UBS raises Han's Laser's target price to Rmb193.30 and reiterates a Buy rating

Overview

This is a UBS company research report on Han's Laser. The report's core conclusion is that Han's Laser's H126 preliminary results significantly exceeded expectations, with strong performance across major business lines, especially PCB equipment and consumer electronics equipment; after updating its business assumptions, UBS substantially raised its 2026-28E earnings forecasts and increased its 12-month target price from Rmb92.00 to Rmb193.30, while maintaining a Buy rating.

Core views

UBS believes Han's Laser's growth cycle over the next 2-3 years remains sustainable. PCB equipment is benefiting from AI & HPC applications, high-end HDI, mSAP, 1.6T optical module processing, and capacity expansion by Chinese PCB manufacturers, with revenue CAGR for 2025-28 expected to reach 62%. Consumer electronics equipment is being driven by the product innovation cycle of its largest customer, Apple, and the expansion of laser application scope, with revenue CAGR for 2025-28 expected to reach 50%. As the revenue mix of high-margin PCB and consumer electronics equipment rises, blended gross margin is expected to improve by 6 percentage points over 2025-28.

Analysis framework

The report uses a review of the earnings preannouncement, revisions to segment revenue forecasts, verification of industry demand and customer capex, updates to product mix and gross margin assumptions, and a relative PE valuation approach. UBS incorporated the H126 earnings beat, capacity expansion by PCB manufacturers, Apple's new product cycle, 3D printing equipment revenue timing, and AI exposure in other businesses into its model, ultimately raising revenue, earnings, and valuation multiples.

Methodology notes

• Valuation methodsrelative PE methodology

  Relative PE valuation

  UBS derives the target price using a relative PE approach, raising the target PE multiple from 26x to 35x, and states that this multiple still corresponds to 1.2x PEG.

• growthPEG ratio

  PEG valuation cross-check

  The report matches the target PE with the compound earnings growth rate over the next two years, arguing that the 35x target PE corresponds to about 1.2x PEG, and that valuation remains attractive at the current 24x 2027E PE and 28% EPS CAGR.

• earnings_forecastsegment forecast revision

  Segment forecast revision

  UBS separately adjusted forecasts for PCB equipment, consumer electronics equipment, batteries, pan-semi, general purpose laser, and fiber businesses, and reflected product mix improvements in its gross margin assumptions.

Asset mapping & comparison

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

• Han's Laser Technology Industry (002008.SZ)

  Core covered name; UBS maintains a Buy rating and raises the target price.

  Strengths

  A leading player in China's laser-related equipment market and technology; expected to be the world's largest PCB equipment supplier in 2025; growth across PCB, consumer electronics, battery, pan-semi, and general purpose laser equipment.

  Weaknesses

  Growth is highly dependent on PCB manufacturers' capex, Apple's product cycle, and the ramp-up pace of new businesses; net profit was once expected to decline 30% in 2025.

  Comparison

  The report says the company trades at 24x 2027E PE, below its closest comparable companies, but with higher 2026-28E earnings CAGR.

  Risks

  PCB manufacturers' capex coming in below expectations, weaker-than-expected recovery in consumer electronics demand, slower-than-expected development in new energy, and Han's Laser's products failing to meet market demand.

• Han's CNC

  Han's Laser's PCB equipment subsidiary and an important vehicle for PCB equipment growth.

  Strengths

  Its products have been recognized by leading AI PCB players; in 2025 it shipped Rmb1.27bn to Victory Giant, accounting for 20% of the latter's total capex; Q226E NPM is about 20%.

  Weaknesses

  Profitability improvement depends on the mix of higher value-added equipment and penetration with AI PCB customers.

  Comparison

  Q226E NPM is about 20%, above 10% in Q225 and 17% in Q126.

  Risks

  AI PCB expansion pace, customer procurement share, and high-end equipment penetration may fall short of expectations.

• Han's Matrix

  Han's Laser's subsidiary responsible for 3D printing.

  Strengths

  Han's Laser decided to inject Rmb20m of capital into it and confirmed a Rmb113m equity incentive plan, showing the group's commitment to the 3D printing business.

  Weaknesses

  Part of the 2026E 3D printing equipment revenue recognition schedule is slower than previously assumed, with more revenue now expected to be deferred to 2027E.

  Comparison

  Combined 2026-27E 3D printing equipment revenue is expected to reach Rmb5.5bn, 31% above the previous forecast of Rmb4.2bn.

  Risks

  Uncertainty around the expansion of 3D printing equipment applications, customer mass production timing, and revenue recognition timing.

Key data

• 12-month ratingBuyUBS maintains a Buy rating.
• Target priceRmb193.30Raised from Rmb92.00 to Rmb193.30.
• Current priceRmb130.30Price date is July 10, 2026.
• Forecast share price upside48.3%Forecast dividend yield is 0.4%, with forecast total return of 48.7%.
• H126 net profit growth156.1%-176.6% YoYSignificantly above UBS and Reuters consensus expectation of about 109% YoY.
• H126 PCB equipment revenue growth>100% YoYDriven by demand for high-precision back drilling, ultrafast laser drilling, high-end HDI, and mSAP.
• H126 consumer electronics equipment revenue growth>180% YoYThe report believes this was mainly driven by demand related to its largest customer, Apple.
• 2026-28E earnings forecast revision+22-74%Reflects a 16-40% upward revision to revenue forecasts and a 2-4 percentage point increase in blended gross margin assumptions.
• 2026/2027 net profit growth forecast151% / 90%The report expects net profit to return to high growth in 2026 and 2027 after a 30% decline in 2025.
• 2027E PE24xUBS believes this is low relative to the closest comparable companies.

Impact & implications

The report has a clearly positive impact on Han's Laser: the target price was raised by more than double, earnings forecasts were significantly upgraded, and the company is positioned as a beneficiary of AI PCB capacity expansion, Apple's innovation cycle, and the expansion of laser equipment applications. If PCB manufacturers' capacity expansion and the new consumer electronics product cycle materialize, the company's revenue mix and margins may continue to improve; however, after the valuation uplift, investment returns still depend on order sustainability, customer capex, and product delivery capability.

Risks

• PCB manufacturers' capital expenditures coming in below expectations.
• Recovery in downstream consumer electronics demand being weaker than expected.
• Development of the new energy business being slower than expected.
• Han's Laser's products failing to meet market demand.
• Apple's product innovation cycle or procurement demand falling short of expectations.
• Penetration of equipment related to AI PCB, high-end HDI, mSAP, and 1.6T optical modules progressing more slowly than expected.

What to watch

• Progress of PCB equipment orders and AI PCB customer penetration from H226 to 2028.
• Delivery of 2026 capital expenditures by major PCB manufacturers such as Victory Giant and Avary.
• Adoption pace of Apple's new products and processes such as foldable screens, titanium, 3D printing, and VC cooling.
• Whether the upward revision to consumer electronics equipment revenue for 2027-28E can be delivered.
• Whether blended gross margin improves as the mix of higher-margin PCB and consumer electronics businesses increases.
• The speed at which AI exposure in batteries, pan-semi, general low-power laser, and fiber businesses converts into revenue.