Horn Technology (603256) — Company Comment
High-Performance Electronic Glass Fabric Scaling Fast
Key Data Snapshot
| Metric | Value |
|---|---|
| Ticker | 603256.SH |
| Rating | Buy (maintain) |
| Report date | December 23, 2025 |
| Last close | RMB 32.38 |
| Total / free-float shares | 880 / 880 million |
| Total / free-float market cap | RMB 28.5 / 28.5 bn |
| 52-week high / low | RMB 44.89 / 7.25 |
| Debt-to-assets | 42.2% |
| Largest shareholder | Far East International Ltd. |
Earnings Forecast & Valuation
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Revenue (RMB mn) | 835 | 1,162 | 1,586 | 2,166 |
| Growth (%) | 26.24 | 39.27 | 36.48 | 36.54 |
| EBITDA (RMB mn) | 142.63 | 368.94 | 526.41 | 746.84 |
| Net profit to parent (RMB mn) | 22.80 | 187.85 | 302.17 | 473.68 |
| Growth (%) | 136.14 | 723.85 | 60.86 | 56.76 |
| EPS (RMB) | 0.03 | 0.21 | 0.34 | 0.54 |
| P/S | 35.71 | 25.64 | 18.79 | 13.76 |
| P/B | 20.55 | 18.22 | 15.38 | 12.36 |
| EV/EBITDA | 55.44 | 82.78 | 58.08 | 40.87 |
Investment Thesis
I. High-performance fabric mix rising; moat strengthening
Technology:
- Fabric thickness down to 8 μm
- Glass yarn filament down to 4 μm diameter
High-value products:
- Low Dk / low Df fabric & yarn
- Low-CTE fabric & yarn
- Among the few global suppliers with a full portfolio
High-performance fabric revenue share:
| Year | HP fabric as % of main revenue |
|---|---|
| 2022 | 0.6% |
| 2023 | 2.05% |
| 2024 | 1.5% |
| 1H25 | 13.54% |
1H25: AI servers & high-frequency comms drove RMB 74.12 mn HP fabric sales.
Applications: AI servers, 6G RF, high-end PCBs.
II. IPO projects: yarn + R&D; vertical yarn–fabric integration
- High-performance glass yarn capacity
- Capex RMB 720 mn
- Post-ramp: 1,254 t/yr yarn → 31.35 mn m/yr fabric equivalent
- Build 2 years; started 2025; full run-rate 1H28
- R&D center for specialty E-glass — RMB 92 mn
Integration benefits: secure yarn supply, faster R&D-to-product, richer mix, sustained differentiation.
III. Financial analysis
Profitability:
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Gross margin | 17.4% | 32.1% | 33.9% | 35.6% |
| Net margin | 2.7% | 16.2% | 19.0% | 21.9% |
| ROE | 1.6% | 11.5% | 15.6% | 19.6% |
| ROIC | 1.5% | 8.1% | 11.3% | 14.9% |
Growth:
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Revenue growth | 26.2% | 39.3% | 36.5% | 36.5% |
| Operating profit growth | 104.1% | 5,528.0% | 65.8% | 58.7% |
| Net profit growth | 136.1% | 723.8% | 60.9% | 56.8% |
IV. Valuation & positioning
- A-share PCB material peers 2025E P/S ~29.6x (iFind consensus)
- Horn 2025E P/S 25.64x
Positioning: differentiated, high-tech / high-margin fabric; yarn + fabric integrated; global mid-to-high tier E-glass fabric player. HP lines: low Dk/Df, low CTE, ultra-thin fabrics.
Financial Ratios Summary
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Solvency | ||||
| Debt-to-assets | 42.2% | 43.4% | 39.9% | 36.2% |
| Current ratio | 1.52 | 1.68 | 1.96 | 2.38 |
| Working capital | ||||
| AR turnover | 3.09 | 3.22 | 3.20 | 3.20 |
| Inventory turnover | 3.45 | 3.70 | 3.64 | 3.64 |
| Total asset turnover | 0.33 | 0.43 | 0.52 | 0.62 |
Risks
- Slower industry demand vs. recovery expectations
- Competition
- Raw materials & energy prices
- Concentrated raw-material purchasing
- R&D / technology risk
- Talent attrition
- Trade friction
- Gross margin volatility
- Inventory write-downs
- Receivables collection
- Operating cash flow volatility
- Fixed-asset impairment
Source: China Post Securities Research
