Victory Giant Soars 600% on Nvidia Deal, Dominates Asian Markets
Amid ongoing clashes between the US and China regarding tariffs and trade restrictions, this year’s most sought-after Asian stock illustrates the continued interdependence of the two nations. Shares of Victory Giant Technology Co. have surged nearly 600 per cent this year, outperforming the MSCI Asia Pacific Index, buoyed by its connections to key customer Nvidia Corp. The Chinese manufacturer of printed circuit boards is recognized for its specialization in artificial intelligence applications and its capacity to swiftly address customer requirements. It distinguishes itself from other recent leading stock performers that highlight the disparity between US efforts to onshore tech production on one side and China’s initiative to enhance self-reliance on the other. “Victory Giant Technology’s recent surge highlights how critical US-China relations remain to the global tech ecosystem,” stated Gerald Gan. “While both sides continue to compete in advanced chip development, the reliance on Chinese manufacturers for essential hardware components shows that full separation is impractical in the near term.”
Last week’s high-level talks have created uncertainty regarding the potential sale of Nvidia chips in China, leading to negative sentiment that has caused Victory Giant’s stock to decline by 13 percent over the past two sessions. However, it is evident that the US chipmaker continues to depend on the China supply chain, which has been described as a “miracle” by its Chief Executive Officer Jensen Huang. Regardless, it is clear that the world’s hyperscalers will persist in their substantial investments to expand their AI services. Nvidia is poised to reap ongoing advantages from this, alongside its suppliers. Companies referred to as “pick-and-shovel” entities, which hold dominant market positions, have been garnering significant rewards from investors. A prime example is the leading AI chip foundry Taiwan Semiconductor Manufacturing Co., whose market value surpassed $1 trillion for the first time this year. Victory Giant’s rapid ascent has resulted in an eightfold increase in its market capitalization since early January, reaching recent levels exceeding $40 billion. The firm is recognized as a leader in high-density interconnect and multi-layer PCBs that are essential for AI chips. Meeting the intense demand from customers has proven challenging for certain suppliers, including SK Hynix Inc., which announced on Wednesday that it has completely sold out its memory chip inventory for the upcoming year. Victory Giant has not encountered such issues.
According to Victoria Mio the Huizhou-based company possesses “the ability to scale up very quickly and is willing to invest in the capacity, which is very important criteria for Nvidia or buyers allocating their orders.” Established in 2006, Victory Giant has been listed on the Shenzhen Stock Exchange for just over ten years. The intention to raise approximately $1 billion through a Hong Kong listing has provided a significant boost in recent months, complemented by robust AI-driven results. The company’s third-quarter net income soared by 260 per cent compared to the previous year, with sales increasing by 79 per cent to exceed 5 billion yuan ($715 million). As of last year, there were more than 2,000 PCB manufacturers worldwide. However, earlier this year, Victory distinguished itself by leading in sales for AI and high-performance computing, as noted by Sumeet Singh. The company derives approximately 60 percent of its sales from international markets, likely all attributed to Nvidia, considering Victory’s high-end expertise, he stated. Despite the significant increase in its share price, Victory Giant is trading at 32 times estimated earnings for the next 12 months, which is considerably lower than the over 100 times seen for Chinese chipmakers Semiconductor Manufacturing International Corp. and Cambricon Technologies Corp.
It stands at approximately the same level as Nvidia’s valuation. The street anticipates further growth, as all 16 analysts covering Victory Giant have unanimously assigned it a buy rating. The consensus price target indicates a projected increase of 16 per cent over the coming year. The current surge in significant AI stocks has raised apprehensions regarding the concentration within a limited number of companies. John Lin stated his intention to gain AI exposure through “secondary or back-end beneficiaries. PCB makers are great examples of that approach,” said Lin. “A PCB maker plays a critical role in enabling high-performance computing systems — after all, even the best chips in the world can’t function without a high-quality, precisely engineered board to sit on.”
