Dongwei Technology (688700.SH) — Initial Coverage Report

AI-Driven PCB Upgrades; Electroplating Equipment Leader Approaching an Inflection in Volume

Key Data Snapshot

Metric	Value
Ticker	688700.SH
Rating	Buy (initial coverage)
Report date	December 25, 2025
Closing price	RMB 36.89
52-week high / low	RMB 48.56 / 23.51
P/B	6.1x
Free-float A-share market cap	RMB 11.008 billion
Total shares / free-float A-shares	298 / 298 million
Debt-to-assets	42.91%
Book value per share	RMB 6.0

Earnings Forecast & Valuation

Metric	2023A	2024A	2025E	2026E	2027E
Total revenue (RMB mn)	909	750	1,064	1,459	1,890
YoY growth (%)	-10.1%	-17.5%	41.8%	37.2%	29.5%
Net profit attributable to parent (RMB mn)	151	69	147	236	325
YoY growth (%)	-29.0%	-54.3%	112.5%	60.5%	37.3%
EPS (RMB/share)	0.51	0.23	0.49	0.79	1.09
Gross margin (%)	41.7%	33.5%	33.9%	35.5%	36.5%
ROE (%)	8.7%	4.0%	7.8%	11.2%	13.3%
P/E	55.9	158.9	74.8	46.6	33.9

Investment Thesis

I. A leading global electroplating equipment manufacturer

Competitive position:

Vertical continuous electroplating (VCP) equipment holds over 50% share in China
Downstream customers cover most top-tier domestic PCB manufacturers
Demand for high-end electroplating equipment may continue to grow amid AI server and overseas PCB capacity expansion

II. PCB cycle recovery; strong equipment demand

Industry data:

Per Prismark, global PCB output could grow 7.6% to USD 79.1 billion in 2025
18+ layer HDI / multilayer boards up 41.7%
2024–2029 industry CAGR expected around 5.2%

PCB equipment market:

Global PCB equipment market from ~USD 7.1 billion (2024) to USD 10.8 billion (2029)
Implied CAGR 8.7%
China PCB electroplating equipment market ~RMB 3.1 billion in 2024, +11.7% YoY

III. Product mix upgrade; profitability improvement

Key assumptions:

Revenue: Growth in high-layer count boards, HDI, and heavy copper drives electroplating equipment volume

Assume high-end printed circuit equipment revenue +60% / +45% / +33% YoY in 2025E–2027E

Gross margin: Multilayer boards require pulse equipment to improve via plating quality, driving equipment upgrades

Assume high-end printed circuit equipment gross margin rises to 35.3% / 37.0% / 38.0%

IV. Differentiated view vs. consensus

The market mostly frames growth via PCB capex, understating process upgrades as PCBs move to higher layer counts, heavy copper, and higher reliability—demanding consistency in plating, current control precision, and equipment stability. As pulse plating and continuous high-end processes penetrate, technical barriers and process fit become core differentiators.

Segment Forecasts

Segment	2022	2023	2024	2025E	2026E	2027E
Total revenue (RMB bn)	10.09	9.05	7.50	10.64	14.59	18.90
YoY	25.8%	-10.3%	-17.1%	41.8%	37.2%	29.5%
Gross margin	41.9%	41.7%	33.5%	33.9%	35.5%	36.5%

High-end printed circuit equipment

2025E revenue: RMB 786 million, +60% YoY
Gross margin: 35.3% (continued improvement)

Metal surface finishing

Steady revenue growth, ~6–10% YoY
Gross margin ~15–16%

New energy

Revenue down near term; expected to stabilize by 2027
Gross margin remains high ~48%

Catalysts

PCB customers raise capex plans
Faster penetration of high-speed / low-loss materials (e.g. M9) in PCBs
Faster-than-expected ramp of high-end equipment

Risks

PCB demand shortfall: If AI server / compute demand weakens or customer capex slows, release of high-layer and HDI demand may lag

Equipment ramp shortfall: Electroplating equipment tied to customer qualification, delivery, and overseas installation—delays could defer revenue recognition

Competition & pricing: Domestic substitution and new entrants may intensify competition

New materials / processes: Slower adoption or route changes could affect equipment demand and technology edge

Comparable valuation

Company	Ticker	Price	2024A P/E	2025E P/E	2026E P/E	2027E P/E
Utechzone	688630.SH	140.0	47.3	62.0	40.0	30.2
Han’s CNC	301200.SZ	124.3	50.5	76.1	46.4	32.5
Jietron	688392.SH	121.7	54.5	101.9	61.8	39.4
Average	—	—	50.8	80.0	49.4	34.0
Dongwei	688700.SH	36.9	126.9	74.8	46.6	33.9

Source: AJ Securities Research