Shengyi Tech (600183) Report Interpretation

Overview

Goldman Sachs reiterates Buy on Shengyi Tech, arguing that accelerating global AI-server demand will expand the AI CCL market and allow the company to grow shipments, improve mix and gain share. The report pairs this demand outlook with Shengyi's production capabilities, full order book and planned Thailand and China capacity additions.

Core views

Goldman Sachs expects the AI CCL value TAM to grow 181% year-on-year in 2026E, 217% in 2027E and 115% in 2028E, reaching US$47.5bn in 2028E. Its demand thesis rests on rising AI-server shipments, upgrades in AI CCL specifications and industry capacity expansion. Higher-speed rack-level AI servers are expected to raise penetration of M9-and-above products, while next-generation rack-level AI-server mass production should provide a further demand driver. The report views Shengyi Tech as a key beneficiary of this trend because of its R&D and mass-production capabilities, which Goldman Sachs expects to support market-share gains. It notes that the order book remains full. On the supply side, the Thailand CCL plant is expected to start production in September 2026 and new China capacity is expected in 2027E; together these additions are expected to drive AI CCL shipment growth. For 3Q26E, Goldman Sachs forecasts revenue of Rmb13bn, up 59% year-on-year and 16% quarter-on-quarter, while gross margin is expected to remain above 30%. The report attributes the margin outlook to rising global AI-server end demand and a richer product mix toward AI CCL. It models net income growing at a 33% CAGR in 2026-30E, driven by AI CCL price increases as end demand rises, specification upgrades toward higher-speed server materials, and next-generation rack-level AI-server production. Goldman Sachs values Shengyi using a near-term P/E approach. It maintains a 50.4x target P/E on 2027E EPS and derives the multiple from the relationship between peers' P/E multiples and earnings growth, using Shengyi's expected 2027-28E EPS growth. This produces a 12-month target price of Rmb249.00, versus a stated price of Rmb143.93 as of 18 September 2026, implying 73.0% upside. The firm maintains Buy.

Analysis framework

The report starts with its forecast for global AI CCL market growth, then links that demand outlook to Shengyi's technology capability, order visibility and planned production expansion. It translates the thesis into near-term revenue and margin expectations and a longer-term net-income growth forecast, before applying a peer-growth-based target P/E multiple to 2027E EPS for valuation.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Forward P/E valuation based on peer P/E multiples and earnings growth

  Goldman Sachs applies a 50.4x 2027E target P/E to Shengyi's forecast EPS. The multiple is derived from the observed relationship between peers' P/E valuations and earnings growth.

• Industry AnalysisSupply-demand framework

  AI CCL demand growth and capacity expansion analysis

  The report connects AI-server shipment growth and material-specification upgrades with AI CCL demand, then assesses how Shengyi's Thailand and China capacity additions can meet that demand.

• Industry AnalysisVolume-price decomposition

  Shipment, pricing and product-mix drivers of earnings

  The earnings outlook is tied to higher AI CCL shipments, price increases from stronger end demand, and mix improvement toward higher-specification products.

Asset mapping & comparison

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

• Shengyi Tech (600183.SH)

  Primary covered company and expected beneficiary of rising AI CCL demand

  Strengths

  Strong R&D and mass-production capability, a full order book, and planned Thailand and China capacity additions.

  Comparison

  The target P/E is benchmarked against the relationship between peer P/E multiples and earnings growth.

  Risks

  Lower-than-expected AI infrastructure investment, lower-than-expected allocation, or a change in technology direction.

Key data

• AI CCL value TAM growth181%/217%/115% YoY in 2026E/2027E/2028EGoldman Sachs forecasts the market to reach US$47.5bn in 2028E.
• 3Q26E revenueRmb13bnForecast to rise 59% YoY and 16% QoQ.
• 3Q26E gross margin30%+Expected to remain elevated on AI-server demand and AI CCL mix improvement.
• 2026-30E net-income CAGR33%Driven by AI CCL pricing, specification upgrades and next-generation AI-server production.
• 12-month target priceRmb249.00Based on a 50.4x 2027E target P/E.
• Implied upside73.0%Calculated against the stated Rmb143.93 price as of 18 Sep 2026.

Impact & implications

The report argues that Shengyi's combination of AI CCL capabilities, order visibility and capacity expansion positions it to capture a larger share of growing global AI infrastructure demand. Higher-specification products and improving pricing are expected to support both shipment growth and profitability.

Risks

• Lower-than-expected AI infrastructure investment could reduce AI CCL demand.
• Lower-than-expected allocation could weaken the anticipated shipment opportunity.
• A change in technology direction could reduce the expected benefit from current AI CCL specifications.

What to watch

• Start-up of the Thailand CCL plant expected in September 2026.
• Progress of new China capacity expected in 2027E.
• AI-server demand, AI CCL pricing and penetration of M9-and-above products.
• Delivery of the forecast 3Q26E revenue growth and gross margin above 30%.