IPO Analysis | Suzhou Dongshan Precision Manufacturing (02384) Launches Public Offering: Accelerating Earnings Growth, Can the "A+H" Dual Listing Restart Its Tenfold Journey?

In the AI era, computing power clusters' "electrical connections" (AI PCBs) and "optical connections" (optical modules) together build the high-speed interconnect network for AI computing clusters, ushering in a massive demand market. This is because global tech giants are all comprehensively ramping up AI infrastructure. As of the latest financial guidance for 2026, the combined annual capital expenditure of the four tech giantsGoogle, Amazon, Microsoft, and Metaexceeds US$650 billion, with funds concentrated on AI servers, data centers, high-speed networks, and large model R&D. JPMorgan has raised its AI infrastructure capex forecast, projecting that total global intelligent computing center investment will reach US$5.5 trillion by 2030. Capital investment exceeding a trillion US dollars brings a market feast to the AI industry chain. Yet few companies hold both the AI PCB and optical module tracks in their hands at the same timeSuzhou Dongshan Precision Manufacturing (02384) is one of them. It is understood that Suzhou Dongshan Precision Manufacturing has passed the HKEX hearing and is conducting its public offering from October 20 to October 23, planning to globally offer 113,783,200 H shares, of which 11,378,400 shares are for the Hong Kong public offering and 102,404,800 shares for the international offering, at a maximum offer price of HK$93.80 per share (100 shares per lot, with an entry fee of approximately HK$9,474.59), and is expected to list on the Main Board of the HKEX on October 28. If the offering is completed, the company will achieve an "A+H" dual-listing platform and enter the "allocation vision" of global investors. The company's cornerstone investors include Aurora SF, Hong Kong Yonglian Investment Development Limited, JPMorgan Asset Management (Asia Pacific) Limited, Alibaba Investment Limited, CPE Bodhi Investment Limited, LMR Multi-Strategy Master Fund Limited, Ruiyuan Fund, Montage Hong Kong Holdings Company Limited, Orient Asset Management (Hong Kong) Limited, Spring River Greater China Fund, Jane Street Singapore Pte. Limited, Nexchip Semiconductor Corporation Hong Kong Limited, Pinpoint Asset Management Limited, Yuxuan Network Technology Limited, Tianhong Fund Management Co., Ltd., Xinhua Asset Management (Hong Kong) Limited, and others. The company's cornerstone investor structure is diversified and strong, locking in a solid subscription base for this global offering. Suzhou Dongshan Precision Manufacturing is an A-share listed company. Its market value launched a bull market run in 2024. Although it has corrected significantly since July 2026, it has still risen more than 5.8 times in less than three years. This time, the company will link "A+H"what kind of new story does it want to tell? Net profit surged 293.5%, with performance entering an accelerated growth cycle It is understood that Suzhou Dongshan Precision Manufacturing is in an accelerated growth cycle. From 2023 to the first half of 2026, revenue growth was 6.56%, 9.27%, 9.12%, and 63.95%, respectively, while net profit was RMB1.965 billion, RMB1.085 billion, RMB1.393 billion, and RMB2.985 billion, respectively. The key time point in the company's performance cycle is 2025, when revenue and profit began to grow together, and in the first half of 2026 it clearly accelerated, with net profit surging 293.5% and net margin rising to 10.7%. This is thanks to the company's diversified business drivers. The company has four major businesses: PCB, precision components, touch panels and LCD panels, and optical modules. In the first half of 2026, the PCB business remained the foundation, but structurally focused on high-end AI PCBs as the development priority, with rigid boards, flexible boards, and rigid-flex boards all maintaining growth, generating revenue of RMB12.53 billion, or 45.1% of revenue; precision components revenue was RMB6.581 billion, up 178.6% year-on-year, with its revenue share rising to 23.7%; and the optical module business was the most eye-catching, with revenue of RMB5.351 billion and a revenue share of 19.2%. The optical module business is one the company expanded through its 2025 acquisition of Source Photonics, which after consolidation contributed the main revenue and profit growth. In the first half of 2026, for instance, PCB gross margin was 17.6%, precision components gross margin was 11.6%, while optical module gross margin was as high as 39.2%, contributing nearly 40% of gross profitabout 20% of revenue contributed nearly 40% of gross profit, directly driving the company's gross margin to jump from 13.1% to 19.4%. Image source: Company post-hearing information For this fundraising, Suzhou Dongshan Precision Manufacturing plans to use most of the proceeds for capacity expansion of high-speed EML chips and optical modules, and to build new production facilities focused on high-end PCBs. Evidently, the company has locked in its development direction: these two businesses align with the main AI computing trackone is a structural opportunity in the foundation business, the other is a high-margin growth trackand the "AI PCB + optical module" dual engine is gradually taking shape. In addition, this H-share listing also aligns with the company's capital globalization strategy. The company's business and capacity cover 14 countries and regions worldwide, with overseas revenue accounting for more than 80%. In the first half of 2026, for instance, revenue shares from the Chinese and overseas markets were 16.8% and 83.2%, respectively; within overseas markets, the U.S. market accounted for 46.1% of revenue, while other Asian countries are also growing rapidly. The H-share listing will help solidify its leading position in the global market. Two core logics: "AI PCB + optical module" drive growth certainty "AI PCB + optical module" are the two core tracks driving Suzhou Dongshan Precision Manufacturing's accelerated growth, bringing high certainty to the sustainability of performance growth, validated by two core logics. First, demand in both major tracks continues to explode. Driven by AI infrastructure, demand for high-layer-count AI PCBs continues to grow, and PCBs present obvious structural opportunities. According to China Insights Consultancy, for example, the edge AI device PCB industry had a compound annual growth rate of 64.2% from 2021 to 2025, and the data center PCB industry had a CAGR of 21.5%, both significantly higher than the overall growth rate of the global PCB industry; their market sizes are expected to reach US$30 billion and US$36.4 billion, respectively, by 2030. Optical modules are core components for breaking through data transmission bottlenecks. Also driven by AI infrastructure, the global market size was US$24.5 billion in 2025, with a CAGR of 21.5% from 2021 to 2025, and is expected to reach US$108.6 billion by 2030, a CAGR of 34.6%. In terms of product lines, 800G modules are experiencing explosive growth, and 1.6T products have entered mass production and become a core growth driver. From the perspective of the industry chain, AI infrastructure is still expanding at an accelerated pace, providing assurance for AI PCB demand. According to the latest AI server industry research by TrendForce, the total capital expenditure of the world's top nine CSPs (Google, Amazon, Meta, Microsoft, Oracle, ByteDance, Tencent, Alibaba, Baidu) is expected to exceed US$957 billion in 2026, a year-on-year increase of 106%, and to surpass US$1.5 trillion in 2027, continuing to grow by 60%. Second, Suzhou Dongshan Precision Manufacturing has achieved a "double positioning" in both scale and product technology in AI PCBs and optical modules. In the AI PCB field, the company is one of the very few manufacturers covering flexible boards, rigid boards, and rigid-flex boards simultaneously. According to China Insights Consultancy, based on 2025 revenue, the company ranks third among global PCB suppliers with a 4.2% market share, and second among global flexible board suppliers with a 24.5% market share. On the product side, the company's multilayer PCBs and HDI use ultra-low-loss M7/8-grade and above materials, achieving transmission rates of up to 224Gbps, capable of meeting the multi-GPU interconnect needs in AI clusters, with expertise in high-layer-count PCBs of up to 78 layers and high-order HDI. On the basis of M7/8-grade and above materials, the higher the layer count, the higher the technical requirements; the company is positioned at the industry's forefront technical level, holding scarce high-end AI PCB products. In the optical module field, the company's Source Photonics is one of only three companies globally with independent design and manufacturing capabilities for high-speed optical chips and optical modules. According to China Insights Consultancy, based on 2025 revenue, the company ranks seventh in the global optical module market with a 2.9% market share. Source Photonics' 100G PAM4 EML chips have been used cumulatively more than ten million times in 400G and 800G optical modules, and its 200G PAM4 EML chips have entered mass production and support volume supply of 1.6T optical modules. The company possesses complete self-developed technology from optical chip development to optical module manufacturing, with reserves in both EML and silicon photonics technology routes. Its dual-track development route for 800G and 1.6T optical modules covers the mainstream of current industry product lines. Leveraging its technical advantages, the company continuously optimizes the performance of 800G and 1.6T optical module products while also accelerating the commercialization of optical modules at 3.2T and above specifications. More importantly, Suzhou Dongshan Precision Manufacturing's two tracks are not isolated. From electrical connections to optical connections, the company combines PCB technical expertise with optical chip and optical module capacity, establishing an integrated advantage in the high-speed transmission field that most peers do not possess, supporting the expansion of AI infrastructure. With high certainty of growth sustainability, this H-share listing will once again bring the company a value re-rating opportunity. Second investment cycle: H-share listing expected to gain favor In the capital markets, AI technology has multiple long-term investment allocation cycles. In the first round of AI infrastructure investmentincluding AI large models, AI chips, AI servers, and AI PCBstenfold bull stocks have emerged since 2024, such as Nvidia and TSMC; A-share Wus Printed Circuit, Shennan Circuits, and Suzhou Dongshan Precision Manufacturing also rose more than 10 times at their peaks. After AI infrastructure, the second round is the explosion of the application layer. This year the physical AI track has taken the spotlight, and tenfold bull stocks may be brewing. In fact, whether AI infrastructure or physical AI, AI PCBs and optical modules, as high-speed network interconnect hardware, both have enormous marketsjust like building multiple major cities, roads must be built to connect them. Therefore, Suzhou Dongshan Precision Manufacturing's dual tracks essentially cover the entire life cycle of the AI industry, allowing it to capture the market dividends brought by AI technology from beginning to end. This is also the core reason why the company places such importance on these two major tracks. Suzhou Dongshan Precision Manufacturing's A-share valuation has retraced over the past four months to an undervalued "allocation zone." H shares generally price with reference to A shares, and standing at the second investment outlet, H shares are dominated by global institutional investors with a more reasonable pricing mechanism, which is expected to smooth A-share volatility and enable re-valuation. Based on the HK$93.8 offer price, the company's market value would be HK$338.798 billion, with a (dynamic) PS of only 4.38 times. High-quality growth AI+ targets in the Hong Kong stock market are concentrated at PS values of 10-20 times, indicating clear undervaluation. Overall, Suzhou Dongshan Precision Manufacturing has entered the public offering stage and is just one step away from listing. The company's fundamentals are strong, with performance accelerating in 2026, and "AI PCB + optical module" have become the core growth engines as well as the focus of fundraising. These two major tracks have high industry prospects, cover the entire life cycle of the AI industry, and the company has positioning advantages in scale and product technology, with high certainty of growth sustainability. The company's market value has retraced sufficiently, and its H-share listing valuation is clearly undervalued. Coupled with being one of the few suppliers globally with integrated self-developed manufacturing capabilities across AI PCBs, optical chips, and optical modules, it is a scarce target and is expected to gain favor from long-term large capital.