Intel performance impact: The proportion of XPU deployment approaches that of CPUs, contributing to the age of intermediary-type AI.

China (PRC) | Electronic ComponentsDelton Intel's Result Implications: XPU DeployingRatio Moving Toward CPU for Agentic Intel suggests its outlook for server CPU demand has improved, andexpects a strong year of double-digit unit growth for both the industry/Intel,with momentum extending into 2027. The ratio of CPU:GPU used to be 1:8on AI inference, but is now moving to 1:4, towards parity or even better going Strong demand outlook for server CPU from Intel into agentic AI era.On Intel's latest1QFY26 earnings conference, mgmt suggested the outlook for its server CPU demand hasimproved over the last 90 days, and expects a strong year of double-digit unit growth for boththe industry/Intel, with momentum extending into 2027. Mgmt also suggested the ratio of Reiterate Delton as a direct CPU proxy.We continue to view Delton as a top pick in thePCB sector, with high exposure to server (>70% rev exposure) market, especially to serverCPU (>50% of overall rev) with stable competitive landscape, making it one of most directbeneficiaries of the booming demand for CPUs. In addition, we believe its growth potential in Jacky He * | Equity Analyst +852 3743 8084 | jacky.he@jefferies.com Edison Lee, CFA * | Equity Analyst852 3743 8009 | edison.lee@jefferies.com Nick Cheng * | Equity Analyst+852 3743 8750 | nick.cheng@jefferies.com Matt Ma * | Equity Analyst852 3767 1109 | matt.ma@jefferies.com Annie Ping, CFA, FRM * | Equity Associate+852 3767 1273 | annie.ping@jefferies.com Company Description Delton Delton Technology (Guangzhou) Inc. manufactures multi-layer printed circuit board. Its core printed circuit board products include high-end server,5G communication, high-speed storage and automotive electronic PCB. The company was founded on June 17, 2002, and is headquartered in Company Valuation/Risks Delton Our price target of Rmb190.00 for Delton-A is based on end-2026E DCF, with a WACC of 9.8% and a terminal growth rate of 6.5% (2030E). Our pricetarget of HK$200.00 for Delton-H is based on 2026E/27E P/E of 41x/25x. Key risks include: 1) Deceleration in global AI capex growth; 2) Marketshare loss from escalating competition; 3) Slower-than-expected adoption of advanced PCB solutions due to technical barriers; 4) Technologyreplacement threat from other interconnection solutions such as copper cable and optical; and 5) Supply chain uncertainties or additional costs Intel Corporation Price Target: $80 implies 41x our CY28E EPS of $1.97. Upside: •PC TAM higher on Enterprise refreshes and earlier-than-expected AI PC applications. •Return to capital return commitment with dividend increase. Risks: •Larger-than-expected share loss to AMD and ARM CPUs in datacenter.•Decline in PC unit TAM and/or ARM disruption.•Delays to upcoming 18A product launches and/or Foundry customer traction.•Poor execution of manufacturing process technology transitions.•Dividend cut further. Analyst Certification: I, Jacky He, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views I, Edison Lee, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or I, Nick Cheng, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views I, Matt Ma, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views I, Annie Ping, CFA, FRM, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies)and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations Registration of non-US analysts:Jacky He is employed by Jefferies Hong Kong Limited, a non-US affiliate of Jefferies LLC and is not registered/qualifiedas a research analyst with FINRA. This analyst(s) may not be an associated person of Jefferies LLC, a FINRA member firm, and therefore may not be subject Registration of non-US analysts:Edison Lee, CFA is employed by Jefferies Hong Kong Limited, a non-US affiliate of Jefferies LLC and is not registered/qualified as a research anal