Significant Changes This Quarter (2026 Q1)
- Substantial Profit Surge: Shengyi Technology’s net profit attributable to shareholders reached 1.158B RMB in Q1 2026, a year-over-year increase of 105.47%, marking a strong performance.
- Better-than-Expected Gross Margin: The quarterly gross margin reached 28.1%, up 2.3 percentage points from the previous quarter and 3.5 percentage points year-over-year. This indicates that the company successfully offset the rising cost pressures of upstream raw materials (such as fiberglass cloth and copper foil) through product structural adjustments, such as increasing the proportion of high-end products, and price adjustments.
- Active Capacity Expansion and CAPEX: The company invested 5.2B RMB in expanding capacity, with a strategic focus on the AI server and automotive electronics sectors. The company continues to advance its “market-led, dual-drive” strategy to meet the robust demand for high-end computing circuit boards.
Outlook for Next Quarter (2026 Q2)
- Sustained Demand: Benefiting from the global AI server build-out boom, demand for high-end PCB and copper-clad laminate (CCL) continues to outstrip supply. Specifically, the demand from AI data centers for high-frequency, high-speed materials is expected to continue supporting the company’s capacity utilization rates.
- Capacity Release Effect: The capacity expansion plans initiated by the company are expected to come online successively in Q2 2026, helping to satisfy the urgent demand from customers for high-end computing circuit boards and further driving revenue and profit growth.
- Industry Pricing Environment: The market has observed tightening upstream material supply due to geopolitical factors and supply-demand constraints. If the upward trend in CCL prices continues, it will be conducive to the company maintaining its high-end margin performance.
Perspectives on EPS for the Coming Year
- Growth Drivers: As Shengyi Technology has not provided formal financial guidance, market analysts generally hold a positive stance. The primary momentum stems from the structural transformation brought about by the AI sector, specifically the “technology premium” effect resulting from an increased share of high-end products.
- Profit Trend: Assuming the company can successfully convert expanded capacity into actual revenue and maintain cost control amid raw material price volatility, it is expected that the company will continue to benefit from the explosive cycle of AI hardware demand over the next year. It is recommended to continue tracking product portfolio changes and capacity contributions from capital expenditures in subsequent quarterly reports.
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