Key investment points
Events: in December 21, 2021, the Taiwan Daily Economic Daily reported: Ceng Zizhang, chairman of Xinxing, said at the international circuit exhibition of China’s Taiwan circuit board that it was expected to be as prosperous as semiconductors in the next 2-3 years, with the BT board reaching balance of supply in 2024, and the supply of high-end ABF boards to tight 2026.
In the past three years, the capacity of the board will continue to tighten. The gap between BT and ABF boards will still exist. The IC carrier board has a higher threshold for production technology than the traditional PCB boards, and the certification is difficult and the cycle is long. In the short term, it is difficult for enterprises to achieve mass production. Therefore, both the BT carrier and ABF carrier board are mainly Japanese, Korean and China Taiwan enterprises. Moreover, from the past China’s game player’s expansion rhythm, the center of gravity basically surrounds the ABF high loading board, such as the board leader, Xinxing electronics, to increase its capital expenditure in 2022 to 35 billion 838 million NT dollars to support ABF’s capacity expansion in Taiwan, China, and to meet the strong demand of the market. However, the expansion rate still can not meet the demand growth of the industry. Therefore, from the current supply and demand pattern of the industry, due to the high difficulty of IC carrier technology and process, it still takes time to release production capacity, so the prosperity of the industry will continue to rise.
Domestic enterprises have laid out board carrying business one after another, with significant leading advantages: at present, from the perspective of mainland enterprises, The leading IC carriers are mainly Shenzhen Fastprint Circuit Tech Co.Ltd(002436) (mainly storage carriers), Shennan Circuits Co.Ltd(002916) (mainly MEMS / fingerprint), and Zhuhai Yueya (mainly RF). Among them, Shenzhen Fastprint Circuit Tech Co.Ltd(002436) H1 carrier’s revenue in 2021 was 295 million yuan, yoy + 111.06%, of which 2W m2 / month’s capacity has been in full production (except for the impact of the Spring Festival in February), and the overall yield has increased to 96% +; secondly, Shennan Circuits Co.Ltd(002916) In 2021, the revenue of H1 carrier plate was 1.095 billion yuan, yoy + 45.79%, and the capacity utilization rate was at a high level; In addition, Suntak Technology Co.Ltd(002815) also realized the layout of IC carrier business through M & A of pronovi. In the first half of 2020, pronovi’s operating revenue yoy + 81.14% and net profit + 273.63% year-on-year; From the perspective of capacity layout, Shenzhen Fastprint Circuit Tech Co.Ltd(002436) began to layout IC carrier business in 2012 and put into trial production in Shennan Circuits Co.Ltd(002916) 2011. It has profound accumulation in technology, process and customers, and has significant leading advantages.
The prosperity of the industry continues to rise, Leading domestic enterprises take the lead in benefiting: we believe that there are capital barriers (large capital demand for plant and equipment investment and construction), technical barriers (more difficult process) and customer barriers for IC carrier enterprises (the customer certification cycle is long), so it still takes time to release the capacity of new players. However, with the improvement of industry demand, the gap between industry supply and demand still exists. For XINGSEN, Shennan, Chongda and other enterprises with priority layout in the field of IC carrier board, we are optimistic that domestic leading enterprises will continue to improve in the industry and superimpose domestic substitution Under the bonus, the future performance will achieve steady progress.
Recommended and recommended targets: recommended (covered): Shenzhen Fastprint Circuit Tech Co.Ltd(002436) ; recommended concerns (not covered): Shennan Circuits Co.Ltd(002916) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Suntak Technology Co.Ltd(002815) , Victory Giant Technology (Huizhou)Co.Ltd(300476) , Shenzhen Kinwong Electronic Co.Ltd(603228) , Nanya New Material Technology Co.Ltd(688519) , Guangzhou Fangbang Electronics Co.Ltd(688020) .
Risk warning: the release of IC carrier capacity is less than the expected risk; Risk of rising raw material prices; The supply of ABF carrier plate is less than expected risk.
