Han’s CNC etches out triple-digit growth on AI infrastructure boom

The leading specialized PCB equipment maker said its revenue more than doubled in the first half of this year, while its profit rose by up to 280%

Key Takeaways:

• Han’s CNC’s profit rose between 242% and 280% in the first six months of 2026, as the company credited booming demand for AI infrastructure
• The PCB equipment maker’s gearing ratio rose to 43% by the end of last year from 29% a year earlier, as it spent heavily to upgrade and expand its capacity

By Doug Young

Many believe that AI concept stocks have become overvalued, lifted by investor euphoria that may be premature. But there’s no doubt that a construction boom for data centers and other computing facilities that will power a future generation of AI applications continues to move ahead full steam.

That was a key message coming from an upbeat earnings forecast for the first half of 2026 released on Thursday by Shenzhen Han’s CNC Technology Co. Ltd. (3200.HK; 301200.SZ), a leading producer of the equipment used to make printed circuit boards (PCBs). Once considered an anonymous commodity found in electronics like smartphones and PCs, PCBs have suddenly become hot property due to their role as key components in the high-performance servers and other computing equipment required by AI.

As that demand soars, PCB makers and their equipment suppliers alike are tooling up not only their production capacity, but also their ability to make the high-performance computing products that AI demands. But that shift also requires some massive capital spending, which is one cautionary factor on many PCB company balance sheets.

The positive profit alert from Han’s, which we’ll detail shortly, comes just a day after PCB maker Delton Technology (1989.HK; 001389.SZ) issued a similar positive alert saying it expects to report its net profit rose between 85% and 95% in the first half of the year.

Han’s outdid Delton, saying it expects to report its profit more than tripled in the first half of this year, rising 242% to 280% to between 900 million yuan ($132 million) and 1 billion yuan during the six-month period from 263 million yuan a year earlier. Excluding non-recurring items, the profit increase would have been slightly higher, up as much as 300%.

Han’s added that its revenue more than doubled in the first half of the year. It previously reported its revenue grew 104% year-on-year to 1.96 billion yuan in the first quarter of 2026, signaling its revenue probably grew at a similar rate in the second quarter as well.

Han’s was quite happy to credit AI with the bounty.

“Against the backdrop of the ongoing large-scale deployment of computing infrastructures, including AI servers and high-speed network switches, the PCB industry continues to benefit from structural growth momentum,” the company said. “As a result, the revenue contribution from the company’s AI PCB-related solutions has increased significantly.”

While there’s no question that AI is coming and will change many things, including demand for computing power and electricity, there’s still the question of whether investors are valuing these stocks just a tad too strongly.

Han’s currently trades at a price-to-earnings (P/E) ratio of 54, which looks like the type of valuation usually awarded to high-growth internet companies. Fellow PCB equipment maker Circuit Fabology (9630.HK; 688630.SH) trades at an even higher multiple of 143, thanks partly to a 73% rise in its stock since the company’s Hong Kong IPO last month.

Delton and Victory Giant (2476.HK; 300476.SZ), both actual PCB makers, are similarly high with multiples of 47 and 42, respectively, while Kingboard (1888.HK), a maker of laminates that are a key PCB component, trades at a multiple of 87.

Post-IPO pullback

Han’s is quite typical of this group that previously operated largely in the shadows of the global technology world. The company was founded in 2002 in the Southern Chinese boomtown of Shenzhen, which has become the country’s PCB capital. It initially floated shares on Shenzhen’s ChiNext board for growth companies in 2022, and raised a fresh HK$4.63 billion ($591 million) from a second listing in Hong Kong this February.

The stock initially jumped after the listing, and roughly doubled from its IPO price of HK$95.80 at a peak in May and June. It’s fallen somewhat since then, though, at its close of HK$145 on Thursday before the positive profit alert, the shares are still up about 50% from the listing price.

Despite the recent share price pullback, investors are clearly impressed by the company’s triple-digit growth, both in its top-line revenue and bottom-line profit. As we’ve already noted, the company’s revenue rose 103% year-on-year in the first quarter of this year, accelerating from 73% growth for all of 2025, when the figure reached 5.77 billion yuan. Its first-quarter profit performed even better, jumping 177% year-on-year to 323 million yuan. And its latest forecast for 242% to 280% profit growth in the first half of the year means its profit growth likely accelerated to 300% or more in the second quarter.

The company produces from two manufacturing bases, the larger in its hometown of Shenzhen and the other in less-costly Jiangxi province, and says it was China’s largest specialized PCB production equipment manufacturer in 2024, with about 10% of the market. While it doesn’t appear to have plans to manufacture abroad, many of its clients are setting up new overseas facilities, most notably in Southeast Asia, as part of a drive by many Chinese companies to diversify their manufacturing footprints.

As that happens, Han’s said its sales outside China have been rising steadily, growing from just 1.3% of revenue in 2022 to 12.8% in the first 10 months of last year.

The recent pullback in the company’s stock could represent a needed correction, and the latest valuation, while high, could potentially be justified if Han’s really can maintain such strong profit growth. But one area that may also be raising some investor concerns is the company’s growing spending as it races to expand its capacity through massive new investment.

That element shows up on the company’s balance sheet, where its liabilities rose 121% last year – far faster than the 48% rise for its assets. The main factor behind the liabilities rise was a big jump in trade and bills payable related to its expansion. That drove the company’s gearing ratio up to 43% at the end of last year from 29% a year earlier – fast approaching the 50% threshold above which many may start to worry about becoming overleveraged.

That shouldn’t be a major problem if Han’s can continue to grow at its current triple-digit rate. But things could quickly change if the AI spending binge fails to sustain its current momentum.

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