The cumulative deviation of closing price increases over three consecutive trading days exceeds 20%. Shanghai Electric Power: Operating conditions are normal. Shanghai Luwei Electric's new project faces significant uncertain factors.

On February 26, SMD Electronics Co., Ltd. (SZ002463, stock price 85.36 yuan, market value 164.3 billion yuan) announced an abnormal fluctuation in its stock trading, stating that the company’s stock closing prices have deviated by more than 20% cumulatively over three consecutive trading days. The company indicated that there have been no significant changes in the internal or external operating environment recently, and business operations are normal.

At the same time, SMD Electronics also disclosed major ongoing planning matters, such as the company planning to sell all equity of its secondary subsidiary Huangshi Supply Chain Management Co., Ltd. to the actual controller; planning to acquire all equity of an independent third-party warehousing facility company to use its land and buildings for production facilities; and its wholly owned subsidiary Kunshan Huliwei Electronics Co., Ltd. planning to purchase land use rights and buildings from an independent third party, as well as constructing a new printed circuit board (PCB) production project and supporting facilities (hereinafter referred to as the Huliwei new project).

Among these, the Huliwei new project involves significant uncertainties. SMD Electronics stated: “If future market demand growth is lower than expected, or if there are large deviations in business market promotion and product price fluctuations from expectations, the project may be changed, delayed, suspended, or terminated, and may not achieve the expected benefits after implementation.”

Public information shows that SMD Electronics is a provider of PCB solutions in the data communication and intelligent vehicle fields. Its products include high-speed network switches and routers, AI (artificial intelligence) servers and HPC (high-performance computing), and intelligent driving domain controllers, among other high-end PCBs.

As the supporting component of electronic devices, PCBs can be understood as a “baseboard” that carries various components and circuits. They are widely used in various electronic devices and are therefore called the “mother of electronic products.” With the accelerated development of AI applications, the PCB industry is entering a new growth cycle. According to Prismark data, the PCB market size is expected to grow from $73.565 billion in 2024 to $94.661 billion in 2029. High-layer multi-layer PCBs (MLB), high-density interconnect (HDI) PCBs, and large-sized advanced substrates related to AI, high-performance computing, and communication infrastructure systems are the main drivers of the PCB market.

It is reported that ordinary multi-layer PCBs usually have four or more layers; high-layer boards generally have more than 18 layers and a thickness of less than 100 mils (about 2.54 mm). The more layers a PCB has, the more conducive it is to achieving fast signal transmission and improving data processing performance.

To meet the growing demand in the PCB market, many PCB manufacturers including Shenghong and Pengding are actively expanding high multi-layer and HDI capacity domestically and internationally, and SMD Electronics is no exception.

In addition to the aforementioned Huliwei new project, in mid-February 2025, SMD Electronics announced that its board of directors approved an investment to build a “high-end PCB production project,” mainly targeting high-speed computing servers, next-generation high-speed network switches, and other fields, producing mid-to-high-end products. The total investment is about 3.3 billion yuan, and upon completion, it is expected to add an annual capacity of 140,000 square meters of high-end PCBs, with an estimated annual revenue increase of 3.05 billion yuan.

In terms of performance, SMD Electronics released its 2025 performance forecast, showing that benefiting from structural demand for PCBs in emerging computing scenarios such as high-speed computing servers and AI, as well as mid-to-high-end products and mass production technologies, the company is expected to achieve an operating revenue of 18.945 billion yuan in 2025, a year-on-year increase of 42%; and a net profit attributable to the parent company of 3.822 billion yuan, a year-on-year increase of 47.74%.

(Source: Daily Economic News)