\u3000\u3000 Shennan Circuits Co.Ltd(002916) (002916)
Focus on PCB for nearly 40 years, create an original “3-in-one” strategy, and layout the full coverage of the industrial chain
Founded in 1984, the company has always been committed to the R & D, production and sales of medium and high-end PCB and its related products, with the goal of “building a world-class integrator of electronic circuit technology and solutions”. In order to realize the ambitious vision of the solution integrator, the company actively expands its business scope, covering PCB, packaging substrate and electronic assembly, forming a unique “3-inone” strategic layout. The company has the comprehensive manufacturing capacity of “sample → small and medium batch → large batch”, and provides customers with professional and efficient one-stop comprehensive solutions through the whole value chain services such as scheme design, manufacturing, electronic assembly, micro assembly and testing.
Set foot on the golden track, and the proportion of data center and automobile PCB continued to increase
① data center PCB: in terms of quantity, in the post epidemic era, data traffic continues to grow, and the capital expenditure of cloud computing giants at home and abroad has maintained a compound growth rate of 15% – 20% in recent five years, which has laid a solid foundation for the growth of PCB demand in upstream data centers; In terms of value, Intel expects to launch a new generation of CPU in Q1 2022, which will also implement pcie5 Application of 0 bus standard. We predict from PCIe 4 During the upgrade from 0 to 5.0, the PCB value of a single server will increase by more than 100%. As one of the newly entered and key expansion fields of the company in recent years, the data center has made a great contribution to the company’s revenue, and the overall market space needs to be further developed by the company.
② automobile PCB: under the background of the continuous improvement of the penetration rate of new energy vehicles and the continuous upgrading of ADAS, the ASP of automobile PCB continues to improve. According to prismark’s statistics and prediction, the Global Automotive PCB market will be US $6.132 billion in 2020, and will grow at a compound growth rate of 9% from 2020 to 2024. By 2024, the Global Automotive PCB market will reach US $8.736 billion. Focusing on new energy and ADAS, the company mainly produces high-frequency, HDI, rigid flex, thick copper and other products. In 2021, the company significantly accelerated the development of customers and completed the certification and import of several strategic key customers. At the same time, the construction of capacity end automotive electronics professional factory (Nantong phase III project) was carried out smoothly and was put into operation in the fourth quarter of 2021. Although the proportion of automobile PCB in the company is small, it is growing rapidly; At the same time, with the emergence of terminal applications such as the Internet of vehicles, cars may also become new mobile terminals, and the company’s technical advantages in the communication field can be further extended.
Layout the field of packaging substrate and bravely pick the “pearl on the crown of PCB”
According to prismark statistics, at present, the domestic IC carrier market accounts for only 4%, and the compound growth rate of global packaging substrate output value from 2020 to 2024 is 9.7%. As the packaging substrate has strong barriers in technology, capital, customers and other aspects, it is difficult to enter the market. The industry is controlled by large international manufacturers and is known as the “pearl on the crown of PCB”. At present, Xinxing electronics, ibiden and Samsung Electromechanical, the world’s top three suppliers, account for about 36% of the total market, while the domestic IC carrier industry started late. Now the rising demand and supply shortage are providing it with a good opportunity to rise. Ceng Zizhang, chairman of Xinxing, said at the international circuit exhibition in Taiwan, China, that the BT Board reached the supply balance in 2024, and that the supply of high-end ABF boards was tight until 2026. At present, the packaging substrate has the dual logic of domestic substitution + long-term tight global supply, which is an extremely high-quality track in the PCB field. The company started the packaging substrate business in 2009. The company now has the batch production capacity of module, fc-csp and storage substrates, and has a relatively advanced fine circuit product technology capability and quality capability platform. In addition, the company also has a relatively rich talent reserve and a relatively solid customer base in the industry.
Investment advice
We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.447 billion, 1.863 billion and 2.228 billion, with corresponding P / E ratios of 37.82, 29.37 and 24.56 times, maintaining the “buy” rating.
Risk tips
The price of upstream raw materials is higher and the downstream demand is lower than expected.
