Recently, I have been pondering a question: can stocks like Ailisi and Shenghong, which have multiplied several times, still be bought? When should they be bought? How should they be bought?Before answering these questions, we must first ask ourselves, what are the most profitable directions this year? If we avoid these stocks, can we still achieve satisfactory results?First, the technology sector represented by Cambricon AI and semiconductors, with CPOs, optical modules, and PCBA frequently making headlines, followed by innovative drugs, robotics, and solid-state batteries.Next, let’s take a look at our own capability circle. Previously, during the good times for liquor stocks, I was able to profit from the consumer sector. After 2023, liquor entered a downward channel, and in 2024, I was forced to increase my research on semiconductor-related tech stocks. The progress was slow, but I managed to make a small profit during the bull market. In the first half of this year, my confidence was damaged due to the failure of Xinyi Sheng, leading me to be reluctant to invest energy in tracking optical modules and PCBA. By August, I noticed that stock prices had already risen.During the mid-year review, I realized that without innovative drugs and CPO/PCBA, my returns had decreased significantly. Relying solely on the semiconductor sector was not stable, as my strategy limits the position in the same industry to 40%. Even in the first half of this year, I did not fully utilize this limit.I suddenly realized that whether something can be done is not about sitting there and making blind decisions, nor can one be trapped in the failures or successes of one or two trades. What has happened should be left in the past; we should summarize our experiences and continue to look forward. At the very least, we need to understand the development logic, fundamentals, sustainability, etc., of these companies, and make decisions after considering multiple dimensions.
Take a look at stock forums; those who chase after stocks when they rise and flee when they fall will eventually be cut down. Recently, Shenghong has experienced significant fluctuations, with price changes of several percentage points. Comparing this to the fluctuations of the previous half year, the inflow and outflow of funds have clearly accelerated, indicating that some funds that acquired shares at the bottom have begun to exit.The probability and odds of moving upward from this position have been declining sharply, indicating that it has entered a clearly overvalued state. Therefore, while observing others’ operations, you must have your own value judgment to better choose when to buy and sell.How to determine if a company is worth buying? It depends on whether it is in the main line, whether it has continuously increasing net profits supporting its stock price, and whether it has sustainability. If your answer is affirmative, then was the recent drop an opportunity? Opportunities arise from declines, while rises bring risks.Today, let’s talk about Shenghong Technology, which was established in 2006 in Huizhou, Guangdong, initially focusing on double-sided four-layer boards and other basic PCB products.In 2015,it was listed on the Shenzhen Stock Exchange’s Growth Enterprise Market, raising 577 million yuan for the expansion of high-end production lines and the construction of R&D centers, marking the beginning of a new phase of development supported by capital.In 2019,key strategic decisions were made: counter-cyclical investment, establishing the HDI division, and entering thehigh-density interconnect (HDI) field. This move laid the core technological foundation for the company’s future entry into the AI server supply chain.In 2023,the company made a significant acquisition:it completed the acquisition of 100% of Pole Star Limited (which holds MFS Group), thereby mastering the core technologies and production capacity of flexible printed circuits (FPC) and rigid-flex boards, achieving afull product line layout of both flexible and rigid boards.In 2024,it signed a land lease contract in Bắc Ninh Province, Vietnam, to start building an overseas production base. Revenue is expected to exceed10 billion yuan (1.0731 billion yuan), with a net profit of 1.154 billion yuan.In 2025,it plans to go public in Hong Kong, raising funds for high-end capacity expansion and global layout. In the first half of the year, net profit increased by 366.89% year-on-year. The revenue from AI-related products has significantly increased.
Product Matrix and Technical Advantages:
High-end multilayer boards,with a maximum production capacity of70 layers, supporting high-speed signal transmission, mainly applied in:network communication, servers, data centers.Advanced HDI boards,the core advantage area, masteringarbitrary layer interconnection technology. It has28-layer eight-stage HDI production capacity and is developing 10-stage 30-layer products,mainly applied in:AI computing cards, AI servers (UBB substrates), high-end consumer electronics.FPC/rigid-flex boards,acquired through the acquisition of MFS Group, enhancing capabilities in the flexible circuit board field, mainly applied in:automotive electronics (sensors, displays), medical devices, wearable devices.IC packaging substrates,technological reserve direction, committed to breaking through key materials in the packaging process,mainly applied in:chip packaging.Technical moat: the company has built barriers inhigh layer counts, advanced HDI, and high-speed material applications (such as ultra-low loss materials supporting 224G transmission).AI server PCBs require more than 20 layers and use ultra-low loss special copper-clad laminates, which are valued at more than ten times that of ordinary servers.Looking at the profit trend from 2021 to 2025:
From the company’s net profit excluding non-recurring items, it can be seen that it is steadily rising in 2024, with a significant explosion in net profit in the first and second quarters of 2025, increasing fivefold quarter-on-quarter. From a financial perspective, this stock reached a peak of 299 yuan, increasing sixfold, supported by performance.
Future Performance Forecast:
Market institutions have given positive forecasts based on its visibility of AI orders and capacity expansion plans:In 2025: Expected net profit attributable to the parent company is about 5.659 billion yuan (year-on-year +390%), with an EPS of about 6.56 yuan.In 2026-2027: Some analysts predict even more optimistically, with net profit in 2026 possibly reaching 11 billion yuan, and in 2027 expected to climb to 18 billion yuan.This depends on the capacity release progress and yield ramp-up of its new factories in Vietnam and Thailand.Valuation Reference:
Valuation is a dynamic process influenced by market sentiment, the degree of performance realization, industry competition patterns, and other factors.Current valuation (based on 2025 forecast performance): Some research reports indicate that based on the expected net profit of 5.659 billion yuan in 2025, the corresponding PE (price-to-earnings ratio) is about 33 times.
Future valuation anchor points: As the net profit base rises, if performance can continue to grow rapidly (such as reaching the 11 billion yuan forecast for 2026), and if the market value remains relatively stable, the dynamic PE will decrease, potentially entering a more attractive range.
My personal thought is to make waves before reaching a PE of 40-50. This stock has currently entered a high valuation range, with insufficient safety margins, making it easy to incur significant losses. One must not chase high prices and should be prepared for position allocation.
Take a look at the significant drop; it is actually the best test of whether you truly recognize this company. If it drops by 20-30%, do you still have the confidence to buy? This was the biggest lesson I learned from Xinyi Sheng in the first half of the year.
Even if you have thought about where to buy, if the sentiment continues to develop pessimistically, do you have a plan for position allocation? Do you have a stop-loss plan, etc.? These must be planned before trading; the actual buying and selling are merely executing your established plan.
Why do this? Because only plans made after calm reflection will prevent impulsive decisions during trading, which can lead to emotional trading.
If you can remain unshaken by market sentiment and can think independently, making moves contrary to the herd, then congratulations, you are on the path to making money.
In conclusion, the development trajectory of Shenghong Technology is a clear path oftechnological upgrades + strategic positioning: from early multilayer boards to forward-looking layout of HDI technology, and then through acquisitions to enhance flexible board capabilities, ultimately positioning itself precisely in the global AI computing explosion, binding core major clients, achieving exponential growth in performance.
The realization of its future performance heavily relies onthe sustainability of AI computing demand and its ownsuccessful release of high-end capacity. Currently, the market has high expectations, but it is also necessary to closely monitor changes in the industry competition landscape.
That’s all for today. I am Xiaozhu. Let’s learn together and gradually become wealthy. If you find this article helpful, please like and follow. Your encouragement is my greatest motivation to move forward.