The company issued a fixed increase announcement. It plans to raise no more than 1.98 billion yuan in capital from no more than 35 specific issuers, and plans to invest in the following projects: 1) Vietnam's Shenghong artificial intelligence HDI project; 2) Thailand's high-multi-layer PCB project; 3) supplementary liquidity and bank loan repayment projects. Our review is as follows:

Vigorously increase overseas AI computing power and high-end PCB production capacity expansion to help the company's AI business grow rapidly. This time, the company plans to increase the amount of no more than 1.98 billion yuan to invest in the following projects: 1) Vietnam's Shenghong artificial intelligence HDI project, with a total investment of about 1.82 billion yuan. The construction period is expected to be put into operation for 3 years. It is expected to be put into operation in the third year, and all production will be completed by the fifth year. The plan is to produce 0.15 million square meters of high-end HDI products for AI; 2) Thailand's high-multi-layer PCB project, with a total investment of about 1.4 billion yuan, to be used to raise 0.5 billion yuan for construction Over a period of 2 years, it is expected that all production will be completed in the third year. The plan is to produce 1.5 million square meters of high-layer PCB products in the fields of servers, switches, consumer electronics, etc.; 3) To supplement working capital and bank loan repayment projects, it is proposed to raise 0.58 billion in capital to optimize the company's financial structure, thereby improving the company's resilience to risks and sustainable profitability.

According to the company's announcement, with the rapid development of AI technology and applications, AI systems, servers, storage, network equipment, etc. will become the main driving force for PCB demand growth in the next 5 years. With the upgrading of AI servers, GPU motherboards are showing a trend of gradually upgrading from high multi-layer to higher-level HDI, so HDI will be the fastest growing PCB product in the next 5 years (CAGR = 16.3% in 23-28 years), especially in demand for high-end HDI products above level 4. Furthermore, as server platforms are upgraded, PCBs for servers continue to evolve towards higher multi-layer boards. Based on existing cooperation with core strategic customers such as Nvidia, Tesla, and Amazon, the company focuses on high-end product requirements in the AI server field and meets customers' overseas delivery requirements for high-end multi-layer boards, which is expected to help the company maintain rapid future AI business growth.

Looking ahead to next year, with marginal recovery in the industry, card computing power and high-end demand from core automotive electronics customers, the release of production capacity is expected to show elastic performance. In the short term, the company's leading North American computing power customer orders will continue to be introduced. The competitive pattern will improve in the short term, and the share will continue to increase, which will drive the share of high-multi-layer and HDI product shipments to increase and product structure optimization; while the consumer electronics business accompanies the peak season in the second half of the year, the visibility of orders from downstream consumer customers will gradually increase, driving up capacity utilization, and profitability is expected to continue to improve. In the medium to long term, in the field of computing power, the company's Eagle level products have been mass-produced. High-end HDI and high-speed multi-layer boards used in AI servers have completed commercialization layout and customer certification. AI server acceleration cards, module cards, and optical module boards are expected to usher in batch shipments and contribute flexible performance in 24H2 and 25; in terms of automotive electronics, the company is already the main supplier of PCBs for T customers and has introduced many Tier 1 customers. The products cover autonomous driving, three electric vehicles, body domain control, vehicle radar boards, etc., and the share of acquired subsidiaries continues to increase. MFSS has entered the automotive soft board sector; in terms of graphics cards, shipments of high-margin new products continue to expand; demand in the consumer electronics sector is accelerating along with the trend of AI, and is expected to show a steady, moderate to positive trend this year and next year. At the same time, in the future, the company will continue to accelerate the global layout of production capacity in Vietnam, Thailand, Malaysia and other places in line with the needs of leading international customers.

Maintain an “overweight” investment rating. Considering the company's vigorous expansion of high-end overseas AI computing power production capacity and the future growth potential brought by the company's customer product layout in the computing power market, we predict that the company's 24-26 revenue will reach 10.99/14.06/16.17 billion, and net profit to mother will reach 1.13/1.61/1.99 billion, corresponding to the current share price PE of 35.5/25.0/20.2 times. We believe that the company has been deeply involved in the PCB field for many years and is actively deploying AI computing power, new energy and new energy vehicles. Currently, the company has successfully entered the supply chain of well-known international companies such as Nvidia, AMD, Intel, Tesla, Microsoft, Bosch, Amazon, Google, and Delta, and the high-quality core customer base drives the growth in the company's order demand. As global demand for AI computing power continues to be released, the company's product structure is expected to be further improved, and soft and hard boards will advance collaboratively to accelerate overseas production capacity layout. We are optimistic about the company's medium- to long-term production capacity expansion and product upgrade expectations, and maintain the “increase” investment rating.

Risk warning: Industry demand falls short of expectations; peer competition intensifies; customer development and order import fall short of expectations; exchange rate fluctuations.