3Q earnings：Record quarterly margin while share-price correction appears overdone
生益科技(600183)
Shengyi Tech(SYT)delivered strong3Q26results,with revenue rising78.8%YoY/30.3%QoQ to RMB14.18bn and net profit surging238.4%/61.6%toRMB3.44bn,both ahead of Visible Alpha(VA)consensus.SYT’s GPM reacheda record41.6%,up from32.6%in2Q26,driven by a richer high-end AI-relatedproduct mix,new-product shipments and operating leverage from capacityramp-up despite raw-material inflation.PCB subsidiary Shengyi Electronics(688183CH,NR)reported3Q revenue of RMB3.76bn,up23.0%YoY,and netprofit of RMB801mn,up37.1%,with GPM of36.6%(vs.33.7%in2Q),indicatingstronger margin uplift in CCL.We raise FY26/27E revenue forecasts by4.8%/1.0%and GPM by3.6ppt/3.5ppt on stronger margin resilience and mixupgrades.Maintain BUY and TP of RMB190on34x FY27E P/E(vs.40xpreviously),slightly below its2-SD above its average1-yr forward P/E onmarket rotation towards non-AI sectors and reduced investor appetite forAI-related names,rather than any deterioration in SYT’s fundamentals.
AI demand drove broad-based growth across CCL and PCB.The CCLbusiness benefited from strong demand for high-end products,increasingprofit contributions from newly developed products,timely capacity ramp-upand continued sales-mix optimization,supporting higher sales volume,revenue and gross profit.SYE’s9M26revenue increased39.8%YoY toRMB9.55bn,while net profit rose71.5%to RMB1.91bn.PCB earningscontinued to outpace revenue growth,supported by robust AI-computingdemand,higher utilization and a rising contribution from high-value-addedproducts.
Margins:Stronger CCL contribution drove SYT’s GPM outperformance.SYT’s3Q26GPM of41.6%was5.0ppt above SYE’s GPM of36.6%,pointing to a stronger mix and operating-leverage benefits in the CCLsegment.PCB profitability also remained healthy,supported by higherutilization and a richer mix of high-layer-count and high-density products.
Capacity expansion and product upgrades support further growth;maintain BUY.Capex increased76.1%YoY to RMB3.00bn in9M26asSYT continued to invest in high-end CCL and PCB capacity.We expectsustained AI-server and data-center demand,further product-mix upgradesand new-capacity ramp-up to remain the key earnings drivers.We believethe recent share-price correction should have been overdone given SYT’searnings potential(25-28E CAGR:77.2%based on our estimates).Keyrisks include:Slower-than-expected capacity ramp-up,raw-materialinflation,change in tech roadmaps,etc.
