\u3000\u3 China Vanke Co.Ltd(000002) 916 Shennan Circuits Co.Ltd(002916) )
Leading domestic PCB enterprises to create a “3-in-one” business layout. The company has three businesses: printed circuit board, packaging substrate and electronic assembly, forming a unique “3-in-one” business layout in the industry. While continuously strengthening the leading position of printed circuit board business, the company vigorously develops its “technology rooted” packaging substrate business and “customer homologous” electronic assembly business. After years of development, the company has become a leading enterprise in China’s printed circuit board industry, a pioneer in China’s packaging substrate field and an advanced enterprise in electronic assembly manufacturing.
The first quarter results of the company were brilliant, and the net profit attributable to the parent increased by 43% year-on-year. In the first quarter, the company achieved a revenue of 3.316 billion yuan, a year-on-year increase of 21.68%, and a net profit attributable to the parent company of 348 million yuan, a year-on-year increase of 42.85%. The gross profit margin of the company in 2022q1 returned to the historical high level of 26.79%. It increased by 3.35pct year-on-year, 4.26pct month on month, and 3.08pct higher than the average gross profit margin in 2021. The performance in the first quarter was bright and achieved a good start in 2022.
PCB business: take communication as the core and actively explore the automotive field. The downstream application of the product takes communication equipment as the core, focuses on high growth fields such as data center and automotive electronics, and has been deeply cultivated in industrial control, medical and other fields for a long time. After 40 years of accumulation, the company has leading technical strength in the processing technology of high and middle end PCBs such as backplane, high-speed multilayer board and multi-functional metal sector, and firmly establishes the leading position in the industry. The company actively develops customers in the field of automotive electronics with high growth. The orders increased by 150% year-on-year in 2021. The construction of the company’s professional automotive electronics factory (Nantong phase III project) has been promoted smoothly. It has been put into operation in the fourth quarter of 2021. More production capacity will be released in the future. The automotive field has high growth in the future.
Packaging substrate business: with obvious advantages, continuous investment opens up the growth space of the company. The company’s packaging substrate business has established an operation system suitable for the field of integrated circuits, covering major customer groups including device manufacturers, semiconductor designers and semiconductor packaging and testing companies. It has established long-term and stable cooperative relations with many global leading manufacturers and has a leading competitive advantage in some market segments. In addition, the company will further invest in new packaging substrate factories in Guangzhou and Wuxi, of which Guangzhou will invest 6 billion yuan to mainly produce fc-bga, RF, fc-csp and other packaging substrates; Wuxi invested 2 billion yuan to mainly produce packaging substrates such as high-end storage and fc-csp. It is planned to be put into operation in the fourth quarter of 2022. The field of packaging substrates continues to release production capacity and open up the growth space of the company.
Investment suggestion: it is estimated that the operating revenue of the company from 2022 to 2024 will be 17.4 billion yuan, 20.8 billion yuan and 24.7 billion yuan respectively, and the net profit attributable to the parent company will be 1.9 billion yuan, 2.5 billion yuan and 3 billion yuan respectively. Referring to the average valuation of comparable companies in 2022, 16.29 times. Considering the flexibility of the company’s performance and the high difficulty of the company’s packaging substrate business, at present, only a few manufacturers in China have corresponding technical capabilities. At the same time, The Shenzhen Fastprint Circuit Tech Co.Ltd(002436) valuation of Listed Companies in the same industry that do packaging substrates is 22.10 times, which is significantly higher than that of other companies in the industry. The business scale of Shennan Circuits Co.Ltd(002916) packaging substrates is larger, and the company is rated as “buy” for the first time.
1. Prompt that the downstream demand is less than expected; 2. The new capacity is less than expected; 3. Industry competition intensifies; 4. Price fluctuation of raw materials; 5. The use information of the research report is not updated in time
