J.P. Morgan initiates coverage on Victory Giant Technology-H, calling it a key beneficiary of the AI-driven upcycle in PCB value

Overview

This report marks J.P. Morgan’s initiation of coverage on Victory Giant Technology-H. The report argues that investment in AI training, inference, and data center infrastructure is significantly increasing demand for high-end PCBs, especially ultra-high multilayer PCBs and advanced HDI. As a global leading manufacturer of high-end PCBs, Victory Giant Technology has already established a leading share in AI- and high-performance-computing-related PCB markets and is poised to benefit from NVIDIA platform upgrades from Blackwell to Rubin/Rubin Ultra, rising demand from Google TPU and other ASIC projects, as well as its own capacity expansion and technology iteration.

Core views

The core views include: first, AI and high-performance computing are bringing structural growth to the PCB industry, and value growth matters more than simple shipment growth; second, Victory Giant Technology has competitive barriers in areas such as 14-layer-and-above MLPCB, 6+N+6 and above advanced HDI, and mass production capability for 70-layer-and-above MLPCB; third, the company’s long-term cooperation with global technology leaders allows it to participate earlier in customer R&D and collaborative design, strengthening its project win capability; fourth, despite market concerns about competition, yield on expanded capacity, and margin volatility, the report believes strong earnings delivery will ease concerns and drive valuation upside.

Analysis framework

The report combines a top-down analysis of AI/HPC PCB industry demand with bottom-up forecasts of company revenue, gross margin, expense ratio, and net profit. For valuation, the report uses 24x average forecast P/E for 2026-2027 as the target multiple and compares it with A-share PCB peers, global PCB peers, and the H/A-share discount level.

Methodology notes

• Industry demand analysisAI/HPC-driven PCB value growth framework

  Upgrades in AI servers and high-performance computing platforms raise requirements for PCB layer count, materials, signal integrity, and interconnect density, thereby increasing PCB value per rack.

  The report focuses on the application of ultra-high multilayer PCBs and advanced HDI in AI accelerator cards, servers, switches, general substrates, and optical modules, and cites Frost & Sullivan’s forecast for AI/HPC PCB market growth.

• Company competitiveness analysisTechnology, capacity, and customer three-factor framework

  The competitiveness of high-end PCB suppliers is jointly determined by advanced process capability, scaled delivery capability, and depth of collaboration with strategic customers.

  The report attributes Victory Giant’s leading position to its mass production of 70-layer-and-above MLPCB, commercialization of 24-layer HDI, overseas and domestic capacity expansion, and cooperation with global technology leaders in the early stages of R&D.

• Valuation methodForecast P/E valuation method

  The target price is based on 24x average forecast P/E for 2026-2027.

  This multiple is about 5% above the global peer average, but about 20% below the 2027 average for A-share PCB peers, and reflects the H/A-share discount backdrop in the technology sector.

Asset mapping & comparison

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

• 02476.HK

  Core coverage target, Victory Giant Technology-H in Hong Kong.

  Strengths

  Leading share in AI/HPC PCB, advanced HDI, and ultra-high multilayer PCB; possesses mass production capability for 70-layer-and-above MLPCB, commercialization of 24-layer HDI, and large-scale capacity expansion capability; close cooperation with global technology leaders.

  Weaknesses

  Relatively short listing history in H-shares, and the stock price has already risen significantly since the IPO; yield, utilization, and margin volatility exist during the capacity expansion period.

  Comparison

  Current H-shares trade at about a 6% discount to A-shares, below the average 16% H/A-share discount since 2026; target valuation is about 20% below the 2027 average for A-share peers.

  Risks

  Capacity expansion falls short of expectations, customer demand weakens, competition intensifies, raw material price fluctuations, and trade policy and geopolitical risks.

• 300476.SS

  The company’s A-share listed entity, used for H/A-share valuation comparison.

  Strengths

  The A-share entity also benefits from growth and earnings upgrades in the company’s AI PCB business.

  Weaknesses

  There are valuation premium/discount differences between A-shares and H-shares, and the market has concerns about competition and the sustainability of market share.

  Comparison

  The report notes that Victory Giant’s H-shares trade at about a 6% discount to its A-shares, versus an average H-share discount to A-shares of about 16% since 2026.

  Risks

  If A-share valuations decline or AI expectations cool, it may affect the relative valuation anchor for H-shares.

• US.NVDA

  An important downstream platform upgrade driver.

  Strengths

  Upgrades from Blackwell to Rubin/Rubin Ultra and subsequent platforms may raise PCB specifications and value.

  Weaknesses

  The report does not cover NVIDIA itself; related analysis is mainly used to explain Victory Giant’s demand sources.

  Comparison

  Victory Giant is regarded as one of the direct beneficiary suppliers for HDI and MLPCB projects during NVIDIA’s platform upgrade cycle.

  Risks

  Platform timing, supplier share allocation, or changes in technology roadmap may affect Victory Giant’s orders.

• US.GOOGL

  Customer lead tied to ASIC/TPU demand.

  Strengths

  The report mentions strong Google TPU demand, forecast at 4.3 million/6.9 million units in 2026/2027, which may bring HDI demand.

  Weaknesses

  Customer cooperation and share gains still require follow-up order validation.

  Comparison

  Compared with GPU platforms, ASIC customers may provide additional upside for Victory Giant.

  Risks

  There is uncertainty around technical specifications, supply chain selection, and mass production timing for ASIC projects.

Key data

• RatingOverweightInitiating coverage with an Overweight rating.
• Target priceHK$600.00Target price through June 2027.
• Current share priceHK$338.40Share price on June 8, 2026.
• Expected upsideapproximately 77.3%Calculated based on the HK$600.00 target price relative to the current share price of HK$338.40.
• 2026/2027/2028 revenue forecastRMB 35.5/60.0/84.2 billionEquivalent to a 2025-2028 revenue CAGR of 63%.
• 2026/2027/2028 net profit forecastRMB 9.0/17.2/25.6 billionEquivalent to a 2025-2028 net profit CAGR of 81%.
• 2025 revenueRMB 19.3 billionUp 80% year over year.
• 2025 gross margin35.2%Up 12.5 percentage points from 2024.
• 2025 HDI revenueRMB 7.4 billionUp 388% year over year.
• 2025 MLPCB revenueRMB 8.3 billionUp 35% year over year.
• 2026 capex planUp to approximately RMB 18.0 billion in fixed asset investmentThe report views this as a signal of a favorable order outlook.
• AI/HPC PCB market size forecastUS$15.0 billion in 2029Frost & Sullivan forecasts a 2025-2029 CAGR of 14.9%.

Impact & implications

If the report’s view plays out, the investment thesis for Victory Giant Technology-H will shift from pure AI-theme valuation expansion to joint support from sustained delivery in high-end PCB market share, ASP, gross margin, and earnings. For the supply chain, upgrades in AI computing platforms from NVIDIA, Google, and others may continue to boost the advanced HDI and ultra-high multilayer PCB supply chain; for investors, the key going forward is whether orders can be converted into high-quality delivery, whether yields on expanded capacity can ramp up, and whether competition and raw material costs will erode margins.

Risks

• Risks related to capacity expansion, order delivery, and demand slowdown: new production lines may be delayed, and if demand weakens, expansion costs may be difficult to fully recover.
• Intense competition in the global PCB industry: existing and new entrants may compress Victory Giant’s market share or margins through price, scale, R&D, and customer resources.
• Raw material price volatility and supply chain risk: in 2025 raw material costs accounted for 65.9% of cost of sales, and copper materials accounted for 60%-70% of PCB raw material costs; copper price fluctuations will affect profitability.
• International trade policy and geopolitical risk: changes in tariffs, export controls, and sanctions may affect business operations. Although direct exports to the U.S. account for less than 5% of revenue, indirect exposure still exists.
• Yield and utilization ramp-up risk during the expansion period: newly commissioned plants may cause short-term margin erosion in the early stage.

What to watch

• Whether net profit growth from 2H26 onward will accelerate significantly as the report forecasts.
• Victory Giant’s HDI and MLPCB share in NVIDIA Rubin/Rubin Ultra and subsequent platform projects.
• Whether Google TPU and other ASIC customer orders will bring incremental earnings contribution.
• The actual execution progress of the up to RMB 18.0 billion fixed asset investment in 2026, yield ramp-up, and capacity utilization.
• Whether HDI and MLPCB gross margins improve as forecast, especially whether consolidated gross margin of 38.3%/41.3%/42.5% in 2026-2028 can be delivered.
• Whether the H-share discount to A-shares continues to narrow, and whether market concerns about the AI PCB competitive landscape ease.