Citi sharply raised Shenghong's target price to 447 yuan: AI-PCB super cycle accelerates, supply-demand tension will persist beyond 2026.

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The AI-PCB super cycle is being upgraded again, and Victory Giant Technology, as an industry leader, is expected to achieve significant excess returns. Citibank has sharply raised Victory Giant's target price by 148% to 447 yuan, which is still 35% above the current share price. Victory Giant's share price has risen nearly 700% so far this year.

According to Chasing Wind Trading Desk, Citibank pointed out in its latest report that the AI-PCB super cycle is accelerating, mainly driven by the trend of rack wireless design and CoWoP technology.

Citibank emphasized that Victory Giant Technology, with its proven mass production capabilities for AI-PCB and capacity expansion speed far exceeding peers, will become a key beneficiary of this super cycle. According to Citibank’s forecast, Victory Giant's net profits for 2025/26/27 will be raised by 6%/65%/121% to 5.6 billion/12.8 billion/21.2 billion yuan, respectively. The new target price is based on 30x 2026 expected PE (previously 20x).

Key data shows that the PCB content value per GPU in VR/VR Ultra racks will reach 863 USD and 1,521 USD, far exceeding GB200/GB300's 375 USD. Citibank has revised up its 2026 AI-PCB demand forecast by 35% to 72 billion yuan, a significant increase from about 53 billion yuan expected in June, and expects the supply-demand tension to persist beyond 2026.

Wireless design is making the upgrading path of AI-PCB clearer

Citibank's research report points out that over the past two months, the trend of AI-PCB upgrading has further strengthened, mainly driven by the application of wireless reference design (i.e., shifting from cable connection to PCB routing interconnect) in trays and racks. This change is mainly motivated by assembly efficiency, yield improvement, space optimization in dense rack configurations, and better heat dissipation.

Specifically, the technical path:

It is expected that starting from VR, a mid-board may be used (to connect Vera CPU with CX-9 and Bluefield), and starting from VR Ultra, a backplane will be adopted (connecting compute and switch trays). Compared with GB compute trays, VR compute trays may move the CX-9 network card from the Bianca board to the front part of the tray, bringing the network card closer to the OSFP cage. The PCB mid-board will drive PCIe Gen6 signals to connect the Vera CPU with CX-9 and Bluefield.

Citibank estimates that the VR mid-board may bring an extra $300 or more in PCB content value per GPU, with specifications of over 40 layers and M9 CCL. The possibility of introducing orthogonal backplanes in Rubin Ultra is increasing, which could bring an additional $486 PCB content value per GPU, with potential specifications of 78 layers and M9 CCL.

AI-PCB supply-demand tension will persist until 2026

Citibank expects the shortage of AI-PCB will last until 2026 or even longer, mainly due to three factors:

First, AI-PCB demand may reach 72 billion yuan, a significant increase from 53 billion yuan as forecasted in June. The demand growth is mainly driven by the adoption of mid-/back-boards in the next-generation GPU platforms, upward revision for ASIC demand, and outperformance in 1.6T switch PCB content value.

Second, capacity expansion may be slower than expected, mainly constrained by shortages of high-end equipment/materials, and it takes an average of 18 months from greenfield construction to full capacity utilization.

Third, AI-PCB is not purely a capacity competition; quality and yield are equally important. Citibank believes early capacity expansion is necessary for AI-PCB qualification, but it does not guarantee qualified AI-PCB capacity.

Citibank stresses that clear multi-year AI capital expenditure trajectories from technology giants provide the industry with better visibility. Nvidia CEO Jensen Huang predicts that the global AI infrastructure market will grow to 3–4 trillion USD over the next five years, up from 600 billion USD in 2025, implying a CAGR of 38%–46%.

Broadcom announced its fourth AI client, expected to bring $10 billion incremental revenue in Q3 2026. Oracle’s remaining performance obligations surged 359% to $455 billion, and the CEO predicts that Oracle Cloud Infrastructure revenue for fiscal years 2026–2030 will reach $18 billion, $32 billion, $73 billion, $114 billion, and $144 billion, respectively, implying a CAGR of 68%.

Victory Giant Technology leads the industry in capacity expansion

Citibank expects Victory Giant Technology’s capacity to reach 31 billion/56.4 billion/83 billion yuan at the end of 2025/26/27, respectively. The Huizhou factory’s capacity will increase from 20 billion yuan at the end of Q2 2025 to 40 billion yuan by the end of Q1 2027; the Thailand factory’s capacity will reach 5/9/19 billion yuan at the end of 2025/26/27, and the Vietnam factory will start mass production in mid-2026, with capacity reaching 7/22 billion yuan at the end of 2026/27, respectively.

Citibank expects Nvidia to contribute 8.9/14.7/26 billion yuan of revenue to Victory Giant Technology in 2025–2027 (implying a 71% CAGR), accounting for 42%/36%/43% of total revenue. Including ASICs and switches, AI-related revenue will reach 10.6/27.7/47.3 billion yuan in 2025–2027, accounting for 49%/69%/77% of total revenue.

On this basis, Citibank has revised up Victory Giant Technology’s net profit forecasts for 2025/26/27 by 6%/65%/121% to 5.6, 12.8, and 21.2 billion yuan, mainly due to higher AI-PCB gross margins, faster capacity expansion, and higher AI-PCB demand in 2026. The target price is based on 30x 2026 PE (previously 20x), supported by higher growth visibility driven by adoption of mid-/back-boards and ASIC/switch upgrades in 2027.

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