Analysis Report on Aerospace and Storage Device Business Expansion of Kexiang Co., Ltd. (300903.SZ)

Based on the collected data, I will provide you with an in-depth analysis report on Kexiang Co., Ltd.'s business expansion in the aerospace and storage device sectors.

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Kexiang Co., Ltd. (Guangdong Kexiang Electronic Technology Co., Ltd.) was founded in 2001, is a high-tech enterprise focusing on the R&D, production and sales of printed circuit boards (PCB), and was listed on the GEM of the Shenzhen Stock Exchange in 2020. The company currently has five PCB manufacturing bases, respectively located in Huizhou, Shenzhen, Jiujiang, Ganzhou and Shangrao, forming a complete production capacity layout covering South China and East China [0][1].

According to the company’s 2024 annual report and 2025 semi-annual report, Kexiang Co., Ltd.'s product application fields cover consumer electronics, communication equipment, industrial control, automotive electronics, computers, medical devices, new energy and other segmented markets.

[1][2]. Due to customer confidentiality principles, the company has not disclosed specific customer information.

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The aerospace PCB market has high technical thresholds and growth potential. According to the Prismark research report, the global military/aerospace sector PCB output value increased from USD 3.514 billion in 2023 to USD 3.770 billion in 2024, and is expected to reach USD 4.864 billion in 2029,

[2]. This growth mainly benefits from:

• Sustained growth in demand for commercial and military drones
• Development of satellite internet and remote sensing technologies
• Upgrade demand for advanced avionics systems

The company has broken through the high-frequency hybrid lamination technical bottleneck in the 77GHz millimeter wave radar field, stably controlling the expansion and contraction tolerance of high-frequency board and FR4 hybrid lamination materials within 4mil. Combining stepped copper thickness and high-precision antenna technology, [1]. Aptiv is a world-leading automotive technology company and also an important supplier in the aerospace sector. This move marks that Kexiang Co., Ltd. has successfully entered the supply chain of aerospace and intelligent driving perception systems.

The company’s R&D team takes “technology penetrates the market” as its core philosophy, and continuously improves its technology matrix. From January to June 2025, the company’s R&D investment amounted to RMB 100 million, a year-on-year increase of 8.75%, accounting for 5.56% of operating revenue [1]. The company has mastered 16-layer arbitrary layer interconnection technology and 30-45μm ultra-thin PP lamination technology in the high-end HDI field, laying a technical foundation for the miniaturization and high performance of aerospace equipment.

The aerospace PCB market has the following characteristics:

• High certification barriers:
  Aerospace customers have very strict certification processes for PCB suppliers, requiring long-term quality verification and system audits
• High technical requirements:
  Need to meet special performance requirements such as radiation resistance, high temperature resistance, and high reliability
• Stable cooperative relationships:
  Once entering the supplier system, long-term large-scale cooperation with PCB suppliers is usually implemented

Relying on its cooperation experience with international first-tier enterprises such as Aptiv, Lear Electronics, and Joyson Automotive in the automotive electronics sector, Kexiang Co., Ltd. has the technical accumulation and quality assurance capabilities to enter the aerospace sector.

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The storage device PCB market benefits from data center construction and the growth of AI computing power demand, showing strong growth momentum. According to Prismark data,

, which is one of the fastest-growing application segments among all segmented markets [2].

This growth momentum mainly comes from:

• Upgrade demand for computing power infrastructure
• Rigid demand for hardware performance driven by artificial intelligence technology breakthroughs
• Growth in server procurement brought by data center expansion

Kexiang Co., Ltd.'s high-end HDI products are mainly applied to PCB products of storage devices such as computer motherboards, memory modules, and hard disks. The company clearly stated that its products can be applied to storage devices such as memory modules, and mass supply has been achieved [1][2].

1. Ultra-thick Board Processing Technology:
   Broke through the core technology of Birch Stream server PCBs, mastering core processes such as 2.6mm ultra-thick board back drilling tolerance of ±0.15mm, plating aspect ratio of 18:1, and impedance control accuracy of ±7%
2. Ultra-precise Circuit Technology:
   Broke through 35/35μm ultra-precise circuit technology (line width/spacing tolerance ±15%), mainly applied to AI servers, meeting the stringent requirements of data centers for high-speed computing and low-loss transmission
3. Optical Module Technology:
   Realized 30/30μm line width and spacing, 50μm laser blind vias, and application of M7/EM892K high-speed materials. Through nickel-palladium-gold surface treatment technology, the gold surface roughness is optimized to Rz ≤ 0.8μm, reducing transmission loss by 18%

The company’s key customers in the high-end HDI sector include Yidao Information, Huaqin Technology, Tonli Technology, DJI, Kuma Technology, Luxshare Precision, Wingtech Technology, Mobilwel, Inca Technology, etc. [1][2]. These customers have strong market positions in the consumer electronics, server, and storage device sectors, providing stable order sources for the company’s storage device business.

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Financial Indicator	Value	Evaluation
Market Capitalization	USD 8.585 billion	Mid-sized PCB enterprise
Price-to-Earnings Ratio (P/E)	-29.70x	In loss-making state
Price-to-Book Ratio (P/B)	4.97x	-
ROE	-16.06%	Profitability to be improved
Net Profit Margin	-7.91%	In loss-making state
Current Ratio	0.73	Weak short-term solvency

In 2024, the company’s HDI product revenue was RMB 643 million, , accounting for 18.93% of operating revenue, an increase of 4.5 percentage points compared to 2023 [2]. This structural change indicates that the company is transforming from ordinary PCBs to high-value-added products.

Subsidiary	Operating Revenue	YoY Change	Net Profit	YoY Change	Operating Highlights
Zhien Electronics	RMB 714 million	-12.26%	RMB 12 million	+2516.91%	Product unit price increased, profit improved significantly
Jiangxi Kexiang	RMB 616 million	+13.12%	-RMB 29 million	+45.62%	Production capacity released, economies of scale emerged
Ganzhou Kexiang	RMB 490 million	+37.02%	RMB 12 million	-17.46%	Production capacity continues to be released, operating revenue grows rapidly

The company’s current losses are mainly due to:

1. High fixed costs during capacity expansion period:
   The new capacity ramp-up period brings high depreciation and amortization pressure, and benefits have not yet been fully realized
2. Raw material cost pressure:
   The increase in copper and gold prices in 2024 led to higher raw material procurement costs
3. Product structure adjustment period:
   Voluntarily abandoned some low-margin orders to focus on high-value sectors

With the release of production capacity and the emergence of economies of scale, as well as the advancement of product structure optimization, the company’s loss margin has shown a narrowing trend.

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• ✅
  Broad market space:
  The global aerospace PCB market has a compound annual growth rate of 5.2%, and the market continues to expand
• ✅
  High technical barriers:
  First-mover advantage is obvious, and the competitive pattern is relatively stable
• ✅
  Breakthrough in customer certification:
  Successfully passed Aptiv’s certification, with the qualification to enter the aerospace supply chain
• ⚠️
  Small contribution currently:
  The aerospace business accounts for a relatively low proportion of the company’s revenue, and it is difficult to become a major profit driver in the short term

• ✅
  Fastest-growing segmented market:
  The server/data storage sector has a compound annual growth rate of 11.6%
• ✅
  Driven by AI computing power demand:
  The explosive demand for AI servers drives the growth of high-end PCB demand
• ✅
  Sufficient technical reserves:
  Has mastered the core technology of AI server PCBs, with mass production capacity
• ✅
  Stable customer base:
  Huaqin Technology, Wingtech Technology, etc. are all important manufacturers in the storage device sector

• Long market access cycle, requiring continuous investment in certification and verification
• Uncertainty in the pace of order release
• The aerospace industry has a strong cyclical correlation with the macro economy

• Fierce industry competition, with PCB enterprises laying out server/AI markets one after another
• High dependence on downstream server and storage device manufacturers
• Raw material price fluctuations have a great impact on profits

• Currently still in a loss-making state, with relatively large cash flow pressure
• Weak short-term solvency (current ratio 0.73)
• The stock price has increased by 177.20% in the past year, with the risk of technical correction

Evaluation Dimension	Aerospace	Storage Device	Comprehensive Evaluation
Market Space	★★★★☆	★★★★★	The storage device market has a larger space
Growth Certainty	★★★☆☆	★★★★☆	The storage device sector has more certain growth
Company Technical Reserves	★★★☆☆	★★★★★	The storage device sector has more mature technologies
Profitability Contribution	★★★☆☆	★★★★☆	The storage device sector is expected to contribute profits first
Comprehensive Rating	★★★☆☆	★★★★☆	The storage device sector has greater potential

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• Storage Device Sector:
  Expected to become a new profit growth driver for the company in the next 1-2 years. Benefiting from the growing demand for AI server and data center construction, the company’s breakthroughs in core technologies such as ultra-thick board processing and ultra-precise circuits provide a solid foundation for its storage device business. With the release of production capacity and optimization of product structure, the storage device business is expected to achieve volume and price growth.

• Aerospace Sector:
  Limited contribution in the short term, with significant long-term layout significance. Passing Aptiv’s certification marks that the company has successfully entered the aerospace supply chain, but it takes a long cycle from certification to mass supply, and it is expected to take 2-3 years to form large-scale revenue contribution.

1. The company is currently in a loss-making state, so investors need to pay attention to the profit inflection point
2. Raw material price fluctuations may affect gross profit margin
3. Intensified industry competition may compress profit margins
4. The stock price has risen sharply in the short term, so attention should be paid to the risk of technical correction

Investors should focus on changes in the following indicators:

• Changes in the proportion of HDI product revenue (reflecting the progress of product structure optimization)
• Breakthroughs in orders in the aerospace sector
• Changing trend of net profit margin (reflecting the improvement of profitability)
• R&D investment output efficiency

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[0] Jinling AI - Kexiang Co., Ltd. Company Overview and Stock Data (https://gilin-data.oss-cn-beijing.aliyuncs.com/financial_charts/fdb82ee1_300903_SZ_kline.png)

[1] Full Text of 2025 Semi-Annual Report of Guangdong Kexiang Electronic Technology Co., Ltd. (http://static.cninfo.com.cn/finalpage/2025-08-29/1224603736.PDF)

[2] Full Text of 2024 Annual Report of Guangdong Kexiang Electronic Technology Co., Ltd. (https://static.cninfo.com.cn/finalpage/2025-04-25/1223281829.PDF)

[3] U.S. and UK Aerospace and Defense PCB Market Report (https://www.fortunebusinessinsights.com/zh/u-s-u-k-aerospace-and-defense-pcb-market-106765)

[4] Official Website of Kexiang Co., Ltd. (https://www.gdkxpcb.com/)