Grandtech (001389.SZ) — Event Comment
Deep in Server PCBs; Positioned for AI Compute Upcycle
Key Data Snapshot
| Metric | Value |
|---|---|
| Ticker | 001389.SZ |
| Rating | Buy (initial) |
| Report date | September 25, 2025 |
| Price | RMB 82.3 |
| Market cap | RMB 35.0 bn |
| Total shares | 425 million |
| Free-float | 150 million |
| 52-week range | RMB 36.58–85.12 |
| Avg daily turnover | RMB 423.87 mn |
Earnings Forecast & Valuation
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Revenue (RMB mn) | 3,734 | 4,967 | 5,895 | 6,803 |
| Growth (%) | 39.4% | 33.0% | 18.7% | 15.4% |
| Net profit to parent (RMB mn) | 676 | 945 | 1,137 | 1,324 |
| Growth (%) | 63.0% | 39.8% | 20.2% | 16.5% |
| Diluted EPS (RMB) | 1.59 | 2.22 | 2.67 | 3.11 |
| ROE (%) | 22.0% | 24.3% | 23.2% | 21.7% |
| P/E | 51.8 | 37.0 | 30.8 | 26.4 |
| P/S | 9.4 | 7.0 | 5.9 | 5.1 |
| P/B | 11.4 | 9.0 | 7.1 | 5.7 |
Investment Thesis
I. Strong 1H25; digitization & Huangshi turnaround
1H25:
- Revenue RMB 2.425 bn, +42.17% YoY
- Net profit RMB 492 mn, +53.91% YoY
- Recurring net RMB 478 mn, +47.78% YoY
2Q25:
- Revenue RMB 1.308 bn, +41.96% YoY, +17.08% QoQ
- Net profit RMB 251 mn, +44.13% YoY, +4.51% QoQ
- Recurring net RMB 245 mn, +41.53% YoY, +5.17% QoQ
Margin: 2Q25 gross 37.46%, +3.22 ppt YoY, +2.27 ppt QoQ
Drivers: (1) strong compute supply chain demand; (2) digital / technical upgrades; (3) Huangshi Grandtech back to profit.
II. AI PCB cycle; server PCBs fastest-growing PCB vertical
Global PCB:
- 2025E output USD 79.128 bn, +7.60% YoY
Sub-segments: 18+ layer MLBs +41.70%; HDI +12.90%; packaging substrates +7.60%
Servers: highest application growth; 2029E server PCB output USD 18.9 bn; 2024–2029 CAGR 11.6%
III. Server focus; capacity coming online
Business: multilayer PCBs for mid-to-high-end markets — servers, consumer, industrial, security, comms, auto.
Servers ~70% of sales — HPC, AI training, storage, switches, etc.
Tech: 46-layer mass production; 7th-order HDI qualified; strong co-design with customers.
Utilization: Guangzhou >90% 1H25; Huangshi >80%; Thailand started Jun-25, Phase I full run ~RMB 2 bn revenue potential.
Financial Appendix
Balance sheet (RMB mn)
| Item | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Current assets | ||||
| Cash & equivalents | 721 | 1,637 | 2,754 | 4,127 |
| Receivables | 1,305 | 1,225 | 1,211 | 1,118 |
| Inventory | 459 | 529 | 523 | 544 |
| Other current | 364 | 390 | 385 | 380 |
| Current assets total | 2,849 | 3,781 | 4,874 | 6,169 |
| Non-current | ||||
| PPE | 1,782 | 2,054 | 2,098 | 2,038 |
| Construction in progress | 740 | 490 | 390 | 390 |
| Intangibles | 163 | 155 | 147 | 139 |
| Non-current total | 2,837 | 2,851 | 2,787 | 2,720 |
| Total assets | 5,686 | 6,631 | 7,662 | 8,888 |
Cash flow (RMB mn)
| Item | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Operating CF | 796 | 1,214 | 1,368 | 1,630 |
| Investing CF | -1,124 | -22 | 55 | 60 |
| Financing CF | 1,243 | -123 | -125 | -132 |
| Net change in cash | 915 | 1,069 | 1,298 | 1,558 |
Key ratios
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Revenue growth | 39.4% | 33.0% | 18.7% | 15.4% |
| Net profit growth | 63.0% | 39.8% | 20.2% | 16.5% |
| Gross margin | 33.4% | 36.0% | 36.0% | 36.0% |
| Opex / revenue | 9.9% | 11.9% | 11.9% | 11.9% |
| Net margin | 18.1% | 19.0% | 19.3% | 19.5% |
| ROE | 22.0% | 24.3% | 23.2% | 21.7% |
| Debt-to-assets | 45.9% | 41.2% | 35.9% | 31.4% |
| Asset turnover | 0.7 | 0.7 | 0.8 | 0.8 |
| AR turnover | 2.9 | 4.1 | 4.9 | 6.1 |
| Inventory turnover | 5.4 | 6.1 | 7.3 | 8.1 |
Risks
- Thailand datacom PCB ramp below plan
- Sharper competition in AI PCBs
- Weaker AI capex / demand
Source: Huaxin Securities Research
