Nomura maintains Buy on Shengyi Technology and raises the target price to CNY195

Overview

This is a company research and rating change report on Shengyi Technology by Nomura. The core conclusion is that Shengyi Technology's 1H26 earnings preannouncement was strong. Benefiting from higher CCL prices, improved demand from AI PCB/CCL customers, product upgrades, and contributions from new capacity, Nomura maintains its Buy rating and significantly raises the target price.

Core views

Nomura believes Shengyi Technology has become one of the key leaders in the global AI CCL/PCB market and, with its execution capability and continued technological innovation, is still well positioned to keep gaining market share. Near-term earnings are driven by CCL price hikes and raw material shortages, while long-term growth comes from high-end technology roadmaps such as M9/M10 CCL and PTFE, as well as rising content value in AI infrastructure. On the PCB side, product upgrades at key ASIC customers are driving improved demand for HLC PCB, while customer diversification should help reduce concentration risk.

Analysis framework

The report uses earnings forecast revisions, segment revenue growth estimates, gross margin improvement assessments, comparisons with consensus expectations, and the P/E valuation method to assess the company's value. The target price is based on 43x 2027F EPS of CNY4.51 and references a FY26-28F earnings CAGR of 43%.

Methodology notes

• equity_valuationP/E multiple valuation

  P/E multiple valuation

  Nomura derives the target price of CNY195 using 43x 2027F EPS of CNY4.51 and raises the valuation multiple from the previous 32x to 43x.

• earnings_forecastforecast revision

  Earnings forecast revision

  The report raises FY26-28F revenue forecasts by 24.5%-50.1% and earnings forecasts by 38.7%-55.2%, mainly reflecting improvements in volume, ASP, and product mix in the CCL and PCB businesses.

Asset mapping & comparison

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

• Shengyi Technology 600183.SS

  Covered company

  Strengths

  One of the world's second-largest CCL manufacturers, gaining AI CCL/PCB market share, with strong technology roadmap reserves and high expected earnings growth in FY26-28F.

  Weaknesses

  Growth is highly dependent on demand from AI-related customers, the sustainability of CCL price hikes, and the pace of high-end product upgrades.

  Comparison

  Nomura's revenue forecast is 18%-40% above Wind consensus, and its earnings forecast is 31%-47% higher.

  Risks

  PCB demand downstream could come in below expectations or intensified competition in the CCL market could compress margins.

• CCL & Prepreg business

  Core growth engine

  Strengths

  Benefiting from CCL price hikes, raw material shortages, and upgrades in AI high-end materials, with FY26-28F revenue CAGR expected at about 40%.

  Weaknesses

  Sensitive to upstream supply-demand and pricing conditions for copper foil, fiberglass, and other materials.

  Comparison

  Expected to contribute about 67% of total sales in FY28F, making it the company's largest business segment.

  Risks

  If high-end CCL upgrades slow or competition intensifies, revenue and margin expansion could fall short of expectations.

• PCB business

  Second growth engine

  Strengths

  Product upgrades at ASIC customers are driving improved HLC PCB demand, while expansion among overseas and China AI server and switch customers could reduce concentration.

  Weaknesses

  Customer concentration still needs continued improvement.

  Comparison

  FY26-28F revenue CAGR is expected at about 48%, contributing about 28% of total sales in FY28F.

  Risks

  Demand in downstream areas such as 5G, servers, and automotive electronics falling short of expectations would affect orders and earnings.

Key data

• 1H26E net profit guidanceCNY3.1-3.3bnUp 117%-131% YoY.
• 1H26E recurring earnings guidanceCNY2.72-2.92bnUp 97%-112% YoY.
• Target priceCNY195.00Previously CNY95.00, based on 43x 2027F EPS.
• Closing priceCNY147.90Price date is 2026-07-14.
• Implied upside+31.8%Calculated from the target price relative to the current price.
• FY26-28F revenue forecast revision24.5%-50.1%Reflects stronger growth in CCL and PCB volume and ASP.
• FY26-28F earnings forecast revision38.7%-55.2%Benefiting from margin expansion driven by a higher mix of AI products.
• CCL & Prepreg revenue CAGRabout 40%Nomura expects this growth rate in FY26-28F, contributing about 67% of total sales in FY28F.
• PCB revenue CAGRabout 48%Nomura expects this growth rate in FY26-28F, contributing about 28% of total sales in FY28F.

Impact & implications

The investment implication of the report for Shengyi Technology is positive: in the short term, CCL price hikes and tight supply support revenue and gross margin; in the long term, AI infrastructure upgrades create room for expansion in high-end products; simultaneous upward revisions to earnings forecasts and valuation multiples significantly lift the target price from the previous level.

Risks

• Downstream PCB demand from sectors such as 5G, servers, and automotive electronics comes in below expectations.
• Competition in the CCL market intensifies, putting pressure on margins.
• The pace of product upgrades by major AI customers is slower than market or company expectations.
• If the raw material shortage and price hike thesis reverses, it could weaken ASP and gross margin expansion.

What to watch

• Whether CCL price hikes can continue in 2H26F.
• The pace of orders and product upgrades from AI PCB/CCL customers.
• Mass production progress of high-end material roadmaps such as M9/M10 CCL and PTFE.
• PCB customer diversification and improvement in customer concentration.
• Delivery of FY26-28F gross margin and earnings forecasts.