The company has released its Q1 2026 financial results, reporting revenue of RMB 5.519 billion, a year-on-year increase of 28.0% and a quarter-on-quarter increase of 6.7%. Net profit attributable to shareholders reached RMB 1.288 billion, up 39.95% year-on-year and 20.7% quarter-on-quarter. After excluding non-recurring items, net profit was RMB 1.257 billion, representing a year-on-year growth of 36.07% and a sequential increase of 19.07%. The ratio of non-GAAP net profit to net profit was 97.58%, indicating high profit quality. The gross margin stood at 34.46%, improving by 1.08 percentage points year-on-year and 0.95 percentage points quarter-on-quarter. The net profit margin was 23.34%, increasing by 1.99 percentage points year-on-year and 2.72 percentage points from the previous quarter.
In the first quarter of 2026, revenue grew by 28% year-on-year, while net profit surged by 40%, demonstrating steady enhancement in profitability. Despite significant price increases for upstream copper-clad laminates, the gross margin continued to rise, benefiting from ongoing optimization of the AI PCB product mix and a higher proportion of advanced products. Profit growth significantly outpaced revenue growth, with profitability showing sequential improvement for multiple consecutive quarters. Diluted ROE reached 7.40%.
On the expense side, selling expenses were RMB 49.68 million (0.90% of revenue, down 0.40 ppts year-on-year), general and administrative expenses were RMB 133 million (2.41% of revenue, down 0.21 ppts), and R&D expenses were RMB 155 million (2.81% of revenue, down 0.21 ppts, with absolute value up 19.4% year-on-year). The combined ratio of these three expenses was 6.12%, a decrease of 0.81 ppts year-on-year, highlighting significant scale effects. Financial expenses were RMB 104 million (1.88% of revenue, up 1.21 ppts), primarily due to increased exchange losses and interest expenses from new borrowings for capacity expansion. Net cash flow from operating activities was RMB 2.117 billion, a substantial increase of 399% year-on-year, indicating a major leap in cash generation capability.
The company holds the top global market share in AI PCBs, with multi-pronged expansion in high-layer count boards, advanced HDI, ASIC, and mSAP technologies. As the global leader in AI PCBs, it achieved the highest revenue in AI and high-performance computing PCBs in the first half of 2025, with a market share of approximately 13.8%. Core applications include key equipment such as AI compute cards, servers, and data center switches.
Regarding products: (1) High-layer count boards: The company possesses mass production capability for PCBs with over 100 layers, being one of the few global manufacturers capable of stable delivery. It holds a core competitive barrier in GPU/ASIC server motherboards. Verification for electrical and thermal performance of M8/M9 grade CCL materials has been completed, with ongoing certification for M9+ materials to meet the performance requirements of next-generation AI servers and switches. (2) Advanced HDI: Mass production of 6-step, 24-layer HDI products has been achieved, while R&D for 14-step, 36-layer HDI has been initiated, alongside technological reserves for 10-step, 30-layer HDI and 16-layer any-layer HDI, supporting cutting-edge AI products and autonomous driving platforms. (3) New product categories: The company is actively expanding into ASIC PCBs (bulk shipments have commenced for an overseas client and are scaling up), mSAP PCBs (dedicated lines are configured in Huizhou Plant 4), optical module PCBs, and switch PCBs, extending from a single GPU product category to a full range of AI PCBs, thereby further raising the business ceiling.
Inventory at the end of Q1 2026 was RMB 3.905 billion (an increase of RMB 740 million from the end of 2025), and construction in progress was RMB 5.17 billion (an increase of RMB 1.56 billion from the end of 2025), reflecting strong downstream AI demand, active inventory preparation, and accelerated capacity construction. With new part numbers for a major client nearing mass production and accelerated adoption of ASIC and new clients, order growth appears highly certain.
The Rubin platform preparation and generational upgrades for Client G's TPU are expected to become new growth drivers, with capacity expansion accelerating. Looking ahead to 2026-2027, the company's growth momentum is set to accelerate significantly: (1) Client N's Rubin platform: Four main products—Compute, Midplane, Switch, and LPU—are scheduled for gradual delivery from Q2 to Q3, with revenue recognition for some products starting in Q2 and all products entering the revenue recognition phase in Q3. Rubin PCBs are larger, have more layers, and involve more complex processes, leading to higher value per board compared to the previous generation, potentially becoming a new core growth driver. (2) Client G's TPU generational upgrade: The transition from TPU V7 to V8 to V9 involves substantial generational improvements in PCB design specifications and unit price. The company is already transitioning V7 to mass production and is expected to become a core supplier for V8. CPU motherboards for Client G are anticipated to contribute to profits in Q2, ahead of the TPU. (3) Capacity expansion is proceeding at full speed: Capital expenditure in Q1 2026 was RMB 3.574 billion, leading the industry. Huizhou Plants 4 and 9 have essentially reached ideal operational status, while Plants 10 and 11 are under accelerated construction. The Phase 1 renovation of Thailand A1 is complete, and Phase 2 high-end capacity has entered the verification stage. A2 and the Vietnam factory are progressing as planned. The company has set a total investment cap of RMB 20 billion for 2026.
The company already supplies nearly all leading AI clients, including Nvidia, AMD, Intel, Google, Microsoft, and Amazon. It benefits from a dual growth logic combining capacity expansion and product mix upgrades. Coupled with the volume ramp-up of the Rubin platform in the second half of the year and accelerated adoption of ASIC and new clients, full-year performance possesses significant potential for flexible growth.
Investment Rating. Overseas demand for AI computing power remains robust. The company is strategically positioned with core North American clients like Nvidia and major cloud service providers. With aggressive expansion of high-end AI computing capacity domestically and overseas planned for 2026-2027, and as subsequent AI PCB capacity comes online alongside order intake from multiple clients, the latest forecasts project revenues of **/**/** billion and net profits attributable to shareholders of **/**/** billion for 2026-2028. EPS is forecast at **/**/** yuan, corresponding to a PE ratio of **/**/** times based on the current share price. The company, with its years of deep expertise in the PCB sector, has successfully entered the supply chains of internationally renowned companies. This high-quality core client base drives order demand growth and is expected to further improve the company's product structure. Accelerated capacity expansion both domestically and overseas supports a positive outlook for the medium to long-term trend of high-end capacity expansion and product upgrades.
Risk warnings include industry demand falling below expectations, intensifying competition, slower-than-expected client expansion and order intake, and foreign exchange fluctuations.
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