Tianfeng Securities | Shenglan Technology Continued Recommendation: # Core Beneficiary of Domestic Supernode Ramp-up

English summary

Today Shenglan Technology surged +13%. We have forward-looking firmly recommended Shenglan as the core beneficiary manufacturer of domestic supernodes. With A customer supernode ramp-up, company performance is expected to grow rapidly. 1. The company currently has Molex's 224G authorization for A customer, and together with Molex as first/second supplier provides supernode backplane connectors to A customer, expected 40% share. 2. Expected to start batch shipment of A customer supernode cabinets at end of Q3, first batch about 600 cabinets. Next year may grow to about 4,000 cabinets. 3. Current single cabinet value is 670k, expected next generation value increase 40%, plus other supporting connector parts, single cabinet may exceed 1 million. Because pricing cannot deviate from Molex pricing, profitability is guaranteed, currently estimated profit margin over 20%. 4. Currently making liquid cooling products through subsidiary, sampling completed at A customer and in small batch, expected to supply A customer together with connectors, overall single supernode value may exceed a million level. ...