AI Demand, Price Increases, and Mix Upgrade Drive Accelerating Growth at Shengyi Technology

Overview

Following Shengyi Technology's 1H26 results announcement, Nomura believes the company's growth has accelerated significantly. Results were driven by strong demand for AI copper-clad laminates and PCBs, price increases for both standard and AI copper-clad laminates, and an upgrade in product and customer mix toward the high end, resulting in a material improvement in profitability.

Core views

Nomura expects price increases driven by rising raw-material costs, including fiberglass and copper foil, to continue in 2H26, while high-end AI copper-clad laminates and PCBs remain in tight supply. As the customer mix shifts more rapidly toward AI customers, Shengyi Technology is expected to maintain strong growth momentum in 2H26 and beyond.

Analysis framework

The report assesses the company's earnings trend based on 1H26 and 2Q26 results, together with demand for AI copper-clad laminates/PCBs, product pricing, raw-material costs, and industry supply-demand dynamics, and uses a price-to-earnings valuation approach to set the target price.

Methodology notes

• Valuation methodsPrice-to-Earnings Valuation

  The target price is based on a 43x P/E multiple of expected 2027 earnings per share.

  Nomura applies a 43x P/E multiple to FY27F EPS of CNY4.51, deriving a CNY195.00 target price; this valuation is consistent with the 43% earnings CAGR expected from FY26 to FY28F.

• Fundamental AnalysisEarnings and Supply-Demand Analysis

  The earnings trend is assessed through revenue, net profit, gross margin, price increases, and supply-demand conditions for high-end products.

  The report attributes earnings growth to demand for AI copper-clad laminates and PCBs, price increases, and an upgraded customer mix, while focusing on the persistence of tight supply for high-end products.

Asset mapping & comparison

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

• Shengyi Technology (600183.SS)

  Directly Covered Company

  Strengths

  Beneficiary of demand for AI copper-clad laminates and PCBs; tight supply of high-end AI products; price increases and an upgraded customer mix support gross margin and earnings growth.

  Weaknesses

  Earnings are relatively sensitive to downstream PCB demand, pricing sustainability, and cost pass-through.

  Comparison

  Nomura believes the company is well positioned to benefit from technology upgrades in high-end AI copper-clad laminates and PCBs.

  Risks

  PCB demand from downstream markets such as 5G, servers, and automotive electronics may fall short of expectations; increased competition in the copper-clad laminate market could compress margins.

Key data

• 1H26 revenue year-on-year growth50%Company's 1H26 results.
• 1H26 net profit year-on-year growth130%Net profit was CNY3,287mn, at the high end of the CNY3,099mn to CNY3,298mn earnings guidance range.
• 2Q26 revenue/net profit year-on-year growth54% / 146.7%Quarter-on-quarter growth was 33.7% and 83.9%, respectively.
• 2Q26 gross margin32.63%Up 5.78 percentage points year-on-year and 4.53 percentage points quarter-on-quarter, reaching a record high.
• Target priceCNY195.00Based on FY27F EPS of CNY4.51 and a 43x P/E multiple.
• FY26 to FY28F earnings CAGR43%The growth basis supporting the valuation multiple.
• FY27F P/E31.8xThe trading valuation cited in the report.

Impact & implications

If price increases continue and supply-demand conditions for high-end AI products remain tight, the company's revenue growth, gross margin, and earnings leverage may continue to benefit. Achievement of the target price will still depend on downstream demand, pricing execution, raw-material cost pass-through, and the competitive landscape.

Risks

• PCB demand from downstream sectors such as 5G, servers, and automotive electronics may fall short of expectations.
• Intensified competition in the copper-clad laminate market could pressure pricing or margins.
• If rising raw-material costs cannot be effectively passed through to downstream customers, profitability may weaken.
• Tight supply of high-end AI copper-clad laminates and PCBs may ease, or price increases may prove less sustainable than expected.

What to watch

• The sustainability and magnitude of copper-clad laminate price increases in 2H26.
• Orders for AI copper-clad laminates and PCBs, customer-mix upgrades, and supply conditions for high-end products.
• Changes in raw-material costs, including fiberglass and copper foil, and the effectiveness of cost pass-through.
• Whether quarterly revenue, net profit, and gross margin sustain their high-growth and improving trends.
• Changes in demand from downstream sectors such as 5G, servers, and automotive electronics.