汇丰-中国科技：AI基础设施：盈利是关键

3November2026

ChinaTechnology

Equities

CommunicationsEquipment

AIinfrastructure:Thecaserestsonearnings

China

uAIspendingfacesgreaterscrutiny,butsupplierfeedbackstillsupportsstrongdemandvisibilityinto2027

uUpgradesdrivecontentgrowthinoptics,PCBs,andMLCCs;supplierpositioningshapesearningsgains

uInseparatereports,weinitiateonInnolight,Luxshare,ChaozhouThree-Circle,andVictoryGiant(allBuys)

Earningssupportselectiveupsideafterthecorrection.InvestorsareincreasinglyquestioningthedurabilityandreturnsofAIspending.Strongnear-termearnings

mightnotnecessarilypreventvaluationsfromfallingifconfidenceinlong-termgrowthweakens.However,ourrecentdiscussionswithsuppliersindicatestrongcustomer

demandvisibilityinto2027,withinitialfeedbackabout2028alsoconstructive.

Followingthesteepcorrection,weseeselectiveupsidesupportedbyearnings

growthandmeasuredvaluationassumptions,althoughfurthersectorde-ratingcouldoffsetearningsgrowth.Inourview,operatingtrendssupportourearningsforecasts.

AIinvestmentraisescomponentcontent.Hyperscalerdeploymentand

procurementplansremainthecoredriversofcomponentrevenuepoolgrowth,whilemonetisationandfundingcapacityshapethelong-terminvestmentcycle.Our

analysisexamineshowthisspendingtranslatesintoopportunitiesacrossthree

segments.Optics:(1)Largerclustersandhigherbandwidthperconnectionsupportoptical-transceivervolumesasdatacentrenetworkinfrastructureandoptical

transceiversdoubledatatransmissionspeeds.(2)Printedcircuitboards(PCBs):

MorecomplexAIserverandnetworkboardsraisePCBrequirementsforlayercount,signalintegrity,andmanufacturingprecision.(3)Multi-layerceramiccapacitors

(MLCCs):Higherpowerdensityfavourscompact,high-capacitancespecifications.Overseassuppliers’focusonhigher-valueapplicationscreatessubstitution

opportunitiesforqualifiedChineseplayers.WepreferLuxshare,followedbyChaozhouThree-CircleandInnolight,andVictoryGiant.AllBuys.

Valuationshavereset;earningsthenexttest.ConcernsaboutreturnsonAI

spendingandfinancinghaveweighedonthesector,butrecentAIhyperscaler

guidanceandsupplierresultsareyettoindicateabroaddemanddowngrade.Wewouldreassessifmajorcustomerscutcapexplansandoptical,PCB,andMLCCsuppliersalsoreportslowingsales,ordersorweakermargins.

Prefersupplierspositionedtocapturecontentupgrades.Inopticalinterconnect,wepreferInnolightforitshigh-speedtransceiverexposureandLuxsharePrecisionforitsbroaderinterconnectandprecision-integrationopportunity.InPCB,wepreferVictoryGiantTechnologyforitsexposuretoAIboardproductionandqualification.

InMLCC,welikeChaozhouThree-Circleforitsmanufacturingbaseandpotentialbenefitsfromproductupgrades.Acrossallfourcompanies,customerqualification,volumeexecution,andmarginresiliencearethekeydownsiderisks.

YuqianDing*

HeadofChinaTechnology&AutosResearch

TheHongkongandShanghaiBankingCorporationLimitedyuqian.ding@.hk

+85222885108

BingyiZheng*(Reg.No.S1700521060001)

Analyst,A-shareTechnologyHardware

HSBCQianhaiSecuritiesLimitedbingyi.zheng@

+862150662028

CaraSu*(Reg.No.S1700525070001)

Analyst,A-shareITHardwareResearch

HSBCQianhaiSecuritiesLimitedcara.z.h.su@

+862150662080

MichelLiu*(Reg.No.S1700524090001)

Analyst,ChinaAutos

HSBCQianhaiSecuritiesLimitedmichel.m.liu@

+861057952351

*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpursuanttoFINRAregulations

HSBCFundingtheFutureSurvey

AIandtheIPOwindow

Clicktoview

Disclosures&Disclaimer

ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.

Issuerofreport:TheHongkongandShanghaiBankingCorporationLimited

ViewHSBCGlobalInvestmentResearchat:

2

Chinatechhardwareteamcoveragecomps

TickerCompany

Rating

TP

PriceUp/Down-MarketcapDAVPE(x)EPSgrowthEPSCAGR

(LC)sideRMBmRMBm26e27e28e26e27e28e2026-28e

PEGPB(x)

27e27e

ROE

27e

AIInfrastructurecomponents

300308.SZInnolight–ABuy727.00553.0031%652,9891,443,34820.89.16.2173%128%48%84%0.14.258%

3308.HKInnolight–HBuy865.00676.0028%762,892115,28321.69.56.4173%128%48%84%0.14.458%

300408.SZCCTC–ABuy110.0079.2339%157,152343,68829.720.217.399%47%17%31%0.74.321%

6951.HKCCTC–HBuy131.0077.3069%183,60112,33824.616.714.399%47%17%31%0.53.523%

300811.SZPoco*Buy80.3664.5425%26,34053,94344.031.125.161%42%24%32%1.04.321%002138.SZSunlord*Buy54.0040.3234%32,51182,14325.919.315.823%34%22%28%0.73.620%

600183.SHShengyiTech*Buy191.5087.00120%211,323516,24728.019.014.1126%47%35%41%0.511.060%002916.SZShennan*Buy355.00233.0052%158,704183,39430.621.716.155%41%35%38%0.66.132%

300476.SZVGT–ABuy187.00139.0434%132,935437,06122.111.28.826%97%27%58%0.23.134%2476.HKVGT–HBuy178.00123.1045%155,30854,73716.68.46.626%97%27%58%0.12.334%

Average26.418.414.482%52%31%46%0.54.833%ChinaSemi

600584.SHJCET*Buy83.2049.0070%87,681377,35145.529.623.642%53%25%39%0.82.69%688484.SHSouthchip*Buy43.9029.4849%12,66514,212n.a.105.431.6-99%n.a.234%982%0.13.03%

603501.SHWillSemi*Buy104.7082.4527%102,76174,59533.823.817.7-24%42%35%38%0.63.013%688200.SHAccoTest*Buy519.90201.89158%40,60494,15237.626.919.536%40%38%39%0.76.928%

603986.SHGigadevice–A*Buy698.90257.80171%181,877812,90011.610.39.8802%12%5%9%1.23.439%3986.HKGigadevice–H*Buy936.03315.00197%212,48873,74112.010.710.2802%12%5%9%1.23.639%

688608.SHBestechnic*Buy182.14101.5379%24,05137,43733.019.914.1-13%66%42%53%0.42.815%002371.SZNAURA*Buy1032.00478.74116%348,501289,20149.835.724.526%39%46%43%0.86.520%

688126CHNSIG*Buy26.1016.2461%53,67485,188n.an.an.a-93%-307%n.an.an.a2.71%300661.SZSGMicro*Buy156.1081.4392%54,27374,09863.944.333.085%44%34%39%1.17.418%

688008.SHMontage*Buy185.00158.3017%194,681414,96559.744.435.235%35%26%30%1.57.217%688012.SHAMEC*Buy344.50213.6961%204,681349,23457.939.930.964%45%29%37%1.14.418%

Average43.852.135.4122%63%58%108%0.94.116%Comsumerelectronics

002475.SZLuxshare–ABuy56.0045.6023%350,392307,45318.512.39.29%50%34%42%0.32.421%2475.HKLuxshare–HBuy67.0045.3048%409,36512,44115.610.47.79%50%34%42%0.32.021%

1810.HKXiaomi–WBuy33.2026.4825%683,078233,89826.919.916.5-43%35%20%28%0.71.910%81810.HKXiaomi–WRBuy28.1422.5025%584,67415222.916.914.0-43%35%20%28%0.61.610%

2018.HKAAC*Buy58.3036.8258%44,12911,85112.010.58.620%14%22%18%0.61.212%2382.HKSunnyOptical*Buy86.9063.3037%69,30137,36914.612.110.7-14%21%13%17%0.71.614%

000725.SZBOE*Buy10.704.46140%164,927406,74518.413.911.245%32%24%28%0.51.18%002008.SZHan'sLaser*Buy167.0050.47231%51,964217,89220.013.310.7222%50%25%37%0.42.318%

Average19.214.711.932%30%21%26%0.61.914%

Note:Pricedasof30October2026.*CoveredbyHSBCQianhaiSecuritiesestimates.

Source:Bloomberg,HSBCestimates,HSBCQianhaiSecuritiesestimates

3November2026

EquitiesCommunicationsEquipment

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3November2026

Contents

Fromcapextocontent4

OpticalInterconnect11

PCBs21

MLCCs39

Disclosureappendix49

Disclaimer52

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3November2026

4

Fromcapextocontent

Ourin-housemodelestimatesUSD0.8trn-

USD1.2trncapexin2026-28eforthesixmajorUSCSPs

uAIinfrastructureinvestmentremainselevated,albeitunderrisingROIscrutiny

uOurmodelfindsglobalAIinfrastructurecapexwillrisetoUSD1.7trnin2028e,withhyperscalersCSPsforming73-79%ofthetotal

uRisingAIcapexistranslatingintohigherdemandforoptics,PCBs,andMLCCs

AIinfrastructurespendingsetsthebarfordemand

AIinfrastructureinvestmentremainsstructurallyelevated,supportinggrowthinaccelerator

hardwaredemand,networkingbandwidth,andcomponentcontentthrough2027-28,evenas

investorAIfatigueisspreadingandcapitalreturnvalidationhasbecomethedominantfocus.Tosystematicallyquantifyinfrastructure-drivencomponentdemandover2026-28,HSBChas

constructedabottom-upglobalAIcapexmodelfortotaladdressablecomputeinfrastructurespendingbasedonourin-houseforecastsfortheAIcapexofcloudserviceproviders’(CSP),andalsoincludedNeocloud/AIlab/telecomAIcomputepowerexpansionplansandsovereignAIinvestments.

OurmodelfindsthatglobalAIinfrastructurecapexwilltotalUSD1.3trnin2026e,USD1.6trnin2027e,andUSD1.7trnin2028e,withhyperscalers’CSPsformingthelargestbucketat73-79%oftotalspending,signallinghyperscalercapacityrolloutistheprimarydriverfordownstream

componentdemand,althoughitiscomingunderrisingreturnoninvestment(ROI)scrutiny.

RisingCSPcapexwithexpandedfinancingavailability

Accordingtoourin-houseanalysis,theaggregatedcapexbudgetforthesixmajorUScloudproviders–Alphabet,Amazon,Meta,Microsoft,Oracle,andCoreWeave–issettoincreasefromUSD423bnin2025toUSD817bn(+93%y-o-y,Exhibit1),USD1,108bn(36%y-o-y)andUSD1,207bn(+9%y-o-y)in2026-28e,inlinewithconsensusUSD811bntoUSD1,233bn.

Thiswillbedrivenbyincreasedinvestmentincompute,ledbyagenticAIandcomponent

inflation(especiallymemory),ofwhich78%(Exhibit6)isinvestedinITinfrastructure,includingservers(GPU/CPU,memory,andinterconnect,61%),networking(opticalmodules,switches,androuters,10%),andstorage(NANDandSSD,7%).China’sdomesticCSPsarealso

expandingcapexthoughbyasmallermagnitude,givenUSexportrestrictionsonAIchipsandthebettercostefficiencyofdomesticAImodels.

Ontopofcapex,off-balancesheetdealsareexpandingtheavailabilityoffinancing,andthefiveUShyperscalersandCoreWeavecollectivelyhavemorethanUSD1trnofleasesthathaveyettocommence.OurcreditstrategistsestimatethathyperscalersaccountforcUSD400-500bnofoff-balancesheetborrowinginadditiontotheirownbondissuance.

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Exhibit1.Hyperscalercapexexpectations

Historical

FY25a

ConsensusHSBCHSBCvsconsensusHSBCey-0-ygrowth_

AlphabetAmazon

Meta

Microsoft

Oracle

Coreweave

Total

91

128

72

65

56

10

423

202

223

140

116

93

38

811

304

283

194

196

106

51

1133

346

306

211

224

93

54

1233

205

220

141

116

95

41

817

270

270

176

228

120

44

1108

300

324

185

251

100

47

1207

2%

-1%

1%

0%

3%

8%

1%

-11%

-5%

-9%

16%

14%

-13%

-2%

-13%

6%

-12%

12%

8%

-14%

-2%

124%

71%

95%

80%

71%

294%

93%

32%

23%

25%

97%

26%

9%

36%

11%

20%

5%

10%

-17%

6%

9%

FY26eFY27eFY28eFY26eFY27eFY28eFY26eFY27eFY28eFY26eFY27eFY28e

Souroe:HSBCesfmates,VsibleAlphaconsensus

Exhibit2.AsAldevelops,capexhasseen

asignificantincreaseforUSCSPs..

1,400

USDbn1,201

1,200

1,000

800

600

400

200

20222023202420252026e2027e2028e

■AmazonGoogle■Microsoft■META■Oracle

1.092

416

806

241

2020

2021

2022

2024

2025e

2026e

2027e

2028e

2029e

2030e

Souroe:Boombergconsensusestimates,HSBCQianhaiSecurifes

Exhibit4.Breakdownofhyperscalercapexbyusage

UShyperscalercapexbyusage(USDbn)

■Servers&GPUsNetworkEquip

■PowerInfra

■CoolingSystems

□Land,Building&Construction

■DCSofware

■Fibre&Connectivity

200

100

Souroe:Factsetestimates,HSBC

1200

1100

1000

900

600

500

400

300

Exhibit3andalsoforChinaCSPs,althoughbyasmallermagnitude

SourceBloombergconsensusestimates,HSBCQianhaiSecurifes

Exhibit5.UShyperscalers'freecashflow

80UShyperscalercapexandfreecashflow(USDbn)

Microsoft

Aphabet

Oracle

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

2021202220232024202520262027Souroe:Factsetestimates,HSBC

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3November2026

6

Exhibit6.Aldatacentres-Alfactories:Acapexperspective,2026

ITinfrastructure

Servers

Compute(GPU,CPUJ.Memory(HBM)hntercornect(NVLink)

Networking

Opicalmodudes,swches,routers

Storage

Non-ITinfrastructure

Electricalsystems7%

Coolingsystems3%

Cablinginfrastructure|1%

10%

Security&fireprotectionsystems|1%

Constructionandothers

Services■3%

Software

Souroe:HSBCestimaes

Relatedreports

AlandtheIPOwindow-HSBCFundingtheFutureSurvev(21October2026)

ChinaEauitvStrateav-AtaleoftwoAIcomputechains(22September2026)

PowerinaAI-Electricalarchitecture:movingto800VDC(16September2026)

GlobalTech-HSBC'sKevTechInsiqhts:measuringmodels(15September2026)

GlobalTechnology-SustainableCSPcapextosupportAltrendthroughFY28e(12August2026)Comfortablybullish-GlobalEquityStrategy(10August2026)

CSPsrepresentthelargestshareofglobalAlcapex

Extendingbeyondheadlinehyperscalers'reportedcapex,ourmodelalsocapturesAl-centric

capitalformationacrossfivemajorinfrastructurestakeholders:(1)CSPAlinfrastructure-relatedcapexspendingandoff-balanceinvestmentindatacentres;(2)Neocloudcapexfrompure-playAlcloudproviders;(3)frontierAlLab'sself-developmentofdatacentres;(4)telecom

investmentinsupercomputing;and(5)sovereignAlinvestment.

Wedidnotindudeself-builtAldatacentrebusinessspending,givenlimitedtransparencyanditsrelativelymodestcontributiontotheaggregateglobalAlcapexpool;examplesincludefinancialinstitutionsrunningin-houserisk-modelling.Ourbottom-upmodelestimatesglobalAl

infrastructurecapexofUSD1.3trninFY26e,USD1.6trninFY27e(+26%y-0-y)andUSD1.7trninFY28e(+5%y-0-y,basedonlimitedforwardvisibilitycurrently,asentitieshavenotyetreleasedtheirlong-termcapexguidanceheadinginto2028e).HyperscalerCSPsconstitutethelargest

singlebucket,representing73-79%ofaggregatespendovertheforecastperiod.ThisoutsizedshareindicateshyperscalersremaintheprimarydriverforincrementalAlhardwaredemand,andourdownstreamcomponentforecastsaresensitivetotherevisioninCSPcapexguidance.

OverseasCSPsAlcapexis8-9xthelevelofdomesticCSPs.ThisisprimarilyduetolimitedaccesstofrontiercomputepowerinChinaduetogeopoliticalrestrictions,whichshrinksthe

addressableglobalrevenuepoolavailabletomonetisethecomputecapacity.Meanwhile,UShyperscalersareexecutingamorecapital-intensive,strategicallyforward-leaningfrontier

computebuildoutamidtheglobalAlrace.WithmateriallylowerAlcapitalspendingvsUSpeersgivenexportrestrictionsandlowersoftwaremonetisationyields,China'sleadingplayersare

pushingtoprioritisehighercomputingefficiency.

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Exhibit7.HyperscalerCSPsrepresent73-79%ofglobalAlcapexin2026-28e...

(USDbn)

1,800

1,600

1,400

1,200

1,000

800

600

400

200

8%

65%

1.3tnUSD

1.6tnUSD

1.7tnUSD

+26%Y-o-Y

+5%Y--Y

FY26eFY27eFY28e

■OwerseasCSPDomesticCSP■Neodoud■AILabTdecom■SovereignAl

Exhibit8withoverseasCSPs'Alcapex8-9xhigherthanCSPsinChinain2027e

SovereignA,13%

Telecom,1%

AILab,3%

Naodoud,4%

DomesicCSP,8%

Note:OverseasCSPsindudeGoogle,Amazon,Meta,Microsoft,andOracle;

DomesticCSPsincudeAlibaba,Tencent,Baidu,NetEase,JD,andByteDance;

NeocoudincudeCoreWeave,andNebius;AlLabindudeAnthropic,OpenAl,andXAI;TeleoomincudeChinaMobile,ChinaTeloomandChinaUnicom,SovereignAlindudeChina,India,EuropeandMiddleEast.

Source:Companydata,VisibleAlphaestimates,HSBCesimates

Note:OverseasCSPsindudeGoogle,Amazon,Meta,Microsoft,andOracde;

DomesticCSPsincudeAibaba,Tencent,Baidu,NetEase,JD,andByteDance;

NeocoudincudeCoreweave,andNebius;AlLabincudeAntropic,OpenAl,andXAI;TeleoomincudeChinaMobile,ChinaTeloomandChinaUnicom;,SovereignAlindudeChinaIndia,EuropeandMiddleEast.

Souroe:Companydata,VisibleAlphaestimates,HSBCesfimates

WhileAlcapexremainsrelevant,themarkethasrecentlyshifteditsfocustowardreturn

validationforcapitalspending.Metaraisedits2026capexguidancetoUSD135-145bn(fromUSD130-145bn)onits3Qearningscall,yetitsstockdeclined7%thesubsequenttradingday(vsS&P500down1%overthesameperiod).Thisillustratesthatheadlinecapexgrowthaloneisnolongerthedominantsharepricedriver.Investorsareincreasinglyscrutinisingfreecashflow

sustainabilityandtheretumsgeneratedbycapitalspending.Atthesametime,CoreWeave's

5-yearcreditdefaultswap(CDS)spreadhitrecord-highdistresslevelsasofmid-October2026.Againstabackdropofhigherborrowingcostsandrisinguncertaintyaroundthelong-termreturnsofsubstantialAlinvestments,investorsentimenttowardsAlspendinghasinflectedmaterially.AccordingtoHSBCDataScience&Equitiesresearch,mostinvestors(62%)stillseescopeforAlcapextogrowbutarenowsomewhatlesssureitisbeingspentwell(38%believeAlcapexisoverextended).

Exhibit9.Only62%ofinvestorsbelieveAlcapexspendingwillkeeprising

Jul2026

Dec2025Oct2025 jul2025Mar2025

20100

%TotalResponse

Source:HSBC-SurvationFundingTheFutureSurvey

Exhibit10.38%ofinvestorsexpectAlcapexisoverutilised

Over-utilisedUtilisedaboutrightUnder-utilised

Oct2026Jul2026

Dec2025

Oct2025 Jul2025Mar2025

20100%TotalResponse

SourceHSBC-SurvafonFundingTheFutureSurvey

Slowerfrontier-modelannualisedrecurringrevenue(ARR)growthdoesnotnecessarilytranslateintoweakerAlhardwaredemand

Wearecautiousaboutreadingtoomuchintoreal-timeARRestimatesforfrontier-modelcompaniesasmanyarethird-partyestimatesratherthancompany-reportedfigures.Morefundamentally,ARRisprimarilyamonetisationmetricwhileinfrastructuredemandultimatelydependsontheamountofcomputebeingconsumedandthecapacityrequiredtoservethatusage.

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Near-termcomponentordervisibilityremainssolid

Forhardware