AI computing power drives demand for high-end PCBs; Shennan Circuits' Q3 revenue up 66% year-on-year, net profit up 94%

The construction of AI computing power infrastructure has driven growth in demand for high-end electronic circuits. Shennan Circuits achieved operating revenue of 10.478 billion yuan in the third quarter of 2026, a year-on-year increase of 66.29%; net profit attributable to shareholders of the listed company was 1.878 billion yuan, a year-on-year increase of 94.42%.

In the first three quarters, the company achieved operating revenue of 25.774 billion yuan, a year-on-year increase of 53.84%; net profit attributable to the parent company was 4.129 billion yuan, a year-on-year increase of 77.54%; net profit after deducting non-recurring gains and losses was 4.098 billion yuan, a year-on-year increase of 87.80%. In the same period, basic earnings per share were 6.14 yuan, and the weighted average return on net assets rose to 22.12%, an increase of nearly 7 percentage points from the same period last year.

From the perspective of profit composition, non-recurring gains and losses in the first three quarters totaled approximately 31.51 million yuan, a relatively low proportion compared with the more than 4 billion yuan in net profit attributable to the parent company, and performance growth mainly came from recurring gains and losses. At the same time, the company's total assets increased by 52.37% from the beginning of the year to 46.6 billion yuan, and construction in progress increased substantially, indicating that the company is stepping up capacity construction and equipment investment.

Revenue growth accelerated, and working capital occupation increased simultaneously

In the first three quarters, Shennan Circuits' operating revenue reached 25.774 billion yuan, a year-on-year increase of 53.84%. In its financial report, the company attributed revenue growth to an increase in business orders. In light of development in fields such as AI servers, data centers and high-speed communications, growth in demand for high-end PCBs provided support for the company's business expansion.

On the cost side, operating costs in the first three quarters increased by 44.47% year on year, lower than the revenue growth rate, reflecting an improvement in the company's profitability.

In terms of working capital, as of the end of the third quarter, the company's accounts receivable had increased by 72.53% from the beginning of the year to 9.058 billion yuan, and inventory had increased by 88.72% to 9.699 billion yuan, with both growth rates higher than the revenue growth rate in the same period. This change may be related to factors such as expanded business scale, increased stockpiling and settlement cycles, and also means that more funds are tied up in accounts receivable and inventory management. Inventory turnover, collection of accounts receivable and related impairment risks still need to be monitored going forward.

In terms of cash collection, in the first three quarters the company received 23.653 billion yuan in cash from sales of goods and provision of services, a year-on-year increase of 56.94%, basically in line with revenue growth. Overall, the company's business scale has continued to expand, but the conversion of revenue growth into cash collection is still worth continued tracking.

Expenses grew rapidly, with exchange gains and losses and equity incentives having an impact

In the first three quarters, Shennan Circuits' financial expenses reached 299 million yuan, compared with approximately 33.17 million yuan in the same period last year, a year-on-year increase of 800.66%. Changes in exchange gains and losses brought about by exchange rate fluctuations were an important factor affecting financial expenses.

In the same period, the company's administrative expenses were 1.249 billion yuan, a year-on-year increase of 64.94%, a growth rate higher than revenue growth. An increase in expenses related to equity incentives was one of the important factors affecting administrative expenses. Such expenses are related to the company's incentive arrangements and will have a certain impact on current-period profit; the extent of the subsequent impact will depend on the pace of expense recognition and business growth.

In addition, in the first three quarters credit impairment losses reached 206 million yuan, a year-on-year increase of 147%. The expansion of accounts receivable is a background factor that needs attention, but specific changes still need to be analyzed in conjunction with the aging structure, customer credit conditions and provisioning policies. Provisions for inventory write-downs increased by 40.81% year on year, also reflecting the corresponding impairment risk the company faces after the expansion of inventory scale.

Operating cash flow declined, and expansion brought funding needs

In the first three quarters, the company's net cash flow from operating activities was 1.959 billion yuan, a year-on-year decrease of 15.36%, in contrast to the 77.54% growth in net profit attributable to the parent company.

The substantial increase in accounts receivable and inventory may be an important reason for the decline in operating cash flow. As the business scale expands, the company's funding needs in areas such as procurement and material preparation, production and delivery, and customer settlement have risen accordingly. Although cash collected from sales has continued to grow, differences in the timing of cash inflows and outflows may still affect operating cash flow performance.

In the same period, the company's accounts payable increased by 82.70% from the beginning of the year to 7.188 billion yuan, and contract liabilities increased by nearly 110%. The increase in accounts payable helps ease some working capital pressure, but at the same time means that the scale of operating liabilities has risen.

Overall, the company's profit growth and changes in operating cash flow have diverged, reflecting that during business expansion, profit scale and capital occupation are not synchronized. Whether operating cash flow can improve going forward will depend on changes in factors such as collection of accounts receivable, inventory turnover and procurement payments.

Changes in Shennan Circuits' balance sheet show that the company is accelerating capacity construction. At the end of the first three quarters, construction in progress had increased by 150.17% from the beginning of the year to 4.630 billion yuan, and other non-current assets had increased by 383.67% to 2.426 billion yuan, the latter involving items such as prepayments for engineering and equipment. The company is advancing related project construction in Wuxi, Nantong, Guangzhou and other places to meet future business needs.

Capacity expansion has also brought financing needs. As of the end of the third quarter, the company's short-term borrowings had increased from the beginning of the year to 1.306 billion yuan, an increase of 8,600%; long-term borrowings increased by 164.48% to 7.086 billion yuan. In the first three quarters, the company obtained 79.8 billion yuan in bank loans, a year-on-year increase of 798%. The above financing data reflect the expansion of the company's capital operations, and financial pressure needs to be assessed going forward in conjunction with loan maturities, use of funds, interest expenses and the actual pace of capital expenditure.

In addition, in June 2026 the company launched a plan to issue shares to specific targets, intending to raise no more than 4.367 billion yuan, with the funds intended for the Wuxi AI computing power electronic circuit products project and to supplement working capital. According to company disclosures, the plan passed review by the Shenzhen Stock Exchange on October 14. If subsequently implemented smoothly, it will provide further support for project construction and working capital.Risk Disclosure and Disclaimer

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