New stock preview | A-share computing power server PCB leader, Delton Technology (001389.SZ) to list in Hong Kong

In December 2020, Delton Technology submitted an application to the Sci-Tech Innovation Board in China, but three months later voluntarily withdrew the application. Three years later, the company finally achieved its goal of listing on the A-share market on the Shenzhen Stock Exchange, with its market value skyrocketing by over 60% this year. However, the company is not satisfied with just this achievement, as the leading PCB manufacturer for computing servers, Delton Technology (001389.SZ), is now preparing to list on the Hong Kong stock market to achieve a dual-listed status on the AH shares. On December 14th, Delton Technology submitted its application to the Hong Kong Stock Exchange with CITIC SEC and HSBC as its joint sponsors. According to Frost & Sullivan, Delton Technology is the third-largest global manufacturer of PCBs for computing servers based on accumulated revenue from 2022 to 2024, ranking first among manufacturers in the mainland China. The company has shown strong performance, with revenues of 24.12 billion, 26.78 billion, 37.34 billion, and 38.35 billion for the first nine months of 2022-2025, maintaining double-digit growth rates. Profitability has also continued to improve, with net profit margins of 11.6%, 15.5%, 18.1%, and 18.9% during the same period. Additionally, the company's cash flow is very healthy, with cash and cash equivalents totaling 7.15 billion as of October 2025. Delton Technology's listing aims to achieve a dual-listed status on the AH shares. The company first went public on the Shenzhen Stock Exchange in 2024 and has seen significant growth this year, driven by its fundamentals. Many industry leaders in the A-share market have chosen the dual-listing model with AH shares, not only to establish brand recognition in the global capital market but also to leverage AH valuation linkage to better reflect fundamental value. High growth in performance, strong profitability Established in April 2002, Delton Technology provides customized PCB products for various applications, including cloud computing, data centers, telecommunications, automotive electronics, consumer electronics, and other industries. The company's operating entities include Guanghe International, Dongguan Guanghe, Huangshi Guanghe, Guanghe Holdings, overseas subsidiaries in Thailand and the US. Dongguan and Huangshi are core production bases. The company's PCB products are sold in computing, industrial, and consumer applications, with computing applications accounting for the majority of demand. From 2022 to the first nine months of 2025, revenues from computing applications accounted for 67.8%, 69.4%, 72.5%, and 73.9%, with double-digit compound growth rates. Industrial application revenues have fluctuated slightly, but experienced high growth this year, with a 50.5% increase in the first nine months. Consumer application revenues have grown steadily in the same period. PCBs for computing applications are designed for high-density multilayer PCBs for computing servers and AI training, including PCBs for computing servers and data center switches, with AI servers and general servers in the category of computing server PCBs. As the core source of revenue, the introduction of new server platforms in 2023 has increased sales of high-performance server PCBs, leading to a significant increase in demand for multilayer PCBs. Delton Technology's continuous growth in PCBs with 14 layers or more in computing applications now accounts for over 70% of its revenue. In addition, industrial application PCBs mainly include industrial control PCBs, automotive electronics PCBs, and communication PCBs. Communication products saw a significant increase in demand this year, contributing to core growth in this segment. Consumer application PCBs are designed for mass consumer electronics and security devices, with steady demand in recent years contributing to stable growth in this segment. Delton Technology's customers include direct customers, traders, and PCB manufacturers. As of September 2025, the company had 202 customers, with 155 direct customers contributing over 90% of revenue. The top five customers are all direct customers, contributing 63.6%, 65.6%, 61.4%, and 59.3% of total revenue from 2022 to the first nine months of 2025, with the largest customer contributing 26.5%, 26.6%, 24.6%, and 18.0% in the same period. Delton Technology has strong profitability, with gross profit margins of 26.1%, 33.3%, 33.4%, and 34.8% from 2022 to the first nine months of 2025. The computing application PCBs contribute over 90% of gross profit margins among PCB products, with a gross profit margin of 36.2% in the first nine months of 2025. The gross profit margins for other application PCBs are only in single digits. Additionally, the company's other income, including recyclable materials such as etchants and laminated frames, has a gross profit margin of over 90%, contributing to 23.4% of gross profit in the first nine months of 2025. The company's expenses have remained stable, with a sales expense ratio maintained at 2-3%, a management expense ratio fluctuating within 4-4.5%, an R&D expense ratio between 4-5%, and a financial expense ratio consistently at 0.4%. Driven by gross profit margins, the company's net profit margin increased from 11.6% in 2022 to 18.7% in the first nine months of 2025, a growth of 7.1 percentage points. The company's return on equity (ROE) from 2022 to the first nine months of 2025 was 19.86%, 22.68%, 22.12%, and 26.34% (annualized). Industry leader, AH valuation linkage reshaping Looking at the industry, the global PCB market is steadily growing, with a market size of 750 billion USD in 2024, a compound annual growth rate of 4.9% over the past five years. With the growth of emerging applications such as data centers, AI, autonomous driving, and AR/VR, the market size is expected to reach 937 billion USD by 2029, with a compound annual growth rate of 4.5%. The PCB market for computing applications has shown remarkable growth, with a compound annual growth rate of 18.2% from 2020 to 2024, and a projected compound annual growth rate of 10.9% from 2024 to 2029, reaching a market size of 210 billion USD by 2029. China is the core market for PCBs, accounting for 56.0% of the market share, far ahead of Japan (7.9%), the Americas (4.7%), and Europe (2.2%). In terms of sales, the market size for PCBs in China was 420 billion USD in 2024, with a compound annual growth rate of 6% over the past five years. Computing, industrial, and consumer application PCBs accounted for 10.9%, 43.9%, and 45.2% of the market share respectively. However, 48% of the PCB market in China is for export, with the remaining 52% for domestic consumption. Delton Technology is a leading domestic manufacturer of PCBs for computing applications. In terms of computing server PCBs, the top five companies globally hold a total market share of 31.3%, with Chinese companies dominating the market. Delton Technology ranks third globally with a market share of 4.9% for computing server PCBs, and ranks first in China for CPU motherboard PCBs with a market share of 12.4%, ranking third globally. It is worth noting that most of the company's PCB products are sold overseas, with overseas revenue accounting for 82.7%, 81.2%, 77.1%, and 70.6% from 2022 to the first nine months of 2025. The main destinations for exports are bonded areas, Hong Kong, and Taiwan, which together account for over 70% of exports. However, the domestic market has seen impressive growth, with an 84.2% increase in revenue in the first nine months of 2025, accounting for 29.4% of total revenue. The company plans to deepen cooperation with targeted customers and localize operations, expand international business strategically through its mature JDM model, and enhance cooperation with global leading server manufacturers. Delton Technology has ample cash flow to meet the demands of international market expansion. As of September 2025, the company had cash and cash equivalents totaling 7.02 billion, benefiting from its strong business generation capability. The net cash flow from operating activities has remained positive, and can adequately support investment expenditure. Additionally, the company has a low debt ratio, with a debt ratio of 46.4% in the first nine months of this year, and an interest-bearing debt ratio of only 7.44%, indicating a healthy financial position. In conclusion, Delton Technology has a strong foundation, with the rapid development of AI driving continuous high growth in computing application PCBs. AI server PCBs have been the main driver of the company's performance growth. The long-term cooperation with direct customers has ensured stable demand, with the industry continuing to hold growth potential, especially in the double-digit compound growth of computing application PCBs driven by AI. As an industry leader, the company is poised to benefit from industry development dividends. The company has maintained a strong profitability, with increasing net profit margins and ROE levels higher than the industry average. In the past two years, the company has actively returned value to shareholders, with an average dividend payout ratio of 27.5%. The listing on the Hong Kong stock market, aiming for a dual-listed status on the AH shares, is expected to provide easier access to global financing channels, enhance funding capabilities, and accelerate international market expansion to cover a wider global market and market opportunities. Delton Technology's A-share market value exceeds 34 billion RMB. If successful in the listing and meeting the requirements for inclusion in the Stock Connect program, the valuation is expected to further increase under the AH linkage.