PCB Business Gross Margin Increased by Nearly 4 Percentage Points! Shenzhen Sunwoda Electronics 2025 Net Profit Up 74% Year-over-Year Still Falls Short of Institutional Expectations, Production Capacity Bottleneck Causes Outsourcing Expenses to Surge Nearly 80%

Shennan Circuit (SZ002916, stock price 252.61 RMB, market value 172.069 billion RMB) released its 2025 annual report on the evening of March 12. The company achieved operating revenue of 23.647 billion RMB in 2025, a year-on-year increase of 32.05%; net profit attributable to shareholders of the parent company was 3.276 billion RMB, up 74.47%; net profit after deducting non-recurring gains and losses attributable to shareholders was 3.114 billion RMB, up 78.96%; basic earnings per share were 4.91 RMB, an increase of 34.15%. The company plans to distribute a cash dividend of 24 RMB per 10 shares (tax included) to all shareholders.

Image source: Shennan Circuit 2025 Annual Report

According to data compiled from Wind Financial Terminal, 16 institutions’ consensus forecast for Shennan Circuit’s net profit attributable to shareholders in 2025 is approximately 3.378 billion RMB. Therefore, based on the company’s disclosed net profit of 3.276 billion RMB, its performance slightly fell short of expectations.

PCB Business Gross Margin Increased

From a vertical perspective, Shennan Circuit’s revenue, net profit attributable to shareholders, and net profit after deducting non-recurring gains and losses in 2025 all reached new highs for the company since its financial data has been publicly available.

As of the end of 2025, Shennan Circuit’s total assets were approximately 30.583 billion RMB, an increase of 20.87% compared to the end of 2024; net assets attributable to shareholders of the listed company were about 17.149 billion RMB, up 17.33% from the end of 2024.

Quarterly-wise, in Q4 2025, Shennan Circuit achieved a net profit attributable to shareholders of about 950 million RMB, a 1.65% decrease from approximately 966 million RMB in Q3 2025.

Image source: Shennan Circuit 2025 Annual Report

Looking at business segments, as a key driver of performance growth, benefiting from strong demand in AI (artificial intelligence) computing infrastructure (such as AI servers, high-speed switches, optical modules, etc.) and automotive electronics, the company reported PCB (printed circuit board) revenue of 14.359 billion RMB during the reporting period, a year-on-year increase of 36.84%, with gross margin increasing by 3.91 percentage points to 35.53%.

In the packaging substrate segment, driven by demand for high-end DRAM products and processor chips, revenue reached 4.148 billion RMB, up 30.8%, with gross margin significantly increasing by 4.43 percentage points to 22.58%.

The financial report shows that Shennan Circuit’s total R&D investment in 2025 was 1.591 billion RMB. The company made progress in high-end FC-BGA packaging substrate technology, with products of 22 layers or fewer already in mass production. Throughout the year, 137 new patents were authorized. Additionally, the Thailand factory and the Phase IV project in Nantong were successfully connected and put into operation in the second half of 2025. Meanwhile, Nantong Shennan and Wuxi Shennan were recognized as “Advanced Intelligent Factories of Jiangsu Province” in 2025.

Net profit attributable to shareholders did not meet expectations, with management expenses increasing by nearly 47%

Although Shennan Circuit’s net profit attributable to shareholders and net profit after deducting non-recurring gains and losses in 2025 both grew by over 70% year-on-year, data from Wind Financial Terminal shows that 16 institutions’ consensus forecast for the company’s net profit in 2025 was 3.378 billion RMB. Therefore, the company’s announced net profit of 3.276 billion RMB fell slightly short of the consensus forecast. However, it still exceeded the predictions of four institutions.

Image source: Wind

Furthermore, although the net profit attributable to shareholders increased by 74.47% in 2025, the financial report indicates that the net cash flow from operating activities in 2025 was 3.838 billion RMB, only a 28.71% increase year-on-year.

The annual report also disclosed that due to highly saturated orders, some internal processes experienced capacity bottlenecks, leading to a significant increase in outsourcing demand, with outsourcing costs rising by 79.28% year-on-year. Additionally, costs related to the construction of the Nantong Phase IV and Thailand factories, as well as increased salaries, caused management expenses to reach 1.065 billion RMB, a 46.9% increase.

Image source: Shennan Circuit 2025 Annual Report

Regarding costs and supply chain, Shennan Circuit stated that the prices of bulk commodities such as gold and copper surged significantly, causing key raw materials like copper foil and gold salts to also increase in price. Due to tight upstream supply of key materials like copper-clad laminates and electronic fabrics, the delivery times for some copper-clad laminates were greatly extended. If bulk commodity prices continue to rise or materials become scarce, it will directly pressure the company’s operations.

Image source: Shennan Circuit 2025 Annual Report

The “Daily Economic News” reporter also noted that Shennan Circuit’s asset impairment losses in 2025 reached as high as 287 million RMB (up from 189 million RMB in the previous period), including inventory write-downs and contract fulfillment cost impairments totaling 218 million RMB, nearly 69 million RMB in fixed asset impairments, and credit impairment losses of 86.81 million RMB, up from 46.89 million RMB in the previous period. The sharp increase in impairment losses directly eroded current profits.

Daily Economic News