Kinwong (603228.SH) — Event Comment
Deepening AI PCB Exposure; Adding High-End Capacity for AI Demand
Key Data Snapshot
| Metric | Value |
|---|---|
| Ticker | 603228.SH |
| Rating | Buy (initial) |
| Report date | September 29, 2025 |
| Price | RMB 63.28 |
| Market cap | RMB 59.6 bn |
| Total shares | 942 million |
| Free-float | 933 million |
| 52-week range | RMB 24.08–75.56 |
| Avg daily turnover | RMB 1,206.55 mn |
Earnings Forecast & Valuation
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Revenue (RMB mn) | 12,659 | 14,981 | 17,705 | 20,893 |
| Growth (%) | 17.7% | 18.3% | 18.2% | 18.0% |
| Net profit to parent (RMB mn) | 1,169 | 1,475 | 1,925 | 2,415 |
| Growth (%) | 24.9% | 26.2% | 30.5% | 25.4% |
| Diluted EPS (RMB) | 1.25 | 1.57 | 2.04 | 2.56 |
| ROE (%) | 10.2% | 11.9% | 14.2% | 16.1% |
| P/E | 50.5 | 40.4 | 31.0 | 24.7 |
| P/S | 4.7 | 4.0 | 3.4 | 2.9 |
| P/B | 5.2 | 4.9 | 4.5 | 4.0 |
Investment Thesis
I. AI PCB mix; structural earnings lift
Data center / cloud:
- Hyperscaler capex still strong; many AI server designs
- Tight supply in high-speed materials, advanced HDI, HLC, etc.
1H25 highlights:
- Faster AI server ramp
- High-density HDI capability progressing
- 800G optics PCB volume up; stable mass supply to leading optics customers
- Zhuhai Jinwan HLC / SLP lines under tech upgrade
Automotive:
- #1 global automotive PCB supplier in 2024 (per report)
- ADAS / in-cabin AI → more content; global footprint ramping
II. Core AI PCB supplier; capacity for next-gen
1. High-end mass production
1H25: data-center / AI / HPC / high-speed optics — advanced HDI, PTFE rigid-flex, high-speed FPC, multilayer PTFE, 112G switch high-layer boards in volume; server backplane, 1.6T optics PCBs major technical progress; pre-R&D on OKS, 224G switches, etc.
2. Qualifications & orders
Long-term ties with global leaders; AI server, optics, high-speed switch, AR/VR qualifications converting to orders.
3. Premium capacity
Years of investment in HLC / HDI and FPC; ~RMB 10 bn total planned; global sites sequentially coming online.
Zhuhai Jinwan — additional ~RMB 5 bn:
- Retrofit — multilayer bottlenecks; new AI-server HDI line; 2H25 in service
- New advanced HDI plant — ground 2H25, production mid-2026
- Key processes — extra land; start early 2027, in production within 2027
Financial Appendix
Balance sheet (RMB mn)
| Item | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Current assets | ||||
| Cash & equivalents | 2,184 | 3,032 | 3,940 | 5,301 |
| Receivables | 4,402 | 4,104 | 4,123 | 4,007 |
| Inventory | 1,742 | 1,770 | 1,709 | 1,701 |
| Other current | 1,125 | 1,211 | 1,197 | 1,169 |
| Current total | 9,452 | 10,117 | 10,969 | 12,178 |
| Non-current | ||||
| PPE | 7,460 | 7,389 | 7,650 | 7,885 |
| CIP | 785 | 1,110 | 1,110 | 1,110 |
| Intangibles | 302 | 292 | 282 | 273 |
| Non-current total | 9,791 | 10,035 | 10,286 | 10,512 |
| Total assets | 19,244 | 20,153 | 21,255 | 22,690 |
Cash flow (RMB mn)
| Item | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Operating CF | 2,290 | 2,412 | 2,645 | 3,291 |
| Investing CF | -2,003 | -254 | -261 | -235 |
| Financing CF | 562 | -575 | -751 | -942 |
| Net change in cash | 849 | 1,582 | 1,633 | 2,114 |
Key ratios
| Metric | 2024A | 2025E | 2026E | 2027E |
|---|---|---|---|---|
| Revenue growth | 17.7% | 18.3% | 18.2% | 18.0% |
| Net profit growth | 24.9% | 26.2% | 30.5% | 25.4% |
| Gross margin | 22.7% | 22.1% | 22.2% | 22.3% |
| Opex / revenue | 12.5% | 10.6% | 9.5% | 8.8% |
| Net margin | 9.2% | 9.8% | 10.9% | 11.6% |
| ROE | 10.2% | 11.9% | 14.2% | 16.1% |
| Debt-to-assets | 40.3% | 38.5% | 36.1% | 33.7% |
| Asset turnover | 0.7 | 0.7 | 0.8 | 0.9 |
| AR turnover | 2.9 | 3.6 | 4.3 | 5.2 |
| Inventory turnover | 5.6 | 6.6 | 8.1 | 9.6 |
Risks
- Macro shocks
- Lower AI capex / demand
- Premium PCB competition
- Capacity build delays
Source: Huaxin Securities Research
