\u3000\u3000 Victory Giant Technology (Huizhou)Co.Ltd(300476) (300476)
Domestic PCB leader with rapid growth. It was established in 2006 and is mainly used for HDI {476} products, including double-sided boards. The company ranks 25th in the global top 100 PCB list (prismark), and 4th in the domestic capital list of Chinese PCB enterprises. The company’s performance continued to grow steadily and rapidly, with a revenue CAGR of 32.5% from 2016 to 2020. In the first half of the year, the growth momentum of the company continued and the performance was beautiful. The company achieved a revenue of 3.384 billion yuan, yoy + 45.39%, and a net profit attributable to the parent company of 392 million yuan, yoy + 50.04%.
Endogenous growth: product structure optimization + capacity expansion of high-end products + Intelligent factory 4.0222 billion output value can be expected. With the gradual release of the company’s new HDI capacity, the proportion of the company’s HDI revenue has gradually increased, and the product structure has been continuously upgraded. In 2020, the company has a production capacity of 7.4 million square meters / year for double-sided board and multilayer board and 480000 square meters / year for HDI board (calculated according to the second-order). HDI phase II has entered the trial production stage. After reaching the production capacity, the overall production capacity of the company is expected to reach 8.6 million square meters / year. In 2021, the company will increase 2 billion yuan, of which 1.5 billion yuan will be used to expand the production of 1.45 million square meters / year of high-level multi-layer board, 400000 square meters / year of high-level HDI and 140000 square meters / year of IC packaging substrate, so as to further expand the high-end production capacity. The company took the lead in making breakthroughs, creating an industry-leading industrial Internet smart factory, greatly improving the production capacity and quality, and continuously improving the per capita output value. Benefiting from the optimization of product structure + expansion of high-end production capacity + smart factory 4.0, the company’s performance will continue its high growth momentum, with a 22-year output value of 10 billion and sufficient long-term growth momentum.
Industry advantages: graphics card + automobile. 1) The core flagship product high-density multi-layer VGA (graphics card) PCB benefits from the strong demand for dgpu + product upgrading + industry leading position. The company’s core flagship product, high-density multi-layer VGA (graphics card) PCB, has been successfully introduced into industry leading customers (AMD, etc.), with the largest market share in the world. It is expected to benefit from the strong demand of downstream dgpu and the increase of value driven by product upgrading. 2) The Automotive PCB business benefits from the rapid growth of the industry + the gradual improvement of the product line + high-quality customer resources. The company’s Automotive PCB product line is gradually improved, with the supply capacity of low-voltage products, high-voltage products and HDI boards. The company’s products have been successfully imported into Tesla, Byd Company Limited(002594) , Geely, new forces of car making and other high-quality major customers at home and abroad.
Product Prosperity: HDI + IC carrier. 1) HDI boom is up, the company will benefit from the industry boom + advance layout with technical and process advantages + HDI phase I and phase II production. In the medium and long term, the company continues to promote the product layout of anylayerhdi and SLP, and is expected to continue to optimize the product structure and raise the performance ceiling. 2) The demand for IC carrier board is strong + the trend of domestic substitution is strengthened. The company actively develops and expands production to enjoy the high-speed growth dividend of the industry. The company’s 21-year fixed increase project plans to expand production by 140000 square meters, drive the upgrading of the company’s product structure and contribute to the increment of performance.
Investment suggestion: it is estimated that the company’s revenue in the year of 21 / 22 / 23 will be 73.56/96.30/12.313 billion yuan, yoy + 31.36% / 30.92% / 27.86%, net profit will be 840 / 11.46/1.466 billion yuan, yoy + 61.89% / 36.39% / 27.94%, 30xpe will be given to the company for 22 years, the corresponding target price will be 40 yuan / share, and “buy” rating will be given for the first coverage.
Risk tips: the downstream demand is less than expected, the HDI capacity climbing is less than expected, the production expansion of high-rise multi-layer board / HDI / IC carrier board of the 21-year fixed increase project is less than expected, and the market competition is intensified
