Electrification + intelligence, new opportunities for PCB development. PCB is widely used in the automotive field, and the demand for Automotive PCB will continue to increase. The increment of vehicle PCB mainly comes from electrification and intelligence. The increment of motorized PCB mainly comes from the replacement of traditional battery harness by electronic control system and FPC. The total PCB consumption of the electronic control system is between 5-8 square meters, which increases the value of single vehicle PCB by about 2000 yuan; FPC replaces the traditional harness in the power battery and increases the value of PCB by about 600 yuan. The demand for PCB brought by intellectualization is mainly due to the improvement of the penetration rate of ADAS and intelligent cockpit. It is estimated that the increment of PCB brought by intellectualization is about 400 yuan. Thanks to electrification + intelligence, we expect that the demand for Automotive PCB will reach 123.3 billion yuan in 2025 and 24% CAGR in 20202025.
Electric Intelligence brings a new pattern of Automotive PCB. (1) Industrial barriers have been raised. One of the barriers is technical barriers: there is a strong demand for high-frequency PCB, FPC and HDI boards in new energy vehicles. It is expected that in the future, with the continuous improvement of the penetration rate of new energy vehicles, the proportion of high-end PCB products in the whole Automotive PCB field will continue to increase, which puts forward higher requirements for the technical ability of Automotive PCB manufacturers. The second barrier is the customer barrier: the electronic control system and auxiliary driving system of new energy vehicles are more related to driving safety, have higher requirements for the stability and safety of vehicle PCB, and it is more difficult to pass the customer certification. The customer barrier is significantly higher than that in the traditional automobile field. (2) Competition pattern: big customers bring big orders and Chinese manufacturers benefit. With the early integration of PCB manufacturers and automotive electronic suppliers, it is necessary to improve the integration process. The PCB value of new energy vehicles is about 6 times that of traditional vehicles, and it is like the components with great PCB value of electronic control system, which means that binding large customers can obtain larger orders. Once the PCB orders of core components are obtained, it will bring huge value and easier to form scale effect. In 2019, Chinese mainland manufacturers accounted for less than 10% of the total market share of PCB, and the total output value of PCB has exceeded 50%. With the continuous improvement of Tesla's localization rate and the rise of local vehicle brands, the sales volume and market competitiveness of Shanxi Guoxin Energy Corporation Limited(600617) vehicles are increasing day by day, which is expected to further expand China's PCB market.
Track the prosperity of PCB industry: raw material price and supply and demand. We believe that we can track the prosperity of PCB industry through the price of raw materials and the prosperity of supply and demand. Generally speaking, when the price of raw materials increases, PCB manufacturers cannot transmit the pressure of price increase to the downstream in time, which will lead to the decline of gross profit margin. According to our observation, the gross profit margin of PCB manufacturers is significantly negatively correlated with copper price. We can judge the profit margin of PCB enterprises by observing the trend of copper price. The supply and demand situation can observe the on hand orders, capacity utilization and delivery date of PCB manufacturers. We believe that as long as we grasp the price and supply and demand of raw materials, we can track the prosperity of PCB enterprises and better grasp investment opportunities.
Investment suggestion: as the demand for Automotive PCB increases sharply with the trend of automotive electric intelligence, the market space will be broad in the future, and PCB enterprises with high "vehicle content" will benefit the most. At present, the growth of Automotive PCB mainly comes from new energy vehicle customers, while traditional automobile manufacturers will face the transformation to new energy vehicles. The PCB manufacturers of existing traditional automobile customers have great growth potential. It is suggested to pay attention to PCB manufacturers with good layout of automobile business and entering the supply chain of key customers in the main automobile field: Olympic Circuit Technology Co.Ltd(603920) , Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) , Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Shenzhen Kinwong Electronic Co.Ltd(603228) , Victory Giant Technology (Huizhou)Co.Ltd(300476) , Sihui Fuji Electronics Technology Co.Ltd(300852) .
Risk warning: the penetration rate of electric vehicles is lower than the expected risk; The new capacity is less than expected; Industry competition intensifies; Market demand / scale measurement is less than expected risk, raw material price fluctuation risk, research report information lag risk.
