Goldman Sachs maintains Buy on Shengyi Technology and raises 12-month target price to Rmb217.6

Overview

This report is Goldman Sachs' company research and rating adjustment on Shengyi Technology (600183.SS). The core conclusion is that the company is continuing to expand production in high-end copper clad laminate (CCL) for AI servers and is driving products toward high-end specifications of M9 and above through new materials, formulations, and process capabilities, thereby lifting revenue, gross margin, and earnings expectations.

Core views

Goldman Sachs believes Shengyi Technology's expansion in high-end CCL capacity and product mix upgrade will increase its benefit from the AI server value chain. The company's new capex plan is aimed at high-end CCL products, and if the production lines reach 100% utilization, management expects annual sales to reach Rmb9.3bn. The report maintains a Buy rating and significantly raises the target price.

Analysis framework

Starting from the increase in CCL value driven by AI server specification upgrades, the report combines the company's new capacity plans, product mix improvement, pricing environment, and changes in expense ratio to raise 2026-28E earnings forecasts; valuation uses 45.0x 2027E P/E to derive the 12-month target price.

Methodology notes

• Valuation methodsTarget P/E method

  Derives the 12-month target price of Rmb217.6 using 45.0x 2027E P/E.

  The target P/E multiple is based on the correlation between peer P/E and EPS growth, and reflects higher growth expectations after the company's 2027-28E EPS growth forecast was raised from 56% previously to 73%.

• Earnings forecastEarnings forecast revision

  Raises 2026-28E earnings forecasts by 8%/28%/29%.

  The upward revision is driven by higher shipments from new AI CCL capacity, more favorable CCL pricing, specification upgrades, and gross margin improvement from a higher share of high-end products.

• Research frameworkGS Factor Profile

  Compares stock characteristics across growth, financial returns, valuation multiples, and composite metrics.

  The appendix disclosure states that this framework uses analyst forecasts to standardize rankings of stocks on growth, financial returns, and valuation multiples, providing background reference for investment.

Asset mapping & comparison

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

• Shengyi Technology (600183.SS)

  Covered company in the report, Buy rating maintained

  Strengths

  Has plans to expand high-end CCL capacity, the ability to migrate to M9 and above products, and innovation capabilities in new materials, formulations, and processing technology.

  Weaknesses

  The earnings upgrade depends on the delivery of new capacity ramp-up, product mix upgrade, and a favorable pricing environment.

  Comparison

  The target P/E multiple is based on the correlation between peer P/E and EPS growth, and is higher than the company's historical average plus one standard deviation P/E.

  Risks

  If AI infrastructure investment, customer allocation, or technology path changes come in below expectations, revenue and valuation support may weaken.

Key data

• Report date2026-06-11The report date is 11 June 2026.
• RatingBuy (maintained)Goldman Sachs maintains a Buy rating.
• Target priceRmb217.612-month target price, versus previous Rmb146.3.
• Current priceRmb146.90Shengyi Technology price shown on the disclosure page.
• Capex planRmb5.2bnOf this, Rmb1.6bn is for plant construction and Rmb2.4bn is for equipment.
• Target annual capacity48m square meters / 38.4m sheetsWhen the high-end CCL production line reaches 100% utilization, management expects annual sales of Rmb9.3bn.
• AI server CCL value growth2026/27E YoY 142%/222%Driven by cabinet-level AI server upgrades to higher-speed specifications and increased value contribution from M9 and above products.
• Earnings forecast revision2026-28E raised by 8%/28%/29%Mainly due to higher revenue forecasts, gross margin improvement, and lower expense ratio.
• Target valuation multiple45.0x 2027E P/EAbove the company's average plus one standard deviation P/E, reflecting a positive view on AI CCL product mix upgrade.

Impact & implications

If demand for high-end AI server CCL and the company's capacity ramp-up materialize, Shengyi Technology is expected to gain earnings elasticity through product specification upgrades, higher value per sheet, and higher gross margin; the target price increase indicates Goldman Sachs views the company as a key beneficiary of the migration toward high-end CCL.

Risks

• AI infrastructure investment comes in below expectations.
• Customer or order allocation comes in below expectations.
• Changes in technology direction lead product demand or specification migration to fall short of expectations.

What to watch

• Progress of new capacity ramp-up in 2Q26 and follow-through on the subsequent Rmb5.2bn capex.
• Certification, adoption, and pricing performance of high-end M9 and above CCL products.
• Whether AI server specification upgrades deliver the expected increase in CCL value per unit.
• Whether improvements in gross margin and expense ratio can support the upward revision to 2026-28E earnings forecasts.
• Goldman Sachs' disclosed investment banking relationships and potential conflicts of interest.