to drive overall gross margin upward.
• Changes in the H-share discount relative to A-shares, and the valuation gap versus A-share and global PCB peers.