Goldman Sachs maintains Buy rating for Victory Giant with target price Rmb550

Overview

This report is based on Goldman Sachs' review of Victory Giant's PCB plants in Thailand. It focuses on the progress of Thailand capacity expansion, local production efficiency, cost structure, AI PCB customer qualification, and product mix upgrades. Goldman Sachs believes the company’s Thailand capacity diversification is continuing as planned, helping it serve top global customers and continue benefiting from the expansion in AI servers and AI infrastructure.

Core views

Key views include: first, the Thailand A1 plant has entered mass production, A2 is planned to start mass production in Q3 2026, and A2 and A3 have higher output potential than A1; second, about 20% of A1 output is from automotive PCB, while the remaining capacity is being prepared to take AI PCB and is undergoing customer qualification; third, although Thailand production costs are 10%-20% higher than mainland China, customers are willing to pay, and management expects mid-term gross margins to move toward mainland China peer product levels through automation, CCL supplier expansion in Thailand, and labor productivity ramp-up; fourth, Goldman Sachs maintains a constructive view on the company's growth.

Analysis framework

The report is based on factory visits and management interviews during the Thailand/Vietnam tech tour, and judgment is made by considering capacity ramp progress, product mix, cost differences, customer demand, AI PCB upgrade trends, and peer valuation cross-links. Valuation is derived using a target P/E method, applying a target multiple of 26.3x to 2027E EPS to arrive at a 12-month target price of Rmb550.

Methodology notes

• Valuation methodstarget P/E method

  Determine the target multiple based on the correlation between peer P/E and EPS growth

  Goldman Sachs applies a target P/E of 26.3x to 2027E EPS; this target P/E comes from the correlation between Victory Giant's peer P/E and EPS growth, and references the company's 2028E EPS year-on-year growth.

• equity factor analysisGS Factor Profile

  Compare stock attributes across growth, return on capital, valuation multiples, and synthetic metrics

  According to partial disclosure, Goldman Sachs Factor Profile uses forward sales, EBITDA, EPS growth, ROE, ROCE, CROCI, and valuation multiples to compare the stock against the market and peer group in percentile terms.

Asset mapping & comparison

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

• 300476.SZ

  Research target

  Strengths

  Rising AI PCB demand, Thailand capacity diversification, and improving ability to support top global customers, with substantial potential upside to the target price.

  Weaknesses

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

  Comparison

  Goldman Sachs links the company valuation to peer P/E and EPS growth relationships, with a target P/E of 26.3x.

  Risks

  AI server shipment ramp slower than expected, AI server PCB specification upgrade slower than expected, and market competition more intense than expected.

Key data

• 12-month target priceRmb550Based on a target P/E of 26.3x and 2027E EPS.
• disclosed priceRmb284.92The company-specific disclosure shows Victory Giant at Rmb284.92.
• implied upsideabout 93.0%Roughly calculated from target price Rmb550 versus disclosed price Rmb284.92.
• A1 outputabout 26% of 2025 revenueThe company disclosed that A1 has entered mass production.
• A2 and A3 output potentialeach base is 40%-100% higher than A1From management discussions.
• Thailand production cost gapabout 10%-20% higher than mainland ChinaMainly because key materials such as CCL mainly come from mainland China and incur tariffs above 10%.
• Thailand workforce compositionmore than 1,400 employees; 50% local, 25% Myanmar, 25% mainland ChinaReflects the current personnel mix at the Thailand base.

Impact & implications

If Thailand capacity ramps as scheduled and AI PCB customer qualification is achieved, Victory Giant is expected to improve its ability to serve global customer supply-chain diversification and benefit from higher per-machine value driven by AI server PCB specification upgrades. The cost side is a near-term drag, but if automation, CCL supply-chain localization, and labor efficiency improvements are realized, the Thailand plant's gross margin is expected to converge toward mainland China peer product levels in the medium term.

Risks

• AI server shipment ramping is slower than expected.
• AI server PCB specification upgrades are slower than expected.
• Market competition intensifies more than expected.
• Cost declines and productivity improvements at Thailand plants are slower than expected.

What to watch

• Whether the A2 plant can start mass production as scheduled in Q3 2026.
• Progress of AI PCB customer qualification and order conversion.
• Progress in Thailand plant automation rate, labor efficiency, and CCL supply-chain localization.
• Whether Thailand plant gross margin can converge toward mainland China peer product levels.
• The pace of AI server demand and PCB specification upgrade.