Shengyi Tech (600183.SS): Management visits: Strong AI CCL demand; Capacity expansion ongoing

We visited Shengyi’s management and discussed AI CCL demand, pricing, and capacity expansion. Management remains positive on demand driven by the AI infrastructure ramp-up, with continued CCL price increases and capacity expansion supporting growth. This is consistent with our view in our Global AI PCB / CCL TAM report, where we expect the AI CCL value TAM to grow by 181% / 217% / 115% YoY in 2026E-28E and reach US$47.5bn in 2028E, supported by rising AI server shipments, AI CCL specification upgrades, and CCL players’ capacity expansion. While some investors remain concerned about CCL oversupply risk into 2028 and beyond given 40-50% industry capacity CAGR for AI grade CCL in 2026-28E, we see at least 60%+ AI CCL volume/area CAGR in 2026-28E if no unexpected order cuts, and we maintain our positive view on the industry and reiterate Buy on Shengyi as a key beneficiary of rising AI CCL end demand, driven by AI CCL price increases and specification upgrades of rack-level AI servers towa