From September 14 to 15, 2026, the A-share PCB (Printed Circuit Board) sector experienced a collective surge over two consecutive trading days: Zhejiang WAZAM New Materials (WAZAM New Materials) hit the daily limit three times in seven days, Guangdong Goworld Co., Ltd (Goworld) hit it five times in seven days, and Aohong Electronics hit it three days in a row. Concepts related to CCL (Copper Clad Laminate), electronic fiberglass cloth, and copper foil all followed the rally. The sector's exuberance was attributed to the "AI computing power rally," but what is truly happening at the industrial level is more intriguing than the thematic narrative — CCL manufacturers are ordering from upstream suppliers on a monthly basis, while PCB manufacturers are using CCL price increase notices to negotiate with downstream customers. A price hike triggered by the "inability to source materials" is shifting bargaining power upstream step by step along the chain of electronic fiberglass cloth, CCL, and PCB.
The market is accustomed to using "demand explosion" to explain all rallies, but the eye of the storm for this round of PCB price hikes lies on the supply side. In the first quarter of 2026, electronic fiberglass cloth faced a shortage first, which eroded the profits of CCL manufacturers in the second quarter, and only transmitted to finished PCB products in the third quarter. Only by breaking down each link in this chain can we understand the underlying logic of the current valuation divergence.
01. The Truth Behind the Price Hike Wave: Electronic Fiberglass Cloth Chokes the Lifeline of AI Hardware
In 2026, electronic fiberglass cloth completed its fifth round of price increases for the year, with the average price of common specifications rising by approximately 100% from the low point in the third quarter of 2025; about 70% of the world's high-purity PPE resin production sites halted production due to shipping disruptions in the Strait of Hormuz, and it will take at least 275 days for the supply chain to recover. Kingboard Laminates, the leading CCL manufacturer, issued six rounds of price increase notices within the year, while Nan Ya and Panasonic successively announced price hikes of 20% to 30% starting from September 1. The pricing storm starting from electronic fiberglass cloth is inevitable: electronic fiberglass cloth is the skeletal material for CCL, with concentrated supply and long expansion cycles. Once a shortage occurs, the capacity utilization rate of CCL manufacturers cannot be fully utilized.
An unfulfilled capacity utilization rate means that PCB manufacturers cannot buy CCL and cannot deliver goods. However, PCB manufacturers that cannot deliver goods actually hold the most scarce chip downstream — bargaining power. Small and medium-sized PCB manufacturers have been raising prices month by month since May, switching their pricing benchmark from "synchronizing with material costs" to "executing at the spot price at the time of shipment." Some manufacturers directly use upstream price increase notices as the basis for negotiations with customers. Even leading listed companies are facing the situation of "being unable to buy CCL," making it even harder for long-tail suppliers to source materials. The net profit margin of some manufacturers may hit a record high in the third quarter, and the net profit margin of traditional non-AI products has recovered from low single digits to the double-digit range of 10% to 15%.
The rigidity of the three choke points upstream determines the sustainability of this round of price hikes. The expansion cycle for electronic fiberglass cloth is measured in years, resin supply is constrained by geopolitical disruptions, and the supply of high-end copper foil is tight. The three factors jointly cap the production ceiling of CCL. More importantly, the price hike itself will induce downstream panic buying — customers lock in orders in advance and extend their inventory stocking cycles, which in turn further tightens the supply, forming a self-reinforcing positive feedback loop. This is also the deepest difference between this round and historical price hikes: in the past, costs pushed prices up, and price was the result; now, scarcity forces prices up, and price has become a tool for gaming.
The tension has already spilled over to the terminal end. Terminal customers generally report prolonged PCB delivery times, and some module manufacturers have had their own shipping schedules disrupted due to the inability to procure PCBs or delivery delays. Inventory behavior at every level of the industrial chain is adding fuel to the fire for price hikes: downstream customers lock in orders in advance, while upstream suppliers hold back sales waiting for price increases. Every price adjustment becomes a reason for the next round of hoarding. Therefore, the profit recovery in the third-quarter reports is guaranteed, and how long the tight balance can be maintained depends on the resumption of production progress for electronic fiberglass cloth and resin.
The revelation from this chain is that the bottleneck in AI hardware manufacturing has extended from chips to materials. Over the past decade, the price adjustment cycle in the PCB industry was measured in half a year or a year. Now, monthly price hikes have become the norm, driven by the rigidity of supply-demand mismatch — expansion takes time, customer certification takes time, and the tight supply pattern is difficult to substantially alleviate before 2027. Price hikes are shifting from a one-time cost compensation to a redistribution of profits in the industrial chain. Whoever holds the materials and capacity stands at the upstream of the distribution. This is also why, in this round of market rally, the stock price elasticity of CCL and electronic fiberglass cloth manufacturers is much greater than that of PCB board manufacturers: what the market is pricing is the shift of discourse power along this chain.
02. Valuation Stratification: The Private Placement Story of WAZAM New Materials and the Beta of Tier-2 and Tier-3 Players
The most typical sample in this round of rally is WAZAM New Materials. This CCL manufacturer, which once suffered losses for two consecutive years, achieved a net profit attributable to shareholders of CNY 173 million in the first half of 2026, a year-on-year increase of 305.28%. In March, it rolled out a CNY 1.2 billion private placement plan, of which CNY 1 billion was invested in an annual production project of 12 million sheets of high-grade CCL. The plan was accepted by the Shanghai Stock Exchange (SSE) in August, and the inquiry reply was completed in mid-September. With a complete story chain of private placement for capacity expansion, performance turnaround, and domestic substitution of CBF film benchmarking against ABF film for semiconductor packaging materials, its stock price has surged by over 400% this year, and the price-to-earnings (P/E) ratio once touched 109 times on September 9.
Zooming out, the valuation of WAZAM New Materials reflects the divergence of the entire sector. When Shenwan Hongyuan first covered the company in April, it estimated that the net profit attributable to shareholders for 2026 to 2028 would be CNY 470 million, CNY 770 million, and CNY 970 million respectively, corresponding to a forecast P/E ratio of about 20 times for 2026. Calculated based on the market capitalization of CNY 39.4 billion in mid-September, even if all profit forecasts are fully realized, the valuation has already priced in the optimistic scenario of "doubling capacity and doubling net profit" in advance. The company itself warned in its August announcement that high-end CCL in the AI computing power field accounts for a relatively limited proportion of total revenue. The authenticity of the private placement story is unquestionable, but the gap between the stock price and fundamentals is being widened by time.
In contrast to WAZAM New Materials is the valuation stratification: the valuation center of tier-1 PCB manufacturers is about a 20x P/E ratio in 2027, broad tier-1 is 15 to 20 times, and tier-2 and tier-3 manufacturers are only 10 to 15 times, with some below 10 times. WUS Printed Circuit achieved a net profit attributable to shareholders of CNY 2.923 billion in the first half of the year, a year-on-year increase of 73.72%; Shengyi Technology saw a net profit year-on-year increase of 130.42%; and Victory Giant Technology saw a net profit year-on-year increase of 33.3%. The visibility of AI orders for these companies is measured in quarters, and EPS upgrades are an ongoing dynamic rather than a one-time realization. The consensus formed in industrial exchanges is that the catch-up rally of tier-2 and tier-3 players is essentially pricing recovery. Once the net profit margin recovery in the third-quarter reports is realized, the process of valuation center upward shift will come to an end. The rally of tier-1 manufacturers is driven by AI new product restocking and continuous EPS upgrades. WUS, Victory Giant Technology, Shennan Circuits, and Kinwong Electronics on the Rubin and TPU industrial chains have significantly higher visibility of performance realization. The leading suppliers on the NVIDIA and Google chains have built high barriers, and the landscape will remain stable before 2027.
In a price hike rally, the P/E ratio is inherently distorted. When the earnings of cyclical stocks are in the process of recovery, the P/E ratio often appears artificially high; the 109x valuation of WAZAM New Materials implies the assumption that all profit forecasts for the next two years will be fully realized and the upgrade of high-end product structure will proceed as scheduled. The focus of divergence lies here: if a new round of price hikes in the fourth quarter is implemented as scheduled and high-end capacity is fully utilized, the valuation will be quickly digested; once the pace or magnitude of the price hike falls short of expectations, the valuation elasticity will also be released downward. The boundary between cyclicality and growth is becoming blurred on such targets.
Putting the two layers of valuation together, the essence of this round of rally becomes clear: the market first prices in "pricing elasticity" and then "earnings certainty." At the current stage, pricing elasticity has been fully traded, and the third-quarter reports are the watershed — how much of the net profit margin recovery is realized will determine whether the catch-up rally of tier-2 and tier-3 players can continue. The value re-rating of tier-1 manufacturers needs to wait for the realization of EPS upgrades to resonate with the catalysis of the new AI narrative. The story of private placement for capacity expansion is still ongoing, but the gap between valuation and performance will ultimately have to be bridged by time.
As this structural rally reaches today, the valuation has already completed a leap ahead of performance. For leading manufacturers that have entered the AI supply chain, technological barriers and capacity occupation determine the certainty of earnings; for tier-2 and tier-3 manufacturers whose performance is driven by price hikes, the net profit margin recovery in the third-quarter reports is the only touchstone. The private placement story of WAZAM New Materials is still unfolding, but the 109x P/E ratio has already written the optimism for the next two years into today's stock price. The next phase of the PCB industry's rally belongs to performance, and belongs to companies that can continuously deliver.
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