On the evening of August 16th, Sheng Hong Technology (300476.SZ) released its 2024 semi-annual report. Revenue and net profit both increased in the first half of the year, hitting a new high in the same period since going public. Main performance drivers include revenue growth from the merged MFS Group, high-end product production such as AI computing power, and cost reduction and efficiency improvement.

According to the financial report, Sheng Hong Technology achieved operating income of 4.855 billion yuan in the first half of the year, a year-on-year increase of 32.29%; net profit attributable to shareholders was 0.459 billion yuan, a year-on-year increase of 33.23%; net cash flow generated from operating activities was 0.654 billion yuan, a year-on-year increase of 40.43%.

Regarding the increase in revenue growth in the first half of the year, Sheng Hong Technology explained that the main reason was the acquisition of the company on November 30th, 2023, which resulted in consolidating their financial statements this year.

It is understood that the MFS Group acquired by Sheng Hong Technology was included in their consolidated financial statements in December 2023. According to the company's previous introduction, MFS Group's shipped products include soft board, hard board, and soft-hard combined board, mainly focusing on three high value-added areas: automotive, medical, and industrial control. Their products have high customer certification barriers and strong cooperation viscosity, with a relatively high gross margin.

In their semi-annual report, Sheng Hong Technology stated that after a series of strategic and management integrations, MFS Group's performance was impressive. In the first half of this year, MFS Group's revenue increased by 13% year-on-year, and net profit increased by 104% year-on-year. Among them, Q2 revenue hit a record high, and their outstanding performance helped the company to achieve growth.

In addition, Sheng Hong Technology has taken the lead in layout of emerging fields such as AI computing power, artificial intelligence, new energy vehicles, and datacenters in the first half of this year. High-end AI datacenter computing power products at 5-level and 6-level HDI and 28-layer acceleration card products (step gold finger) have smoothly entered mass production; 1.6T optical module has entered small-scale production.

Previously, industry insiders told the Financial Association News reporter that the market for PCBs used in servers has benefited from the rapid development of technologies such as cloud computing, big data, and artificial intelligence, and demand is steadily increasing. Especially with the acceleration of data center construction and the popularization of 5G technology, the demand for servers continues to rise, driving demand for high-performance PCBs.

The insider further stated that in terms of future development prospects, technological advances (such as higher layers and faster signal transmission) will further drive market demand, and it is expected that the server PCB market will continue to maintain a high growth rate.

Regarding the improvement and optimization of production capacity, Sheng Hong Technology stated that they have completed equipment optimization and transformation for high-precision HDI 5.0mm and high-layered PCB 8.0mm thick plates for AI servers, AI computing power, and optical transmission switching products. They have created capabilities for large-aperture blind hole filling and ultra-thin core board building, laying the foundation for the research and development of the next generation of AI servers, computing power, and communication products.