Under the background of global economic recovery, the recovery of the electronic industry market, the outbreak of automotive electronics and other industries and the continuous emergence of new application scenarios have greatly boosted the demand for PCB. Benefiting from this, Shengyi Technology Co.Ltd(600183) ( Shengyi Technology Co.Ltd(600183) . SH), Nuode Investment Co.Ltd(600110) ( Nuode Investment Co.Ltd(600110) . SH), Guangdong Chaohua Technology Co.Ltd(002288) ( Guangdong Chaohua Technology Co.Ltd(002288) . SZ) and other listed companies in PCB industry chain reported good results in 2021. Some analysts pointed out that there are structural opportunities and strong demand for PCB sector. Looking forward to 2022, the industry will maintain growth.
upstream profit doubling
As the “mother of electronic products”, PCB (printed circuit board) continues to penetrate into the fields of industrial control, medical treatment, consumer electronics, automotive electronics and so on.
According to the prismark data quoted in Shennan Circuits Co.Ltd(002916) ( Shennan Circuits Co.Ltd(002916) . SZ) 2021 annual report, in the medium and long term, the industry will maintain a stable growth trend. From 2021 to 2026, the global PCB output value is expected to grow at a CAGR of 4.8%. In the Chinese mainland with a high base in 2021, the compound growth rate will still reach 4.6%, and the growth will remain steady.
Listed companies in the upper reaches of the PCB industry chain performed well last year. According to the annual reports, the upstream copper clad laminate supplier Shengyi Technology Co.Ltd(600183) achieved a net profit of 2.83 billion yuan, a year-on-year increase of 68.38%; Copper foil suppliers Nuode Investment Co.Ltd(600110) , Guangdong Jiayuan Technology Co.Ltd(688388) ( Guangdong Jiayuan Technology Co.Ltd(688388) . SH) realized net profits of 404 million yuan and 550 million yuan respectively, with a year-on-year increase of 740993% and 195.02% respectively Guangdong Chaohua Technology Co.Ltd(002288) ( Guangdong Chaohua Technology Co.Ltd(002288) . SZ) the net profit increased by 118130 million yuan in advance, with a year-on-year increase of 449.63% – 505.53%.
The key to supporting the performance growth of the above companies is the improvement of product sales and prices, and the effective transmission of costs to the downstream.
Since last year, the price of bulk commodities has fluctuated continuously, the price of copper has risen sharply, and the cost has increased accordingly. Copper clad laminates have welcomed the rising price tide. Copper clad laminate manufacturers including Shengyi Technology Co.Ltd(600183) have raised their product prices. At the same time, the market has shifted more production focus to lithium battery copper foil with higher gross profit, which has squeezed the output of copper clad laminates and copper foil to a certain extent, resulting in short supply and even shortage in the market of copper clad laminates The Shengyi Technology Co.Ltd(600183) sales of printed circuit boards increased. The production capacity released by the 8000 ton high-precision electronic copper foil project (phase II) has become one of the main reasons for the change of Guangdong Chaohua Technology Co.Ltd(002288) performance.
How to control costs when copper prices continue to rise Guangdong Jiayuan Technology Co.Ltd(688388) relevant person in charge said that we have dynamically adjusted the inventory of copper wire and adjusted it accordingly when the price rises or falls to control the inventory. The rise of copper price will have a certain impact on the company’s profits, but generally speaking, the impact is not very great. According to its disclosure, the company’s products are basically full production and full sales.
Due to the tight market supply of copper foil products, the processing fee also increased. According to the reporter, the pricing mode of copper foil products of many companies is “copper price + processing fee”. The increase of processing fee or copper price will lead to the corresponding increase of copper foil products, so as to improve the overall profitability of products Nuode Investment Co.Ltd(600110) insiders told the financial associated press that the rise in processing fees is the main factor in the profitability of the company’s copper foil products. The rise in raw materials can be partially transmitted to downstream customers, and we have also done hedging.
When the market is in a good situation, the industry will “get together” to increase capital and expand production Shengyi Technology Co.Ltd(600183) the latest announcement shows that Jiangxi Shengyi Technology Co.Ltd(600183) Co., Ltd., a wholly-owned subsidiary, will increase capital by 500 million yuan and start the construction of phase II project. The subsidiary will produce 131079 million square meters of all kinds of copper clad laminates and sell 130735 million square meters of all kinds of copper clad laminates in 2021 Guangdong Jiayuan Technology Co.Ltd(688388) is also promoting the 15000 ton high-performance copper foil project in Ningde City, Fujian Province, the 16000 ton high-performance copper foil technical transformation project in Guangdong Jiayuan Technology Co.Ltd(688388) Park, Meizhou, Guangdong Province, the 30000 ton high-precision ultra-thin electronic copper foil project in Liaocheng, Shandong Province, and the 20000 ton electrolytic copper foil project of Jiangxi Guangdong Jiayuan Technology Co.Ltd(688388) Co., Ltd. in Ganzhou, Jiangxi Province.
middle and lower reaches gross profit bearing
In contrast, the performance pressure of enterprises in the middle and lower reaches of the PCB industry chain is more obvious.
The annual report shows that the revenue of Shennan Circuits Co.Ltd(002916) 2021 was 13.943 billion yuan, a year-on-year increase of 20.19%; The net profit was 1.48 billion yuan, a year-on-year increase of 3.53%, with a slight increase. Wus Printed Circuit (Kunshan) Co.Ltd(002463) ( Wus Printed Circuit (Kunshan) Co.Ltd(002463) . SZ), whose core business is enterprise communication market board and automobile board, had a revenue of RMB 7.419 billion in 2021, a year-on-year decrease of 0.55%; The net profit was 1.064 billion yuan, a year-on-year decrease of 20.80%.
At the same time, the reporter noted that the gross profit margin of PCB of middle and downstream enterprises decreased compared with the data of the same period.
Annual report (data source of each company)
The performance has changed. Both Shennan Circuits Co.Ltd(002916) and Wus Printed Circuit (Kunshan) Co.Ltd(002463) companies said in their annual reports that the impact of the epidemic on the supply side still exists, the supply chain circulation of the industrial chain is not smooth, the price of raw materials has increased significantly and the supply of chips is tight, which has formed a certain cost pressure on enterprises Wus Printed Circuit (Kunshan) Co.Ltd(002463) at the same time, it is pointed out that the overall operation of the company is facing multiple pressures and challenges due to the influence of factors such as RMB appreciation, 5g construction slowdown, PCB market demand fluctuation and intensified competition.
As for the reasons for the decline of gross profit margin, Shennan Circuits Co.Ltd(002916) in response to the institutional research, pointed out the impact of “the slowdown of communication market demand in 2021”.
Insiders told the financial Associated Press, “with the rapid development of digitization in the context of the epidemic, telecommuting, data storage and 5g communication all need the output and reception of information. The output end is mainly the layout of communication base stations, but now the layout is basically the same. Therefore, the PCB enterprise dominated by the main communication board of communication base stations is equivalent to saying that its performance growth will fall into a stagnation.”
there are still structural opportunities
Relatively speaking, despite the pressure from the cost side, the performance of Sihui Fuji Electronics Technology Co.Ltd(300852) ( Sihui Fuji Electronics Technology Co.Ltd(300852) . SZ), whose products are mainly used in downstream fields such as industrial control and automotive electronics (accounting for about 80% of the total revenue), has increased, with a revenue of 1.05 billion yuan in 2021, a year-on-year increase of 61.44%; The net profit was 184 million yuan, a year-on-year increase of 52.94%.
Sihui Fuji Electronics Technology Co.Ltd(300852) relevant person in charge said that the application of the company’s products in the downstream market is mainly in industrial control (the revenue accounts for about 60%).
When it comes to some transmission and automation, industrial control products will be used, such as motors and joints in Siasun Robot&Automation Co.Ltd(300024) which are used in large quantities.
Faced with the lack of “core” in the industry, the aforementioned insiders said that from the production side, the new production line of chip manufacturers was put into operation and the production capacity began to be released gradually. From the application side, there is a phenomenon of insufficient operation in countries with serious epidemic abroad, the consumption of chips will be reduced, and some may flow into China. When the core shortage problem is not solved, enterprises will find ways to reduce the amount of chips in the design when pushing new products.
Some analysts in the industry also pointed out that the marginal change of PCB demand deserves attention, and automotive electronics and servers bring structural opportunities. Some respondents also said that the application side has just started, and the prospect is still very broad.
“Electric and intelligent vehicles are the trend. There are more and more ADAS (intelligent driving assistance system) configurations, including some intelligent assistance for car following driving, anti deviation and anti sideslip. The consumption of driving PCB increases rapidly. In addition, the three electric systems (battery, motor and electric control) of new energy vehicles also need PCB control. Compared with ordinary oil vehicles, its consumption of PCB may double.” The above-mentioned person told the financial associated press.
In addition, under the background of “digital computing in the East and digital computing in the west”, the increased demand for computing power and data interaction and the expansion of relevant application scenarios in AI, cloud computing, big data, 8K “Ultra HD” video and 5g industry applications will drive the expansion and upgrading of network equipment such as servers and switches, which will give birth to greater imagination space for the PCB industry (especially high-frequency and high-speed PCB products).
