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New Stock Spotlight | Dingtai High-Tech: World’s Top Seller of PCB Drill Bits, the Essential 'Shovel Seller' in the AI Computing Power Race

Dingtai High-Tech officially launched its Hong Kong IPO on June 30, 2026. As the only H-share leader globally in precision PCB manufacturing, Dingtai has specialized in the PCB tooling chain for over three decades and has become the world’s largest supplier by drill bit sales volume.
Dingtai High-Tech officially launched its Hong Kong IPO on June 30, 2026. As the only H-share leader globally in precision PCB manufacturing, Dingtai has specialized in the PCB tooling chain for over three decades and has become the world’s largest supplier by drill bit sales volume. Industry Positioning and Core Business To understand Dingtai High-Tech’s business, first grasp the PCB manufacturing process. Printed Circuit Boards (PCBs) serve as the foundational substrate for all electronic devices, densely populated with tens of thousands of micro-vias that enable interlayer electrical connections. Each hole drilled consumes one drill bit. Drill bits are standard consumables—discarded once worn out. A single AI server’s multilayer PCBs require 13.5 to 195 times more drill bits than those in a conventional server. Dingtai High-Tech operates at the very upstream end of the PCB industry chain—it does not manufacture PCBs themselves but instead produces the cutting tools, materials, and equipment needed for PCB fabrication. In other words, it plays the role of the 'shovel seller.' Four business segments underpin its overall operations Precision Cutting Tools (RMB 1.74 billion in revenue in 2025, accounting for 83.5%) This is the company’s absolute core segment, encompassing PCB drill bits, end mills, specialty cutting tools, and CNC tools. Drill bits contribute the majority of revenue within the precision cutting tools segment. Both volume and average selling price of drill bits are currently accelerating upward. Volume: 1.132 billion drill bits sold in 2025, up approximately 40% year-over-year, with monthly production capacity exceeding 130 million units (world’s largest) Price: Average selling price of drill bits stood at RMB 1.22 per unit in 2025, up year-over-year...
Industry Positioning and Core Business
To understand Dingtai High-Tech’s business, first grasp the PCB manufacturing process. Printed Circuit Boards (PCBs) serve as the foundational substrate for all electronic devices, densely populated with tens of thousands of micro-vias that enable interlayer electrical connections. Each hole drilled consumes one drill bit. Drill bits are standard consumables—discarded once worn out. A single AI server’s multilayer PCBs require 13.5 to 195 times more drill bits than those in a conventional server.
Dingtai High-Tech operates at the very upstream end of the PCB industry chain—it does not manufacture PCBs themselves but instead produces the cutting tools, materials, and equipment needed for PCB fabrication. In other words, it plays the role of the 'shovel seller.'
Four business segments underpin its overall operations
Precision Cutting Tools (RMB 1.74 billion in revenue in 2025, accounting for 83.5%)
This is the company’s absolute core segment, encompassing PCB drill bits, end mills, specialty cutting tools, and CNC tools. Drill bits contribute the majority of revenue within the precision cutting tools segment. Both volume and average selling price of drill bits are currently accelerating upward.
Volume: 1.132 billion drill bits sold in 2025, up approximately 40% year-over-year, with monthly production capacity exceeding 130 million units (world’s largest)
Price: In 2025, the average selling price per drill bit was RMB 1.22, a modest 5.1% year-over-year increase, driven by a higher mix of premium products—micro-drills under 0.20mm accounted for 29.65% of sales volume, and coated drill bits represented 39.40%. These two product categories command unit prices several times—and up to 25 times—that of standard products.
Gross Margin: The gross margin for precision cutting tools stood at 41.67% in 2025 and rose to approximately 49.7% in Q1 2026, nearing the 50% threshold.
Lapping and Polishing Materials (approximately 9.3% of 2025 revenue)
Auxiliary materials used in precision PCB manufacturing processes, which complement the cutting tool business by offering PCB manufacturers an integrated 'tools + materials' bundled solution, helping enhance customer stickiness.
Functional film materials (3.5% of revenue in 2025)
This represents a weak spot in the company's diversified portfolio. In 2025, the segment’s gross margin turned negative at -6.96%, dragging down full-year profits and making it the only 'bleeding' segment in the current business matrix.
Intelligent CNC equipment (3.7% of revenue in 2025)
Includes CNC grinders, intelligent drill bit storage systems, and management software. The segment has already returned to profitability and will serve as a key entry point for delivering integrated 'equipment + operations' solutions to customers in the future.
Competitive landscape: Clear market leadership exists, but intense competition remains in high-end segments.
In 2025, the top five global PCB drill bit manufacturers collectively held approximately 75.7% market share.Dingtai High-Tech ranked first with a 29.2% share by unit volume,but by revenue, its market share was 22.9%, not far ahead of Japan-based Yoin Tools (21.6%) in second place or Jindu Precision, a subsidiary of China Tungsten New Materials, in third (19.7%).
One detail worth noting:Being the top seller does not necessarily mean leading in revenue; behind this is room for improvement in the high-end product mix.
Jinzhou Precision (controlled by Zhongwu High-Tech):It holds strong competitiveness in the niche market of high-end drill bits for AI servers, thanks to its proprietary mass-production technology capable of achieving an extreme length-to-diameter ratio of 240:1.
Union Tool (Japan):Maintains a deep technological moat in ultra-fine drill bits with diameters under 0.025 mm and micro-drills specifically designed for IC substrates.
Topoint Technology (Taiwan):Holds approximately 10% of the global market share and is Ding Tai High-Tech’s main competitor in the Taiwan market.
The global PCB drill bit market grew from RMB 4.1 billion in 2021 to an estimated RMB 6.0 billion in 2025, representing a compound annual growth rate (CAGR) of 10%. Frost & Sullivan forecasts the market will reach RMB 10 billion by 2030, with a CAGR of 9.6%—significantly higher than the projected 5.3% CAGR for the overall PCB market.
Why is its IPO worth watching?
Reason #1: A rare investment target with no direct peers
Currently, there are no Hong Kong-listed peers primarily engaged in PCB drill bits. Comparable A-share companies (Zhongwu High-tech, Wold, and Oukeyi) have relatively complex valuations. If one wishes to gain exposure to the 'AI computing hardware consumables' theme,Dingtai High-tech is the only direct play in the Hong Kong market.
Reason 2: Clear 'volume and price upside' logic in the AI computing supply chain
AI server PCBs have increased from the typical 12–16 layers used in standard servers to 24–40 layers. With the adoption of harder M9 substrates, drill bit lifespan has plummeted from 3,000 holes to just 100–800 holes. Additionally, the segmented drilling process has raised drill consumption per hole from 1 bit to 3–5 bits. The combined effect of these three factors means that drill bit consumption per AI server is approximately 13.5 to 195 times that of a standard server. This is not mere narrative—it translates directly into quantifiable engineering parameters and actual orders.
Reason 3: Earnings certainty
Dingtai High-tech is projected to report RMB 432 million in net profit for 2025, with RMB 291 million in net operating cash flow, demonstrating solid earnings quality and reducing uncertainty around performance delivery.First-quarter gross margin approached 50%, moving firmly into the high-margin range above 50%.
Reason 4: Strong cornerstone investor lineup
Fifteen institutional investors—including Shenghong Technology (Hong Kong’s leading AI PCB manufacturer), HHLR (an affiliate of Hillhouse), Aspex, Kingboard Group, E Fund, and Taikang Life Insurance—subscribed for USD 254 million worth of shares, equivalent to 5.2365 million H-shares, or approximately 41.5% of the total offering.
Risk Warning
Risk 1: Concentrated business structure with limited cyclicality resilience
In 2025, revenue from precision cutting tools accounted for 83.5% of total revenue—nearly the entirety. Should capital expenditure on AI servers slow down or downstream PCB manufacturers accumulate excess inventory, the company’s revenue and profits would face immediate impact. Functional film materials already reported negative gross margins in 2025, and the company’s diversification strategy has yet to provide meaningful profit support.
Risk #2: The A/H share price gap is a double-edged sword
Dingtai High-Tech officially launched its Hong Kong IPO on June 30, 2026. As the only H-share leader globally in precision PCB manufacturing, Dingtai has specialized in the PCB tooling chain for over three decades and has become the world’s largest supplier by drill bit sales volume. Industry Positioning and Core Business To understand Dingtai High-Tech’s business, first grasp the PCB manufacturing process. Printed Circuit Boards (PCBs) serve as the foundational substrate for all electronic devices, densely populated with tens of thousands of micro-vias that enable interlayer electrical connections. Each hole drilled consumes one drill bit. Drill bits are standard consumables—discarded once worn out. A single AI server’s multilayer PCBs require 13.5 to 195 times more drill bits than those in a conventional server. Dingtai High-Tech operates at the very upstream end of the PCB industry chain—it does not manufacture PCBs themselves but instead produces the cutting tools, materials, and equipment needed for PCB fabrication. In other words, it plays the role of the 'shovel seller.' Four business segments underpin its overall operations Precision Cutting Tools (RMB 1.74 billion in revenue in 2025, accounting for 83.5%) This is the company’s absolute core segment, encompassing PCB drill bits, end mills, specialty cutting tools, and CNC tools. Drill bits contribute the majority of revenue within the precision cutting tools segment. Both volume and average selling price of drill bits are currently accelerating upward. Volume: 1.132 billion drill bits sold in 2025, up approximately 40% year-over-year, with monthly production capacity exceeding 130 million units (world’s largest) Price: Average selling price of drill bits stood at RMB 1.22 per unit in 2025, up year-over-year...
The H-share offering price of HK$380 represents a discount of approximately 40% compared to the A-share price, providing a certain margin of safety. Conversely, however, the A-share's forward P/E ratio has already exceeded 360x (as of June 29, 2026), far surpassing the industry average of 25x, indicating that the A-share itself is experiencing a valuation bubble. If the A-share undergoes a significant correction, the H-share could be dragged down along with it.
The above content is based on publicly available prospectuses and financial documents, with data current as of July 1, 2026. This does not constitute investment advice in any form. Investing involves risks; please exercise caution.
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Dingtai High-Tech officially launched its Hong Kong IPO on June 30, 2026. As the only H-share leader globally in precision PCB manufacturing, Dingtai has specialized in the PCB tooling chain for over three decades and has become the world’s largest supplier by drill bit sales volume. Industry Positioning and Core Business To understand Dingtai High-Tech’s business, first grasp the PCB manufacturing process. Printed Circuit Boards (PCBs) serve as the foundational substrate for all electronic devices, densely populated with tens of thousands of micro-vias that enable interlayer electrical connections. Each hole drilled consumes one drill bit. Drill bits are standard consumables—discarded once worn out. A single AI server’s multilayer PCBs require 13.5 to 195 times more drill bits than those in a conventional server. Dingtai High-Tech operates at the very upstream end of the PCB industry chain—it does not manufacture PCBs themselves but instead produces the cutting tools, materials, and equipment needed for PCB fabrication. In other words, it plays the role of the 'shovel seller.' Four business segments underpin its overall operations Precision Cutting Tools (RMB 1.74 billion in revenue in 2025, accounting for 83.5%) This is the company’s absolute core segment, encompassing PCB drill bits, end mills, specialty cutting tools, and CNC tools. Drill bits contribute the majority of revenue within the precision cutting tools segment. Both volume and average selling price of drill bits are currently accelerating upward. Volume: 1.132 billion drill bits sold in 2025, up approximately 40% year-over-year, with monthly production capacity exceeding 130 million units (world’s largest) Price: Average selling price of drill bits stood at RMB 1.22 per unit in 2025, up year-over-year...
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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