\u3000\u3000 Shennan Circuits Co.Ltd(002916) (002916)
The landing of non-public offering opened the way for the advanced packaging substrate and maintained the “buy” rating
The company issued a non-public offering and listing announcement. The number of shares issued was 23694000, all of which were restricted to tradable shares. The total amount of funds raised was 2.55 billion yuan, and the net amount of funds actually raised was 2.53 billion yuan. The new shares were listed on February 24, 2022 for the manufacturing project of IC carrier products for high-end flip chip in Wuxi Shennan and supplementary working capital. We slightly lowered the previous profit forecast. It is estimated that the company’s net profit attributable to the parent company from 2021 to 2023 will be RMB 1.44/18.1/2.24 billion (the previous value was RMB 1.49/20.1/2.41 billion), the corresponding EPS will be RMB 2.95/3.69/4.59, and the current share price will be 37.3/29.8/24.0 times that of PE. The server platform business will start to grow, the sealing substrate business will advance to the high end and maintain the “buy” rating.
The company invested in Wuxi Shennan project, which represents the top level of domestic packaging substrate and moves forward to higher-level products
The company has the production capacity of IC packaging carrier fc-csp products, and the future Guangzhou project plans to move forward to high-level FCBGA products. The non-public offering project is used to invest in the production capacity of Wuxi Shennan high-level flip chip packaging substrate, which is conducive to the transition to high-level products in the future. The total investment amount of the project is 2.77 billion yuan, and the proposed raised fund is 2.55 billion yuan, including the purchase cost of production equipment of 1.4 billion yuan, the construction period is 2 years, the investment and production period is 2 years, and the internal rate of return on investment is 13.0%. At that time, the development of domestic funded packaging substrate is in the forefront of the world. China’s leading packaging and testing manufacturers urgently need the support of upstream Chinese packaging substrate manufacturers. The company shoulders the important task of domestic substitution. As a leading manufacturer of domestic funded packaging substrate, there is still a gap between it and the leading manufacturer in the industry in terms of capacity scale, manufacturing cost and technical capacity, The raised funds can help the company further improve production capacity, serve downstream customers and accelerate the industrialization of high-end technology.
The first tier of PCB hard boards of domestic manufacturers is expected to benefit from server iteration and automotive intelligence dividends
The company is in the first tier of domestic PCB hard board, getting rid of the cost competition brought by the homogenization of medium and low-end products and moving towards the blue ocean market brought by technological iteration. Considering the upgrade of server platform and the difficulty and average price increase caused by the change of production design scheme, the company is one of the few manufacturers with mass production capacity in China and is expected to improve its profitability. Nantong phase III factory is positioned for specialized automobile application. With the increment of high-frequency PCB and HDI part number brought by automobile intelligence, the company has rich production process accumulation and is expected to benefit.
Risk tip: the cost of raw material copper clad laminate is rising, the introduction of new customers in the core network is less than expected, the introduction of packaging substrate business is less than expected, and the competition of automobile board is intensified.
