Recently, Dazu CNC (03200) released a quick performance report for the first three quarters of 2026. According to the data, the company achieved operating income of 7.841 billion yuan (RMB, same below), an increase of 100.90% year on year; net profit to mother was 1,544 billion yuan, an increase of 214.03% year on year. Looking at a single quarter, net profit returned to mother for the third quarter was about 587 million yuan. Although slightly down from 634 million yuan in the second quarter, the year-on-year increase was still considerable.
The gold content of this report card is that it validates an industry judgment: the chain of benefits from the AI computing power competition is being substantially transmitted from chips and servers to upstream precision processing equipment. In the announcement, Dazu CNC clearly stated that the increase in performance was mainly due to the significant increase in demand for high-end AI PCBs such as next-generation rack server computing power and high multi-layer HDI boards, N+N high multi-layer boards, and 800g and 1.6t high-speed optical module MSAP carrier boards.
However, the Zhitong Finance App noticed that the short-term reaction of the market to this was quite subtle — before and after the results were released, the company's H share price recovered. This short-term misalignment between performance and stock prices provides a window for observing the pricing logic of the current AI investment cycle.
The “shovel seller” in the wave of AI computing power
The core logic of Dazu CNC can be summed up with a “shovel seller”. In the AI computing infrastructure industry chain, PCBs are a key carrier for carrying chips and signal transmission, and Dazu CNC provides the special equipment needed to manufacture these high-end PCBs.
The company's main products are mechanical drilling machines, especially ultra-high thickness diameter ratio through-hole drilling machines for AI computing power scenarios and mechanical drilling machines with integrated high-precision 3D drilling and measurement, which have formed significant advantages in the global market. According to Prismark's market forecast and the company's delivery data estimates, this type of product will have a global market share of about 50% in 2025. At the same time, the company has also deployed CCD six-axis independent mechanical drilling machines, ultra-fast laser drilling equipment, LDI laser direct imaging equipment, and high-precision testing equipment, etc., which can provide complete solutions for high-multi-layer HDI boards and advanced packaging substrates.
At the customer level, the company's products have covered more than 80% of the world's top 100 PCB companies, and have formed deep ties with many leading domestic PCB companies. When AI computing power construction enters a booming stage, downstream PCB manufacturers are more willing to expand production, and the device side will naturally take the lead in benefiting. Dazu CNC's revenue doubled and net profit more than tripled in the first three quarters, which is the result of this chain being realized.
Product structure upgrades drive high performance growth
Judging from financial performance, the current round of growth of Dazu CNC did not simply rely on the expansion of order numbers; it more clearly shows the improvement in profit quality brought about by the product structure upgrade. In the first half of 2026, the company's net profit to mother increased 263.45% year on year, and net interest rate increased significantly; net profit to mother reached 1,544 billion yuan in the first three quarters, and net profit growth rate after deducting non-return to mother was even higher, reaching 222.52%. The profit growth rate continues to be higher than the revenue growth rate, indicating that the increase in the share of high value-added equipment is driving the increase in overall profitability.
The Zhitong Finance App noticed that AI PCBs are putting forward structural upgrade requirements for processing processes, and this change falls precisely on the part that Dazu CNC is best at. AI servers use more PCB layers and higher wiring density, and the number of drilling holes has increased dramatically. At the same time, requirements for signal integrity have made back drilling processes indispensable; as PCB materials are iterated from M8 to M9 to higher levels, traditional processing solutions also face bottlenecks in accuracy and yield, and demand for new process equipment such as ultra-fast laser drilling has been released. High-multilayer boards, high-grade HDI boards, and advanced packaging substrates place higher and higher requirements for drilling accuracy, pile control, back drilling quality, and inspection capabilities. Traditional equipment is difficult to meet, and the unit price and gross margin of high-end equipment are corresponsively higher.
With technologies such as CCD back drilling, integrated 3D drilling, and ultra-fast laser drilling, etc., Dazu CNC has increased the added value of a single device and enhanced the bargaining power of orders. Judging from the position of the industrial chain, the company is in a “high technical threshold, long customer certification cycle, and difficult replacement”, which makes it highly flexible in the AI computing power expansion cycle.
However, the market is also keeping an eye on the quarterly pace. According to the performance report split, the company's net profit for the third quarter was about 587 million yuan, down about 7% from the second quarter's 634 million yuan. This change does not mean a reversal of the trend. The equipment industry's order confirmation, delivery pace, and revenue carry-over itself fluctuate, and quarter-on-quarter changes require further observation in conjunction with subsequent orders and contracts in hand. However, looking at the first three quarters as a whole, the company's revenue and profit both maintained high growth, and the profit quality was still improving.
Behind the stock price correction
In fact, the performance was impressive and the stock price pulled back. On the surface, there are some contradictions, but judging from the logic of the operation of the capital market, it is not surprising. Dazu CNC A shares experienced a significant rise in the first half of 2026, reaching a high of 395.36 yuan during the year. Since then, they have fluctuated and declined, and H shares have also retreated significantly from a high level. In a context where the early stock price fully reflected AI computing power expectations, high valuation accumulation, and high profit margins, some of the funds chose to be disbursed after the performance report was disclosed, which is a typical “favorable cashout style” fluctuation.
The deeper reason actually occurs at the level of pricing logic. Huatai Securities pointed out in a recent research report that global AI asset performance differentiation has intensified since mid-September, the market focus is shifting from “demand certainty” to “return elasticity,” and capital expenditure is no longer viewed as a single pricing anchor for AI assets. In other words, the capital market is no longer giving high premiums just because a company is in the AI industry chain, but is beginning to examine in more detail the continuity of orders, the pace of downstream capital expenditure, whether gross margins can be maintained, and whether valuations have overdrawn future growth ahead of schedule. Dazu CNC is in the PCB special equipment industry. It has strong cyclical characteristics. Equipment orders are often ahead of the release of downstream production capacity, so the market will be more sensitive to its subsequent quarterly performance.
However, in the research report in early October, Citi held a more optimistic view. It believes that the year-on-year increase in the monthly revenue of a large number of technologies in the Taiwanese industry is still accelerating, reflecting the continuation of the boom in PCB manufacturers' production expansion, and there is no sign of slowing down. It can be seen that the market has yet to reach a consensus on the duration of the AI capital expenditure cycle.
For Dazu CNC, what is still worth paying more attention to is whether its fundamental trend is still improving. Judging from industrial logic, AI computing power construction is not over. Data centers, servers, switches, and high-speed optical modules are still being upgraded. As the core carrier of computing power hardware, the trend of high-end PCBs is clear. As long as downstream high-end PCB production capacity continues to expand, device-side demand will be supported. As a global leader in PCB equipment, the company has technical and customer advantages in key processes such as drilling, and is also accelerating overseas expansion in Southeast Asia, etc., which is expected to further open up room for growth.
Looking at the company's financial structure, by the end of the third quarter of 2026, total assets increased by 81.23% compared to the beginning of the period, owners' equity attributable to shareholders of listed companies increased by 104.21%, and net assets per share increased to 25.35 yuan. On the one hand, the expansion in asset scale comes from capital raised through the issuance of H shares. On the other hand, it also reflects an increase in operating assets such as accounts receivable and inventory after the scale of production and sales was expanded. For equipment companies, the rise in operating assets during the period of high order growth is a common phenomenon. In the future, as delivery and repayment progress, the balance sheet is expected to improve further.
Of course, capital markets never set prices linearly. An upward trend in fundamentals does not mean that stock prices will rise at the same time; a short-term correction in stock prices is not tantamount to damage to long-term logic. What Dazu CNC is currently in is a stage where high performance growth and valuation rebalance intersect: on the one hand, demand for high-end PCB equipment driven by AI computing power is being fulfilled; on the other hand, the market is re-evaluating its growth sustainability and valuation position using stricter standards. This kind of “time difference” often causes fluctuations, but for core equipment companies with technical barriers, customer stickiness, and order support, as long as industry trends do not change, the ability to deliver performance will still be the key to ultimately anchoring value.