Sheng Hong Technology: Full Order Book, Actively Promoting CoWoP Technology

Shenghong Technology hosted approximately 40 institutional investors, including Morgan Stanley, Guangfa Fund, and Bosera Fund, at its Huizhou headquarters, with the company's chairman, Chen Tao, and president, Zhao Qixiang, among other executives, in attendance for the exchange.

Orders are full, and the consumption of high-end capacity is accelerating

The company's management revealed that the current order book is full, and the utilization rate of the Huizhou factory's capacity is maintained at a high level. In terms of major customers and ASIC customers, the layout of new products and new technologies is progressing smoothly, and the company has deeply participated in core customer project co-development, entering a critical period of proprietary technology accumulation in advance. It is worth noting that with the increase in the number of layers, thickness, and material grade of new generation products, the consumption of high-end capacity per unit of product has significantly increased, which also means that the output value will be greatly increased under the same capacity.

Continued optimization of customer structure, ASIC business is expected to become a new growth pole

Faced with the current situation of high concentration of major customers, the company adheres to the customer layout strategy of "high-endization and diversification", and has participated in most of the new schemes of mainstream AI chip players in the market, covering core categories such as GPU accelerator cards and TPU supporting boards. The management clearly stated that the progress of ASIC-related customer business is smooth, and it is expected to become one of the core drivers of the company's performance growth in the future.

CoWoP technology layout attracts attention, single board ASP may see exponential growth

One of the incremental information that attracted the most attention from the market in this survey, is the CoWoP technology that the company is actively promoting. This technology requires high-level HDI and mSAP process capabilities, and is expected to bring a significant increase in the value of PCB products. The company also revealed that in the future, high-end PCB products will evolve along the direction of reducing the energy consumption per unit of computing power and increasing the density of computing power, with continuous signal bandwidth upgrades and more refined circuit density, which may lead to an increase in ASP that could be several times or even exponential.

Raw material supply is stable, cost pressure is controllable

Against the backdrop of the industry's shortage of upstream raw materials, the company, as the largest customer of several key material suppliers, has established a stable strategic partnership and has made strategic stockpiling. The management stated that the prices of the main raw materials required for high-end products are currently relatively stable, and the company can reasonably pass on costs through pricing negotiations with downstream customers, while also offsetting price fluctuations through technology and process innovation.

Steady progress in capacity expansion, aiming for a hundred billion output value by 2030

The company is fully promoting capacity expansion, and the pace of expansion is at the leading level of the industry. The management reiterated the strategic goal of a hundred billion output value by 2030, and stated that the progress of each link is smooth, and they are full of confidence in the subsequent production and operation and the achievement of benefits.

Overall, Shenghong Technology is in a core position to benefit from the construction of AI computing infrastructure. Driven by three factors: orders, capacity, and technology, the company's medium and long-term growth logic is further strengthened. Breakthroughs in cutting-edge technologies such as CoWoP are expected to open up new value spaces for the company.