Demand for AI servers and high-speed switches is strong, and Shanghai Electric Co., Ltd. is expanding its production capacity (Goldman Sachs)
Goldman Sachs updated its analysis on Shanghai Electronics Co., Ltd.
Goldman Sachs updated its analysis on Shanghai Electronics Co., Ltd. (WUS, 002463) following a tech trip to Thailand. The core is that the company's production capacity diversification continues to advance, and the AI network demand brought by AI servers and high-speed switches is driving orders ahead of time and strongly. Its valuation methodology is based on the company's year-over-year earnings per share growth in 2027-28 relative to its peers. Risks worth noting include: slower-than-expected migration of high-end AI servers and high-speed switches, intensifying competition in the AI PCB market, and slower-than-expected expansion of new production capacity. The market has some expectations for this growth trend, but whether the structural demand brought by AI can continue to be realized will be the key to the further upward movement of stock prices. One sentence conclusion: Hudian Electric Co., Ltd. is in a resonance period between the explosion of AI network demand and the expansion of its own production capacity. The long-term growth logic is clear, but it needs to pay attention to changes in the competitive landscape. Positive/negative: Positive for Shanghai Electric Co., Ltd. (002463). The market price is partly due to the growth in demand brought about by AI, but the mass production progress of the Thai factory and the introduction of new customers will be the key to future valuation increases. Catalysts: 1) The production ramp-up progress and customer certification status of the new factory in Thailand; 2) The market penetration rate of next-generation AI servers (such as GB300) and 800G/1.6T switches; 3) The company's EPS growth guidance for 2027-28.