Many investors still view PCB manufacturing as a traditional electronics sector, but JPMorgan believes that with the rapid acceleration in AI server deployment, high-performance computing, and data center construction, the PCB industry is undergoing an unprecedented cycle of value enhancement. Within this cycle, Victory Giant Technology (Huzhou) Co., Ltd. is positioned to be among the world's core beneficiaries. In its latest initiation report, JPMorgan assigned an Overweight rating to the company's H-shares with a target price of HK$600, implying significant upside from current levels. More importantly, the bank forecasts the company's net profit to grow at a compound annual growth rate of 81% from 2025 to 2028, a rate exceptionally rare within the tech hardware sector.
Key Drivers of the Bullish Stance
In essence, JPMorgan's thesis is that AI is shifting the growth driver for PCBs from volume expansion to price and value appreciation. For years, the PCB industry was a mature manufacturing sector, with growth largely tied to end-market sales of smartphones, PCs, and automobiles. The AI era introduces a fundamentally different dynamic. The extreme computational demands of AI servers, increasingly complex chips, and the need for faster internal data transfer necessitate a corresponding upgrade in PCB technology. Standard PCBs used in conventional servers are no longer sufficient, requiring new products with higher layer counts, greater density, and lower signal loss. The value per unit of these advanced PCBs far exceeds that of traditional boards.
JPMorgan specifically highlights that the transition from Nvidia's Blackwell platform to future Rubin and Rubin Ultra platforms will involve continuous PCB specification upgrades. This means that even if server shipment volumes remain flat, the PCB value per server will keep rising—a nuance often overlooked by the market, which tends to focus solely on unit growth.
First Major Rationale: The Global AI PCB Market Enters High-Growth Phase
Citing Frost & Sullivan data, JPMorgan notes the global AI and high-performance computing PCB market is valued at approximately $6 billion in 2024 and is projected to reach $15 billion by 2029, representing a five-year CAGR of 14.9%. The fastest-growing segments are two specific product categories. First, high-layer-count MLCBs, essentially multilayer boards with a very high number of layers. AI servers require a significant volume of PCBs with 14+ layers for high-speed signal transmission, with this segment expected to grow at a ~15% CAGR over the next five years. Second, advanced HDI PCBs, which are crucial for AI accelerator cards and GPU modules, are projected to grow at a ~14% CAGR. In other words, the most lucrative PCB products within the AI supply chain are set for double-digit growth for several years, and Victory Giant Technology is a global leader precisely in these two areas.
Second Major Rationale: Victory Giant Technology Emerges as the Global AI PCB Leader
JPMorgan points out that in the first half of 2025, Victory Giant Technology has secured multiple global top positions: it holds the number one global market share in AI and high-performance computing PCBs, in high-layer-count MLCBs, and in advanced HDI PCBs. Specifically, its market share in AI/HPC PCBs is 13.8%, in high-layer-count MLCBs is 16.2%, and in advanced HDI is a remarkable 44.6%. The near 45% share in HDI indicates a position approaching dominance rather than mere leadership.
Third Major Rationale: Deep Integration with Nvidia's Upgrade Cycle
JPMorgan views Nvidia as the primary growth driver for Victory Giant Technology. The most significant shift in the AI server supply chain is the transition from the Blackwell to the Rubin platform. Each platform upgrade necessitates PCB specification improvements, requiring redesigns of core boards like Compute Trays, Mid Planes, and Back Planes. Victory Giant Technology is deeply involved in these key projects, and JPMorgan expects the company to remain a core supplier throughout Nvidia's future upgrade cycles. Furthermore, emerging architectures like CPO and LPU could further increase PCB demand, providing additional growth avenues should these technologies see large-scale adoption.
Fourth Major Rationale: Google ASICs Contributing New Growth
Beyond Nvidia, JPMorgan specifically highlights Google's TPU. While market attention has been on GPUs, more internet giants are developing their own ASIC chips, with Google's TPU being a prime example. JPMorgan anticipates Google's TPU shipments to grow steadily in the coming years, with next-generation TPUs likely incorporating more advanced HDI products—Victory Giant Technology's area of greatest strength. Consequently, Google-related projects are expected to provide additional performance increments, with the potential for securing orders from other ASIC customers in the future.
Fifth Major Rationale: Significant Signal from Rmb18 Billion Capex Plan
A metric often overlooked by investors is capital expenditure, which in manufacturing often serves as a leading indicator for future orders. JPMorgan notes that Victory Giant Technology's capex for 2025 is approximately Rmb6.4 billion, with plans to increase it to Rmb18 billion in 2026—nearly a threefold jump. This indicates a major capacity expansion. Such an aggressive expansion plan typically signals that management has visibility on robust order flow for the coming years. JPMorgan interprets this capex surge as a strong signal of underlying demand strength.
Aggressive Profit Forecasts
JPMorgan's projections are notably bullish. It forecasts revenue of Rmb35.4 billion for 2026, Rmb60 billion for 2027, and Rmb84.2 billion for 2028, representing a three-year CAGR of 63%. For net profit, it projects Rmb4.3 billion for 2025, Rmb9 billion for 2026, Rmb17.2 billion for 2027, and Rmb25.6 billion for 2028, implying a three-year CAGR of 81%. Notably, JPMorgan's profit forecasts for 2027 and 2028 are approximately 9%-10% above consensus estimates, suggesting the bank believes the market still underestimates the company's future growth potential.
Final Analysis
Reviewing the report, it becomes clear that JPMorgan's optimism is not merely for a PCB manufacturer, but for a critical "pick-and-shovel" beneficiary of AI infrastructure upgrades. While market focus has been on GPUs, attention is now shifting to the underlying PCBs. Victory Giant Technology occupies a central position in this supply chain, boasting the world's leading market shares, benefits from Nvidia's upgrade cycles, incremental opportunities from Google ASICs, the industry's most aggressive capacity expansion plan, and a projected profit CAGR exceeding 80%. From this perspective, JPMorgan's core conclusion is clear: the AI computing race is far from over, and Victory Giant Technology is becoming one of the most important infrastructure beneficiaries in this contest.
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