CHINA’S ambitions for next-generation wireless networks have propelled the country’s two leading printed circuit board (PCB) makers to new heights.

Jiangsu-based WUS Printed Circuit Kunshan Co. and Shenzhen-based Shennan Circuits Co. shot to record highs Friday, capping a stunning months-long run on anticipation of billions of dollars in spending by Chinese carriers on fifth-generation networks. PCBs are vital for a spectrum of electronics from smartphones to base stations to smart cars.

Shares of WUS have doubled in the third quarter alone, their strongest growth since its initial public offering in Shenzhen nine years ago. Rival Shennan surged 55 percent during the same period.

China’s 5G rollout, which will require a level of spending unseen in the rest of the world, should underpin the two PCB makers’ longer-term prospects. Both supply components to Huawei Technologies Co. and ZTE Corp., the nation’s networking leaders.

“Apart from 5G demand, China’s attempt to use home-made tech components will drive the businesses of WUS and Shennan,” said Zhu Jixiang, an analyst with CSC International Holdings. “The growth momentum of the PCB sector should continue.”

On the flip side, WUS and Shennan look pricey in the wake of their rallies. WUS is trading at about 39 times its blended two-year projected earnings, well above the 20 times average of its peers. And Shennan is at 42 times its one-year projected earnings, again outpacing the industry.

Analysts argue both are solidly profitable businesses with essentially new sources of future revenue. WUS’s net income surged 143 percent in the first half the year and is expected to grow on average 83 percent in 2019. Its counterpart Shennan is expected to increase profit by 43 percent this year.

(SD-Agencies)