Victory Giant (A) China Meeting Highlights: Leading share confirmed, new customers acquired; buy

China Conference takeaways: leading sharereaffirmed, new customer wins; Buy Reiterate Rating:BUY| PO:455.00 CNY| Price:378.24 CNY Capacity and leading share drive earnings expansion 12 May 2026 We hosted Victory Giant during our China Conference. The company reiterated itscapacity expansion plan to reach CNY140bn by 2027. Near-term, factory 4 is ramping upsmoothly and factory 10 is already in the equipment move-in stage. While the capacityexpansion follows key customers’pipelines, Victory Giant is confident it can maintain50%+ share in key products. We view its aggressive and faster-than-peers’capacityexpansion, as well as proven technology, as supporting an extended earnings upcycle, Equity Solid customer diversification into ASIC Victory Giant notedthat it is expanding into almost all major ASIC customers, vspreviously being focused only on Nvidia. Mgmt. stated that it is ramping up 20L+ MLPCBfor a new customer and its market share will likely further grow into 2027 on potentialadoption of HDI. Additionally, Thailand facilities have received certification from multiple Katherine Zhu>>Research AnalystMerrill Lynch (Hong Kong)kexin.zhu@bofa.com Lift PO to CNY455; reiterate Buy Robert Cheng>>Research AnalystMerrill Lynch (Taiwan)robert.cheng@bofa.com We see extended business visibility from ongoingspec upgrades on the Nvidia platformas well as from a diversifying customer base. Meanwhile, the better mix should helpoffset the burden from depreciation and potential CCL cost hike, supporting a stablemargin. In the long term, we view design change (backplane) and technology migration(CoWoP) could continue to support AI server PCB supply chain’s valuation. We fine-tune2026-28E earnings estimates to reflect the capacity and margin outlook.We lift PO toCNY455 (30x 2027E P/E) from CNY400 (33x 2H26-1H27E P/E).We use 2027 as the Doris Kao>>Research AnalystMerrill Lynch (Taiwan)doris.kao@bofa.com Cindy Lo>>Research AnalystMerrill Lynch (Taiwan)cindy.lo3@bofa.com This research reportprovides general information only. No part of this report may be usedor reproduced or quoted in any manner whatsoever in Taiwan by the press or otherpersons without the express written consent of BofA Securities. >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictions. For acronyms, please refer toExhibit 5 BofASecurities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision. Refer to important disclosures on page 8 to 10. Analyst Certification on page 5. PriceObjective Basis/Risk on page 5. iQprofileSMVictory Giant (A) Company SectorIT Hardware Company Description Victory Giant Technology, established in 2006, is a globallyleading supplier of high-density printed circuit board,offering a comprehensive range of PCB products. Thecompany's products are widely used in servers (e.g., Nvidia,AMD, Amazon, Microsoft), telecoms (e.g., Cisco, ZTE), autos(e.g., Tesla, Bosch), and consumer electronics (e.g., Investment Rationale We have a Buy rating on Victory Giant, as we see thecompany is well-positioned to capture the ongoing PCBcontent value upside at AI server, thanks to its industry Stock Data Price to Book Value Price objective basis & risk Victory Giant (XENEF) We set our PO at CNY455, based on 30x 2027E P/E. Our 30x P/E is around 0.5SD aboveVictory Giant's past 10-year trading average, justified by strong earnings cycle, extendedbusiness visibility and a diversified customer base. 30x is also at the higher range ofChina AI server PCB peers' 2027E trading P/E, justified by Victory Giant's leading Downside risks: (1) slower-than-expected global AI cloud capex, (2) slower-than-expectedGPU platform upgrade, (3) significant market share loss to competitors, (4) supply chainbottleneck that caps server rack shipment, and (5) worsened US/China disputes. Upside risks: (1) stronger-than-expected global AI cloud capex, (2) faster-than-expectedGPU platform upgrade, (3) further market share gain at the expense of competitors, and Analyst Certification I, Katherine Zhu, hereby certify that the views expressed in this research reportaccurately reflect my personal views about the subject securities and issuers. I alsocertify that no part of my compensation was, is, or will be, directly or indirectly, related Special Disclosures Information on securities which are listed on the exchanges where ML Securities(Taiwan) Limited is not permitted to trade or solicit trades for clients is forinformational purposes only and is not a recommendation or a solic