Shares of Victory Giant Technology (Huizhou) Co., Ltd. (ASX: VGT) rose nearly 4% in trading. At the time of writing, the stock was up 3.8% to HK$426.6, with a turnover of HK$440 million.

Key Drivers Behind the Move

The company recently stated on an interactive platform that it currently has a sufficient backlog of orders, with business progressing smoothly. Order production and delivery are being fulfilled as normal.

Industry Outlook and Supply Dynamics

Looking at industry trends, signal transmission bandwidth is expected to continue upgrading, with material grades constantly improving. The layer count and complexity of high-layer count boards and advanced HDI are increasing. This trend is set to further consume high-end production capacity, with the effective output area (in square meters) showing a decreasing trend. In the medium term, the supply of high-end products is likely to remain relatively tight, with sufficient downstream demand to absorb new capacity additions.

Analyst Perspective on Growth Potential

Goldman Sachs views the company's AI PCB business as demonstrating strong growth momentum. This is attributed to robust end-demand for GPU and ASIC AI servers, coupled with the company's timely capacity expansion and formidable research and development capabilities.

The investment bank expressed a positive outlook on several factors. These include global growth in AI infrastructure, upgrades in AI PCB specifications, increased PCB usage within AI servers, customer expansion into ASIC AI server PCBs, commitments to R&D and capital expenditure, and the company's highly automated production lines and warehouse management systems.