Shennan Circuits Q3 Revenue Up 66% YoY, Net Profit Up 94%
nashnova research
Shennan Circuits posted Q3 revenue of RMB 10.48 bn and net profit of RMB 1.88 bn, both at multi-year-high growth rates driven by AI-infrastructure PCB demand — yet operating cash flow fell 15% even as profits surged, with receivables and inventory swelling faster than sales.
How strong is the growth?
Q3 revenue hit RMB 10.48 bn, up 66.29% YoY; net profit reached RMB 1.88 bn, up 94.42%.
For the first three quarters combined, revenue was RMB 25.77 bn (+53.84%) and net profit RMB 4.13 bn (+77.54%).
This means → every extra yuan of revenue is producing even more profit — scale effects are kicking in, with cost growth at 44.47% trailing revenue growth by a wide margin.
Where is the money coming from?
The core driver is surging demand for high-end PCBs — printed circuit boards, the "wiring backbones" inside chips and servers — fuelled by AI computing infrastructure buildout.
Basic EPS reached RMB 6.14; return on equity rose to 22.12%, up nearly 7 percentage points year-on-year.
In plain terms = the company is squeezing significantly more profit from every yuan of shareholder capital — almost 50% more than a year ago.
What risks are hiding in the cost lines?
Finance costs hit RMB 299 mn, up 800% YoY — driven mainly by foreign-exchange losses from currency swings.
Admin expenses reached RMB 1.25 bn, up 64.94%, outpacing revenue growth. A key reason: higher share-based compensation charges.
Credit impairment losses hit RMB 206 mn (+147%); inventory write-downs rose 40.81%. This reflects a widening risk exposure — the faster the business scales, the larger the bad-debt and obsolescence tail.
Profits are surging — so why is cash flow shrinking?
Operating cash flow for the first three quarters was RMB 1.96 bn, down 15.36% YoY, while net profit rose 77.54%.
Receivables jumped 72.53% from year-start to RMB 9.06 bn; inventory surged 88.72% to RMB 9.70 bn — both growing faster than revenue.
This means → paper profits are climbing fast, but the actual cash is still locked up in customer IOUs and warehouse stock. Put simply = a rising share of "earnings" exists on the books, not in the bank.
How is the expansion being funded — and where is it going?
Construction-in-progress rose 150% from year-start to RMB 4.63 bn, with AI-related capacity projects advancing in Wuxi, Nantong, and Guangzhou.
Short-term borrowings surged 8,600% to RMB 1.31 bn; long-term borrowings rose 164% to RMB 7.09 bn. New bank loans in the first three quarters totalled RMB 79.8 bn.
The company launched a directed share placement in June targeting up to RMB 4.37 bn, approved by the Shenzhen Stock Exchange on October 14. This means → Shennan is funding its AI capacity push with a twin approach — debt plus equity.
What should investors watch next?
The divergence between surging profits and falling operating cash flow is the central tension — if receivables are not collected on schedule, earnings quality will erode.
Payables rose 82.70% and contract liabilities nearly 110%, easing some working-capital pressure in the short term, but operating liabilities are swelling in parallel.
In plain terms = two things will determine whether Shennan's profits are "real": whether customers pay on time, and whether new capacity can absorb the inventory pile once it comes online.
市场有风险，内容仅供研究参考，不构成投资建议。