1、EQUITY:TECHNOLOGYShengyi Electronics 688183.SS 688183 CHGlobal Markets Research12 February 2025Riding on global AI leaders roadmap,but valuation stretchedInitiate coverage at Neutral with TP of CNY42Initiate coverage at Neutral with TP of CNY42;implying 13.9%upsideWe expect Shengyi Electronics(Sheng

2、yi)to outperform its peers in Chinas PCB market,led by:1)strong momentum of global cloud/AI leaders AI ASIC projects and its wallet share gains;and 2)accelerated technology upgrades in Chinas AI value chain.Moreover,we think Shengyi has a diversified customer portfolio in both AI and non-AI segments

3、,which should help it to navigate through the ups and downs of business cycle over the next few years.We forecast a 31%revenue CAGR in FY24-26F,and expect the telecom/server/auto segments to contribute 21%/50%/14%of FY26F revenue,and estimate a 64%earnings CAGR in FY24-26F.Despite strong volume grow

4、th in the AI server segment,we caution that there might be near-term margin pressure due to high material costs,in our view.We initiate coverage at Neutral with a TP of CNY42,based on 40 x FY26F EPS of CNY1.05,in line with its historical median P/E(four-year)range.We think valuation is stretched,and

5、 that positive sentiment on global AI ASIC customer demand is largely reflected in the share price,and would look for a better entry point.We like WUS PCB(002463 CH,Buy,covered by Anne Lee),Shengyi Technology(600183 CH,Buy)and Shennan Circuits(002916 CH,Buy),with better risk/reward.The stock is trad

6、ing at 35x FY26F EPS.Riding on AI leaders networking expansion;we caution on margin pressure in near termThanks to the project win from global AI ASIC customers,we expect Shengyis server PCB segment to deliver a 54%revenue CAGR in FY24-26F,becoming the biggest revenue driver(36%/45%/50%of total reve