On the evening of March 12, 2026, leading PCB industry company Shennan Circuit (002916.SZ) officially released its 2025 annual report.

In 2025, Shennan Circuit achieved operating revenue of 23.647 billion yuan, a year-on-year increase of 32.05%; net profit attributable to the parent was 3.276 billion yuan, a significant increase of 74.47%; and basic earnings per share were 4.91 yuan, up 34.15% year over year.

Image source: Shennan Circuit announcement

Profit Outpaces Revenue

Notably, Shennan Circuit announced its most generous dividend plan in history.

On the same day as the annual report release, Shennan Circuit also announced its 2025 profit distribution plan, proposing to distribute a cash dividend of 24 yuan (tax included) for every 10 shares to all shareholders. The total cash dividends are expected not to exceed 1.635 billion yuan, representing approximately 49.91% of the net profit attributable to the parent company in 2025, setting a new high since the company’s listing.

This impressive result reflects not only the company’s success in positioning itself in the AI computing power race but also highlights the domestic substitution of high-end PCBs and packaging substrates.

From an earnings core perspective, Shennan Circuit’s high growth is not just industry-wide growth but the result of product high-endization, business synergy, and capacity scale effects.

Net profit growth far exceeds revenue growth, demonstrating a typical “profit outperforms revenue” characteristic, indicating significant improvement in profitability. Meanwhile, operating cash flow net amount reached 3.838 billion yuan, up 28.71% year over year, closely matching profit growth, showing strong profit realization capability.

Quarterly distribution shows that in the first three quarters of 2025, the company already demonstrated strong momentum, with explosive growth throughout the year confirming sustained demand driven by AI computing infrastructure, rather than short-term pulse orders.

Shennan Circuit’s core competitiveness lies in its unique “3-In-One” business layout, integrating PCB, packaging substrates, and electronic assembly, forming a “technology-rooted, customer-source” synergy.

Entering the Top AI Supply Chain

In 2025, all three major business segments achieved qualitative leaps amid the AI computing wave.

The printed circuit board (PCB) business, serving as the “ballast,” grew revenue by 36.84% to 14.359 billion yuan, with gross margin rising to 35.53%. The core benefit came from the surge in demand for high-value products such as AI servers, high-speed switches, and optical modules.

Leveraging its technical reserves in large size, high layer count, and high-frequency high-speed technologies, Shennan Circuit quickly integrated into the top AI supply chain, continuously shifting product structure toward high-margin areas, and completely breaking free from reliance on traditional communication base stations. The packaging substrate business revenue increased by 30.80% to 4.148 billion yuan, with gross margin rising to 22.58%.

Driven by a recovery in the storage market, high-end DRAM products have been successfully mass-produced; more strategically valuable is progress in FC-BGA packaging substrates, with 22-layer and below products already in mass production, and 24-layer and above progressing with sample testing, successfully breaking the overseas giants’ monopoly and opening space for domestic substitution.

Electronic assembly business also achieved an 8.93% year-over-year growth, reaching 3.075 billion yuan. Supported by data center and automotive electronics demand, it maintained steady growth, forming a one-stop service capability with PCB business and enhancing customer stickiness. On capacity, Nantong Phase IV and the Thailand factory were smoothly commissioned in the second half of the year, alleviating capacity bottlenecks. The Thailand facility further helps the company mitigate geopolitical risks and expand its global delivery network.

The explosive performance in 2025 is essentially a resonance of three major era-driven dividends: AI computing infrastructure, automotive electronics intelligence, and domestic substitution of advanced packaging. AI infrastructure drives volume and price increases; the value of PCB per AI server is approximately 5-10 times that of traditional servers, with significant increases in layer counts and technological thresholds.

Estimates suggest that in 2026, the PCB market space for GPU+ASIC servers will exceed 90 billion yuan, entering a super-growth cycle. Automotive electronics is the second growth curve, with rising penetration of new energy vehicles pushing single-vehicle PCB value from hundreds to 2,000-3,000 yuan, with strong demand in ADAS and other fields. The company has already entered the supply chains of leading companies like BYD and Tesla.

Domestic substitution of packaging substrates holds even greater strategic value. FC-BGA, as a core material for AI chip packaging, faces high demand with almost zero domestic supply previously. Shennan Circuit’s breakthroughs open long-term growth potential.

Prismark data shows that in 2025, the company ranked fourth globally among PCB manufacturers, backed by its core position in high-end communication PCBs and domestic packaging substrates.

Facing Multiple Challenges

However, the prosperity also brings potential risks that cannot be ignored, and the sustainability of high growth faces multiple tests.

First, capacity ramp-up and cost pressures. The Guangzhou packaging substrate project and the Thailand new factory are still in ramp-up stages. Rising fixed depreciation, labor costs, and raw material price fluctuations continue to compress short-term profits. The yield and certification progress of high-end FC-BGA products are uncertain; if below expectations, it could impact performance release.

Second, financial indicators raise concerns. Growth in accounts receivable exceeds revenue growth, and the ratio of operating cash flow to net profit declines, indicating weakened profit quality. The high dividend payout also prompts reflection: does this imply difficulty in finding higher-return reinvestment opportunities? Or management’s anticipation of a peak in short-term growth?

Third, increased market competition. The surge in AI computing demand has attracted high-end layout investments from companies like Huatian Technology and Jingwang Electronics, while overseas giants like Xinxing Electronics and IFE Electronics are also retaliating. Industry competition is extending from technology to capacity and cost.

Fourth, cyclical demand fluctuations and technological iteration risks. Performance heavily depends on cloud vendors’ capital expenditure; if AI investments cool down, high-end PCB demand may decline temporarily. Additionally, new technological routes like CPO and LPO impose new requirements on PCBs; lagging in R&D could lead to losing first-mover advantages. Dependence on imported key raw materials also poses supply chain risks.

Overall, Shennan Circuit’s 2025 annual report, with a net profit growth of 74.47%, validates the strong pull of AI computing infrastructure on high-end PCBs and packaging substrates.

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