Avary Holding (Shenzhen) Co., Ltd.: Riding the PCB Boom or Sinking in Valuation Bubbles?
Avary Holding, a Shenzhen‑listed manufacturer of printed circuit boards (PCBs), has found itself in the cross‑hairs of a market that is currently enamoured with high‑frequency communication components and AI hardware. With a market capitalization of approximately 234 billion CNY and a staggering P/E ratio of 63.43, the company sits at the extreme upper end of the valuation spectrum for its sector. While the company’s share price of 119.01 CNY (as of 2026‑06‑16) sits well below the 52‑week high of 122.97 CNY, the broader industry is experiencing a surge that could either lift Avary into the next echelon or expose it as a bubble‑fueled over‑valued asset.
The Industry Context: A Surge in Communication and AI‑Driven PCB Demand
- Communication ETFs such as the Huaxia Communication ETF (515050) are experiencing consecutive gains (3‑4 % daily). On 2026‑06‑17, the ETF surged 3.75 % and later 2.93 %, outperforming its peers. The ETF’s performance is underpinned by the rally of its core constituents—companies involved in optical modules, high‑density interconnects, and flexible PCBs.
- The CPO/PCB concept has become a rallying point. On 2026‑06‑18, the CPO+PCB concept’s weight in the market surpassed 80 %, signaling that investors are aggressively loading this sub‑sector.
- Institutional flows are pouring into the broader electronics hardware space. For example, on 2026‑06‑17, 京东方A attracted 31.75 亿元 of net inflows, and 鹏鼎控股 saw a net buy of 6.13 亿元. Although Avary is not directly mentioned in these flows, the same momentum that fuels these giants inevitably spills over to mid‑cap PCB producers.
Avary’s Position in the PCB Ecosystem
Avary specializes in high‑density interconnection, flexible, and rigid PCBs—products that are indispensable in the production of smartphones, 5G infrastructure, and AI chips. Its product portfolio aligns perfectly with the current market’s appetite for:
- High‑frequency RF boards used in 5G base stations.
- Flexible PCBs for foldable consumer devices.
- Rigid PCBs for AI accelerators and data‑center servers.
Nevertheless, Avary’s close price of 119.01 CNY sits on the lower edge of its 52‑week high (122.97 CNY), indicating that the market has already priced in a sizeable upside potential. The price‑earnings multiple of 63.43 is not merely high; it is a litmus test for sustainability. In a sector where profit margins are thin and capital expenditure cycles are long, a P/E above 60 signals that investors are betting heavily on future growth that may yet be unrealised.
The Risk–Reward Equation
| Factor | Potential Upside | Potential Downside |
|---|---|---|
| Sector Momentum | 5G roll‑out & AI hardware may drive PCB volumes to record highs. | Market could reverse if macro‑economic conditions deteriorate or supply chain disruptions occur. |
| Valuation | High P/E may be justified if Avary captures a significant share of the high‑growth PCB market. | Overvaluation risk if earnings lag behind price expectations or if competitors gain market share. |
| Competitive Landscape | Avary’s focus on high‑density and flexible PCBs places it in a niche with strong demand. | Intensifying competition from both domestic players (e.g., 中材科技, 鹏鼎控股) and foreign manufacturers could erode margins. |
| Capital Constraints | Ability to reinvest profits into R&D and capacity expansion could sustain growth. | Capital-intensive nature of PCB manufacturing may strain cash flows if revenue growth stalls. |
Key Takeaway
Avary Holding sits at the nexus of a bullish industry narrative yet is hampered by a valuation that presumes rapid, sustained growth. The company’s fundamental alignment with high‑frequency communication and AI hardware provides a clear growth story. However, the P/E of 63.43 acts as a cautionary flag: if the industry’s momentum stalls or if competitors innovate faster, Avary could see a sharp correction.
Investors should weigh the high upside potential of an expanding PCB market against the high valuation risk. A disciplined approach—monitoring earnings reports, capacity utilisation, and competitive positioning—will be crucial. In short, Avary is poised on a high‑stakes gamble: ride the PCB boom to the moon, or face a potential plunge if the tide turns.
