\u3000\u3 China Vanke Co.Ltd(000002) 916 Shennan Circuits Co.Ltd(002916) )
Events
On March 15, the company released its annual report. In 2021, the company achieved a revenue of 13.943 billion yuan, a year-on-year increase of 20.19%, a net profit attributable to the parent company of 1.481 billion yuan, a year-on-year increase of 3.53%, and a deduction of non attributable net profit of 1.272 billion yuan, a year-on-year decrease of 1.73%.
Brief comment
1. The performance in 2021 was in line with expectations, and the IC carrier business increased significantly
Throughout the year: thanks to the expansion of production capacity and market diversification, the company’s revenue maintained a growth of 20.19% in 2021. From the perspective of structure, the IC carrier business increased significantly and the PCB business grew steadily. The downturn in communication orders, the rise in the price of raw materials and other factors led to the slowdown in the growth of net profit attributable to the parent company, with a year-on-year increase of 3.5%. In 2021, the gross profit margin and net profit margin were 23.71% and 10.62% respectively, with a year-on-year decrease of 2.76 PCTs and 1.72 PCTs respectively, mainly due to the reduction of communication orders, the increase of raw material costs and the increase of depreciation of some factories. On the expense side, the sales expense rate, management expense rate and financial expense rate are 1.67%, 3.90% and 0.77% respectively, which are basically stable and well controlled.
Single quarter: 21q4 achieved a revenue of 4.187 billion, a year-on-year increase of 59.94% and a month on month increase of 8.07%. The net profit attributable to the parent company was 454 million yuan, a year-on-year increase of 36.76% and a month on month decrease of 2.50%; The gross profit margin in a single quarter was 22.53%, down 3.16pcts year-on-year and 2.02pcts month on month. The revenue of 21q4 maintained growth, but the demand was divided (the demand for servers and cars was better, and the communication demand was sluggish), and the product structure was adjusted.
2. IC carrier: rapid growth of revenue and improvement of profitability
In 2021, there was a high boom in semiconductors and a strong demand for IC carriers. The business realized a revenue of 2.415 billion yuan, a year-on-year increase of 56.35%, accounting for 17.32% of the total revenue; The gross profit margin was 29.09%, with a year-on-year increase of 1.04pcts. In terms of product progress, the storage IC carrier has made breakthroughs in technical capacity, customer development and capacity release, with orders increasing by 140% year-on-year. Wuxi substrate factory has climbed smoothly and has entered the stage of mass production. The introduction of fc-cspic carrier board to customers is smooth and mass production is realized. In terms of product layout, the company has decided to invest in the construction of IC carrier factories in Guangzhou and Wuxi. Among them, the Guangzhou IC carrier project plans to invest 6 billion yuan for IC carriers such as fc-bga, RF and fc-csp. At present, the project is in the preliminary preparation stage; Wuxi high-end flip chip IC carrier product manufacturing project plans to invest 2.016 billion yuan, mainly for high-end storage, fc-csp and other IC carriers. It is expected that 22q4 can be connected and put into production.
3. PCB: the upgrading of the server has brought about an increase in orders, and the development of automotive electronic customers has achieved remarkable results
In 2021, the business realized a revenue of 8.737 billion yuan, a year-on-year increase of 5.13%, accounting for 62.66% of the total revenue; The gross profit margin was 25.28%, down 3.14 PCTs year-on-year. In terms of business: (1) communication: the demand of China’s communication market was low in 2021, and the company actively explored overseas markets, reducing the impact of China’s demand fluctuations; (2) Server: Intel server switches to whitely platform, and the next generation eaglestream platform is expected to start in 22q2. The upgrading of server platform has brought about the increase of PCB demand and the upgrading of technical specifications. In 2021, the relevant orders of the company increased by 45% year-on-year; (3) Automotive electronics: the automotive market has a high atmosphere and strong demand. In 2021, the company made significant progress in customer development, with orders increasing by 150% year-on-year. The construction of Nantong phase III is progressing smoothly and has been put into operation in 21q4.
4. Investment advice and profit forecast: the company is a leading supplier of PCB and IC carrier boards in China, with outstanding technical ability. In the medium and long term, it still has good growth and continues to be recommended. It is estimated that from 2022 to 2023, the company will realize the net profit attributable to the parent company of 1.83 billion yuan and 2.22 billion yuan, corresponding to 27 and 22 times of the current market value of PE.
5. Risk warning: the base station construction and server upgrade are not as expected; The ramp up of production capacity is less than expected; IC carrier prosperity change; The cost of raw materials has risen.
