WUS Printed Circuit's 2Q net profit guidance beats expectations; Citi maintains Buy and Rmb189 target price

Overview

This report is a company research update by Citi on WUS Printed Circuit (002463.SZ). The key event is the company's release of 2Q26 net profit and adjusted net profit guidance, both of which were significantly above Citi's forecast and buy-side expectations. Citi believes the outperformance was mainly driven by a favorable product mix, overseas capacity ramp-up, and the Thailand factory turning profitable, and expects year-on-year revenue and net profit growth to accelerate further in 2H26.

Core views

Citi's core view is that WUS has the highest growth visibility among the companies in its PCB coverage. Volume growth from GenAI-related PCB demand, 1.6T switches, and new AI accelerator platforms, together with overseas capacity expansion, will drive high growth in 2026-2028. The report maintains its 2026/2027 net profit forecasts at Rmb6.7bn/Rmb12.1bn and derives a Rmb189 target price using 30x 2027E P/E.

Analysis framework

The report starts with the company's 2Q26 earnings guidance, compares it with Citi's forecast, the VA consensus estimate, and buy-side expectations, assesses the earnings trend based on quarter-on-quarter and year-on-year growth, capacity ramp-up, product mix, and AI platform demand, and derives the target price using a 2027E P/E valuation framework.

Methodology notes

• Valuation methodsP/E valuation

  30x 2027E P/E

  Citi applies a 30x 2027E P/E multiple to WUS to derive a Rmb189 target price, based on expected 86% earnings CAGR in 2026-2028, GenAI-related PCB demand, ASP/gross margin improvement from the product mix, and strong execution capabilities.

• Scenario analysisBull/Base/Bear

  Bull/Bear scenario valuation assumptions

  The report uses 25x 2028E P/E in the bull case, 30x 2027E P/E in the base case, and 10x 2028E P/E in the bear case amid concerns over peak earnings.

Asset mapping & comparison

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

• WUS Printed Circuit (002463.SZ)

  Core coverage name; benefits from GenAI-related PCB demand and overseas capacity ramp-up

  Strengths

  2Q26 net profit guidance beat expectations, the Thailand factory turned profitable, product mix improved, AI-related PCB growth visibility is high, and expected earnings CAGR in 2026-2028 is high.

  Weaknesses

  Valuation depends on the realization of high growth, while some demand and share allocation are affected by CSP capital expenditure and the pace of AI platform deployment.

  Comparison

  Citi believes WUS has the highest growth visibility among the companies in its PCB coverage.

  Risks

  GenAI-related PCB share below expectations, pricing and competitive pressure in the automotive supply chain, CSP capital expenditure cuts, weak economic conditions, rising material costs, and US-China geopolitical risks.

Key data

• 2Q26 net profit guidance midpointRmb1.673bnUp 35% quarter on quarter and 82% year on year, 8% above Citi's forecast and 11% above the VA consensus expectation.
• 2Q26 adjusted net profit guidance midpointRmb1.642bnUp 41% quarter on quarter and 83% year on year.
• 2026/2027 net profit forecastsRmb6.7bn / Rmb12.1bnCiti maintains its previous forecasts.
• Target priceRmb189.000Based on 30x 2027E P/E.
• Current priceRmb124.660As of 15:00 on July 13, 2026.
• Expected share price return51.6%Plus an expected dividend yield of 0.4%, implying an expected total return of 52.0%.
• Market capitalizationRmb239,891M / US$35,438MFrom the report's valuation table.
• Current trading valuationApproximately 20x 2027 CitiE EPSCiti believes this remains attractive relative to growth visibility.

Impact & implications

The investment implications of the report are positive: the 2Q26 guidance beat reinforces WUS's growth visibility in the AI PCB supply chain, while the Thailand factory turning profitable and overseas capacity expansion improve earnings quality. If 1.6T switches and new AI accelerator platforms ramp up as expected, earnings growth in 2H26 and subsequent years could continue to accelerate.

Risks

• GenAI-related PCB share allocation falls below expectations.
• The automotive supply chain faces pricing and competitive pressure.
• CSP capital expenditure cuts or weak macroeconomic conditions lead to lower demand.
• Rising material costs compress profitability.
• US-China geopolitical risks.
• Catalysts or related share price reactions may fall short of expectations.

What to watch

• Whether year-on-year revenue and net profit growth accelerate further in 2H26 as Citi expects.
• The profitability of the Thailand factory and the progress of overseas capacity ramp-up.
• The ramp-up pace of 1.6T switches and new AI accelerator platforms.
• GenAI-related PCB share allocation and changes in ASP/gross margin.
• Changes in CSP capital expenditure and the sustainability of AI hardware demand.