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

Daily Economic News Reporter: Cai Ding    Editor: Zhang Yiming

Shennan Circuit (SZ002916, stock price 252.61 RMB, market cap 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%; non-recurring net profit 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 disclosed net profit of 3.276 billion RMB, the performance slightly falls short of expectations.

PCB Business Gross Margin Increased

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

As of the end of 2025, 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 listed companies were about 17.149 billion RMB, up 17.33% from the end of 2024.

Quarterly-wise, in Q4 2025, net profit attributable to shareholders was about 950 million RMB, a decrease of 1.65% from about 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, up 36.84% year-over-year, 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 R&D investment for the full year 2025 reached 1.591 billion RMB. The company made progress in high-end FC-BGA packaging substrate technology, with products of 22 layers or less already in mass production. The company added 137 new patents during the year. Additionally, the Thailand factory and the Nantong Phase IV project both successfully commenced production in the second half of 2025. Meanwhile, Nantong Shennan and Wuxi Shennan were recognized as “Advanced Smart Factories in Jiangsu Province” in 2025.

Net Profit Attributable to Shareholders Falls Short of Expectations, Management Expenses Increase Nearly 47%

Although net profit attributable to shareholders and non-recurring net profit in 2025 both grew by over 70% year-over-year, data from Wind Financial Terminal shows that 16 institutions’ consensus forecast for the company’s net profit attributable to shareholders in 2025 was about 3.378 billion RMB. Therefore, the company’s disclosed 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, despite a 74.47% year-over-year increase in net profit attributable to shareholders, the financial report indicates that the net cash flow from operating activities in 2025 was 3.838 billion RMB, a 28.71% increase.

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-over-year. Additionally, costs related to the Nantong Phase IV and Thailand factory construction, as well as increased salaries, caused management expenses to reach 1.065 billion RMB, up 46.9%.

Image source: Shennan Circuit 2025 Annual Report

Regarding costs and supply chain, Shennan Circuit stated that the sharp rise in prices of bulk commodities such as gold and copper led to increased prices for key raw materials like copper foil and gold salts; supply tensions for key materials like copper-clad laminates and electronic fabrics caused some copper-clad laminate delivery times to extend significantly. If commodity prices continue to rise or shortages occur, it will directly pressure the company’s operations.

Image source: Shennan Circuit 2025 Annual Report

The Daily Economic News also notes that in 2025, Shennan Circuit’s asset impairment losses reached as high as 287 million RMB (up from 189 million RMB in the previous period), including inventory write-downs and contract performance cost impairments totaling 218 million RMB, and fixed asset impairments of nearly 69 million RMB; at the same time, credit impairment losses amounted to 86.81 million RMB, up from 46.89 million RMB in the previous period. The significant increase in impairment losses directly eroded current profits.

Daily Economic News