News Summary: Driven by the AI boom, VGT's quarterly performance shows strong growth

With the continuous rise in demand for AI hardware manufacturers, the demand for high-end PCBs has surged, driving strong double-digit growth in both revenue and profit in the first quarter. Richard Yu Benefiting from the strong demand for its advanced PCBs (printed circuit boards) from AI servers and other high-performance computing devices, VGT (2476.HK; 300476.SZ) announced robust double-digit growth in the first quarter. According to the first-quarter results released last week, VGT, headquartered in Huizhou, achieved a 28% year-on-year revenue growth to CNY 5.52 billion in the three months ending in March, while net profit grew at a faster rate of 40%, reaching CNY 1.29 billion. Driven by increased sales collections and higher export tax rebates, its operating cash flow surged from CNY 424 million in the same period last year to CNY 2.12 billion, a fourfold increase. After the earnings announcement, the company's stock price surged by 7%, marking its first quarterly report since its IPO in Hong Kong last month. The company sold shares at a price of HKD 209.88 per share, raising HKD 23.1 billion, making it the largest IPO in Hong Kong so far this year. As investors rushed to position themselves in the AI sector, the stock has risen by about 50% since its listing. VGT is a major beneficiary of the global AI boom, with its PCBs being key components of the high-performance infrastructure driving many AI applications. The company produces a variety of PCBs, including high-density interconnect (HDI) boards and multilayer printed circuit boards (MLPCB) with over 100 layers, widely used in AI servers, networking devices, and other advanced computing systems. Last year, revenue from its AI and high-performance computing business accounted for over 40% of total sales, while the smart device business contributed 19%. According to a third-party research report in its prospectus, the company is a leading player in the global advanced PCB market for AI and high-performance computing, ranking first in sales in this segment in the first half of 2025, with a market share of 13.8%, significantly higher than 1.7% in 2024 (when it ranked seventh). VGT is also one of the first companies in its peer group to mass-produce 24-layer HDI and has advanced capabilities to expand to 30-layer and 16-layer arbitrary interconnects, enabling it to deliver extremely complex high-density PCBs at scale. Last year, multilayer PCBs were VGT's largest source of revenue, contributing CNY 8.3 billion in sales, accounting for 43% of total revenue. Following closely was HDI, which contributed 38.5%, approximately CNY 7.4 billion in sales, a significant increase from only 14% in 2024. With the continued expansion of AI technology, demand for its multilayer PCBs and HDI is expected to remain strong. The company's current production is primarily concentrated in Huizhou, Guangdong. As part of its geographical diversification strategy, the company is also building new factories in Vietnam and Thailand to hedge against future geopolitical risks Yongzhufang focuses on reporting on Chinese companies listed in the United States and Hong Kong, including sponsored content. For more information, including inquiries about individual articles, please click here to contact us.