Victory Giant's Thailand capacity expansion continues to progress, with AI PCB upgrades supporting Goldman Sachs maintaining a Buy

Overview

This report is based on Goldman Sachs’ visit to Victory Giant’s Thailand PCB factories during its technology inspection trip in Thailand and Vietnam from July 7 to 10. The core focus was the company’s Thailand capacity expansion, production efficiency, cost structure, and AI PCB upgrade opportunities. Management said Thailand capacity diversification is progressing as planned, and that the company is positive about expanding high-end PCB products at its Thai base to better support global frontline customer demand.

Core views

Goldman Sachs maintains a constructive view on Victory Giant’s growth prospects, mainly on the logic that AI infrastructure buildout is still ramping, AI PCB specification upgrades are improving unit value, and the company’s customer expansion and overseas capacity footprint are enhancing global supply capability. While Thailand’s production costs are currently higher than mainland China, the company believes customers are willing to pay more for diversified capacity, and it sees a medium-term goal of bringing gross margins for comparable products in Thailand closer to mainland China levels through automation, expanded CCL supplier capacity in Thailand, and improvements in local labor efficiency.

Analysis framework

The report combines field research and management interviews, analyzing Thailand A1/A2/A3 factory progress, output potential, product mix, cost differentials, customer qualification, and labor structure, and derives the 12-month target price from 2027E EPS and target P/E multiple.

Methodology notes

• Valuation methodstarget P/E multiple

  target P/E valuation

  Goldman applies a 26.3x target P/E to 2027E EPS to derive a 12-month target price of Rmb550. This target P/E comes from the relationship between peers’ P/E ratios and EPS growth for Victory Giant, and references the company’s 2028E EPS year-on-year growth.

• factor_profileGS Factor Profile

  Goldman Factor Profile

  Goldman discloses that its factor profile compares a stock with the market and sector peers across growth, return profile, valuation multiples, and composite indicators to provide investment context.

Asset mapping & comparison

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

• Victory Giant / Shenghong Technology (300476.SZ)

  The report’s coverage name, primarily benefiting from AI PCB upgrades and Thailand capacity diversification.

  Strengths

  Thailand capacity buildout is progressing as planned; A1 is in mass production and A2 is planned to begin mass production in Q3 2026; AI PCB customer qualification and global frontline customer demand are expected to drive growth.

  Weaknesses

  Thailand production costs are currently about 10%-20% higher than mainland China, and labor productivity is also lower than mainland China.

  Comparison

  Compared with a single mainland China capacity structure, the Thailand base helps meet part of global customers’ demand for manufacturing diversification; valuation uses a peer P/E and EPS growth relationship framework.

  Risks

  AI server shipment ramp-up slower than expected, AI server PCB specification upgrades slower than expected, and competition intensifying more than expected.

Key data

• Target priceRmb550Based on 26.3x target P/E and 2027E EPS.
• Disclosed current priceRmb284.92Victory Giant price shown in company-specific disclosure.
• A1 factory statusIn mass productionLocated in Thailand, Phra Nakhon Si Ayutthaya Province.
• A2 factory statusUnder construction, mass production target in Q3 2026Part of Victory Giant’s Thailand capacity expansion.
• A1 output scaleAbout 26% of 2025 revenueCompany disclosure.
• A2 and A3 output potentialSingle-factory output 40%-100% higher than A1Company disclosure.
• A1 product mixAbout 20% automotive PCB, remainder AI PCB-ready capacityAI PCB is currently in customer qualification.
• Thailand cost differentialAbout 10%-20% higher than mainland ChinaMainly because raw materials such as CCL mainly come from mainland China and bear over 10% tariffs.
• Thailand workforce sizeOver 1,400 employeesAbout 50% are Thailand-local employees, 25% from Myanmar, and 25% from mainland China.

Impact & implications

If Thailand capacity ramps smoothly and AI PCB customer qualification is completed, Victory Giant is expected to gain stronger share under global customer demand for supply-chain diversification, while also benefiting from value uplift driven by AI server PCB specification upgrades. Key uncertainties are the speed of cost and efficiency improvement in Thailand, customer qualification pace, and whether AI server shipments and specification upgrades proceed as expected.

Risks

• AI server shipment ramp-up is slower than expected.
• AI server PCB specification upgrades are slower than expected.
• The intensity of market competition is higher than expected.
• Thailand factory cost reduction and production efficiency gains are slower than expected.
• AI PCB customer qualification progress is slower than expected.

What to watch

• Whether A2 can be put into mass production as planned in Q3 2026.
• Capacity ramp pace and actual output realization for A1, A2, and A3.
• Progress of AI PCB customer qualification and order conversion.
• Progress of upstream supply-chain localization in Thailand, including CCL suppliers.
• Automation level and labor productivity improvement at Thailand factories.
• Trends in AI server shipments and PCB specification upgrades.