The stock of TIANLI HOLDINGS (00117) surged more than 11% in afternoon trading, extending a rally that has seen its price climb nearly 2,000% since the beginning of May, pushing its total market capitalization close to HK$60 billion.

As of this report, the shares are up 11.11%, trading at HK$8, with a turnover of HK$101 million.

Market Catalysts

According to Goldman Sachs, MLCCs (Multi-Layer Ceramic Capacitors) have become the third-largest cost component in the bill of materials for AI servers.

Murata Manufacturing raised prices for MLCCs used in AI servers by 15% to 35% effective April 1st. Subsequently, Taiyo Yuden increased prices for consumer-grade and automotive mid-to-low capacitance MLCCs by 6% to 13% in May.

Lead times for high-end MLCCs have now extended beyond 20 weeks. Data from Japan's Ministry of Finance shows that the average export price for Japanese MLCCs in April rose 16% year-over-year.

Company Background

Public information indicates that Yuyang Technology, a wholly-owned subsidiary of TIANLI HOLDINGS, serves as the core operating entity for the group's MLCC business.

Yuyang Technology is one of the leading domestic players in China's MLCC industry and has been recognized as a national-level specialized and sophisticated "Little Giant" enterprise and a high-tech enterprise.

Its MLCC production capacity ranks as the largest domestically and among the top seven globally. The company holds a dominant global position in ultra-miniature MLCCs, accounting for over 95% of its total output.