New stock preview | Under the high prosperity of the PCB industry, "increased revenue without increased profit", how can Baofengtang submit another application to break through the cost dilemma?

Against the background of the comprehensive outbreak of the performance of the PCB sector in 2025, the revenue and net profit of leading companies have generally achieved double-digit or even triple-digit growth. The industry is entering a new cycle of technological upgrades and capacity expansion. Just entering April 2026, the price increase once again attracted market attention: Japanese Mitsubishi Gas Chemical announced a 30% price increase for its full range of high-end PCB materials such as copper-clad laminate and semi-cured sheet from April 1st, marking the third price adjustment by this international giant in half a year; at the same time, domestic electronic fiberglass leaders China Jushi Co., Ltd. and Henan Guangyuan New Material simultaneously finalized their price increase plan for April, with the factory price of the 7628 model electronic fiberglass rising to 6.5 yuan/meter, nearly 10% higher than in March, marking the fourth price increase this year. From the capital market to the industry end, this PCB price surge has been going on for a year. It has gone through six rounds of price adjustments with a cumulative increase of 47%-65%, and there is no sign of cooling down, but rather accelerating under the push of the continuous surge in demand for AI computing power. The industry's high prosperity is spreading along the industry chain to the upstream equipment segment - recently, Baofeng Tang, one of the top three in the domestic PCB plasma de-alkali residue equipment market, once again submitted documents to the Hong Kong Stock Exchange, with CMSC International as its exclusive sponsor, which is expected to accelerate expansion with the help of the capital wave. "Why does 'increased revenue not increase profit' occur in the PCB high-prosperity cycle?" According to the prospectus, Baofeng Tang has delivered what seems to be a stable revenue performance over the past three years. In 2023, 2024, and 2025, the company's revenues were 139 million, 150 million, and 176 million yuan respectively, with a compound growth rate over the three years maintained in a considerable range. However, the continued growth in revenue has not effectively translated into a simultaneous release of profits. In 2023, the company's annual surplus was 36.78 million yuan, increasing slightly to 39.243 million yuan in 2024, but by 2025, with revenue hitting a record high, net profit actually fell to 37.328 million yuan, down 4.9% year-on-year. Against the backdrop of the high prosperity of the PCB industry chain, this phenomenon of "increased revenue not increasing profit" stands out. The PCB industry is currently benefiting from the surge in demand for AI computing power and the upstream materials price increase, with listed copper-clad laminate companies such as Shengyi Technology seeing their net profit attributable to the parent company increase by 91.76% in 2025, and Nanya New Material Technology by 377.60%. Baofeng Tang, as an equipment supplier in the upstream of the industry chain, has not only failed to fully benefit from the industry's upturn cycle but has experienced a reverse deviation in profit and revenue. The deterioration of the profit margin is first reflected in the gross profit end. In 2023, 2024, and 2025, Baofeng Tang's gross profit was 73.83 million, 74.79 million, and 98.5 million yuan respectively. Although the gross profit in 2025 increased compared to 2024, the growth rate was far below the 27% growth in revenue for the same period. The gross profit margin decreased from around 49.96% in 2024 to about 55% in 2025 (estimated value). This trend reflects the cost structure problems unique to the PCB industry. The main raw materials for PCB equipment manufacturers include metal components, electronic components, and special chemicals, the prices of which all rose in 2025. Industry data shows that as one of the core raw materials in the PCB industry chain, copper foil accounts for about 30%-35% of the cost, with an average annual price increase of 15%. Fiberglass fabric supply remains tight, keeping prices high. Meanwhile, upstream materials in the PCB industry, such as copper-clad laminate and electronic fiberglass, experienced six rounds of price adjustments in 2025, with a cumulative increase of 47%-65%, and the price trend accelerated further in 2026 - Mitsubishi Gas Chemical of Japan increased the prices of its full range of high-end PCB materials by 30% from April 1st. More importantly, equipment manufacturers often have weaker bargaining power than downstream manufacturers directly facing end customers. The concentration of the PCB equipment industry is relatively low, with the combined market share of the top 5 companies in China at only 23.9%, which means that individual equipment manufacturers have limited room to pass on the cost increase to customers when faced with rising material prices. Baofeng Tang, as a manufacturer with a market share of only about 3.6% in a segmented field, is naturally constrained in pricing, and the cost pressure has to be absorbed internally, directly eroding the conversion efficiency of gross profit. Focusing on the core race track, accelerating domestic substitution and global layout From observations, looking at the business revenue composition data from 2023 to 2025, the company is transitioning from a single PCB equipment supplier to a high-tech platform enterprise driven by "PCB + semiconductor," with a clear strategic path and solid growth logic. Baofeng Tang's business structure presents a development pattern of "one core, multiple points," with a stable base in PCB plasma equipment and an accelerating rise in the semiconductor business. From 2023 to 2025, the revenue from equipment used in PCB manufacturing and other applications was 868 million, 791 million, and 1.038 billion yuan respectively, with the proportion of total revenue always maintained at over 59%. The "plasma de-alkali stripping equipment used in PCB manufacturing" serves as the core product, with the revenue share in the three years being 55.4%, 39.8%, and 43.5% respectively, with slight fluctuations but remaining the company's revenue pillar. This indicates that the company has established a solid market position in the field of PCB plasma treatment. More noteworthy is the company's active expansion into the higher technology barrier semiconductor field. In 2023, revenue from equipment used in semiconductor manufacturing was only 11.78 million yuan, accounting for 8.5%; by 2025, this business revenue had increased to 192 million yuan, accounting for 11.0%. Specifically, the revenue from "equipment used in semiconductor packaging" increased from 11.78 million yuan in 2023 to 158 million yuan in 2025, becoming the main engine of growth in the semiconductor business. This shift marks that Baofeng Tang has successfully entered a key link in the semiconductor industry chain, gradually breaking the monopoly of foreign manufacturers in high-end equipment such as dry residue removal and etching, achieving substantive breakthroughs in domestic substitution. However, this growth from scratch is more of a linear extrapolation under a low base, without forming a scale effect. Especially in the field of semiconductor packaging equipment, although revenue increased from 11.78 million yuan to 158 million yuan, compared to the revenue scale of tens of billions of yuan for leading domestic enterprises, Baofeng Tang's market share is still negligible. This gradual entry may not change its marginal position in the high-end semiconductor equipment field in the short term, and the so-called "domestic substitution" remains more at a conceptual level rather than a substantive technological disruption. Overall, the plasma treatment equipment industry in which Baofeng Tang is located is essentially a "hard technology" race track with high technological barriers and capital intensity. According to a Frost & Sullivan report, the Chinese PCB plasma processing equipment market was about 3.9% in 2024, and although Baofeng Tang ranks among the top three, its market share is only 3.9%, indicating low industry concentration and fierce competition. In the semiconductor field, it faces comprehensive suppression from giants like NAURA Technology Group and Advanced Micro-Fabrication Equipment Inc. China, which have already achieved breakthroughs in core equipment such as etching and residue removal at 28nm or even more advanced processes, while Baofeng Tang still mainly focuses on mid-to-low-end packaging equipment, with a significant technological gap. In conclusion, Baofeng Tang is standing at the intersection of the industry's high prosperity and its own profit pressure. On the one hand, the PCB price surge and the demand for AI computing power provide a rare window for capacity expansion for upstream equipment manufacturers, and the company's core product, plasma de-alkali stripping equipment, is still expected to benefit. On the other hand, rising raw material costs, high administrative expenses, lack of scale effect in the semiconductor business, and other issues have put the company in an embarrassing situation of "increased revenue not increasing profit." By submitting documents to the Hong Kong Stock Exchange again, if it can successfully go public, Baofeng Tang is expected to leverage capital strength to optimize its cost structure, increase research and development investment, and truly transform from a PCB equipment supplier to a high-tech platform driven by "PCB + semiconductor." However, in the face of fierce market competition and technological barriers, whether the company can effectively improve the quality of profits, turn revenue growth into profit release, remains a key issue for management and investors.