Shengyi Technology (600183) Company Express: High-speed CCL Accelerates Growth 5G Drive + Broad Domestic Alternative
Investment Highlights Event: Shengyi Technology H119 achieved total operating revenue of 59.
700 million, an annual increase of 2.
85%, net profit attributable to mother 6.
29 ppm, an increase of 18 years.
02%, net profit after deduction 5
92 ppm, an increase of 22 in ten years.
Among them, the total operating income for the second quarter of 2019 was 32.佛山桑拿网
37 ppm, a ten-year increase of 8.
68%, an increase of 18.
37%; net profit deducted from non-attributed mother 3.
68 ppm, a 58-year increase of 58.
76%, an increase of 39 from the previous month.
The growth rate of net profit is faster than the growth rate of revenue, and the increase in high-value products drives profitability.
The company’s net profit growth in the first half of the year was much faster than revenue growth. Q2 net profit replaced 12.
7%, an increase of 2 per year.
The five single units increased by 3 units month-on-month, mainly due to the volume of high-value products of intermediate-level copper-clad laminates. The net profit of Shengyi Electronics’ PCB business increased rapidly, and rapid downstream customer orders were transferred to internal manufacturers, driving the company’s 武汉夜网论坛 profitability.
We have noticed that the company is still increasing R & D investment and R & D expenses2.
7.7 billion, a significant increase of 108 previously.
At the same time, cash flow has improved and cash flow from operating activities10.
8 billion, a previous major increase of 152%.
CCL products: The structural adjustment of the supply and marketing of high-frequency products has driven the increase in gross profit margin, and the domestic alternative industry has greatly benefited from 5G construction.
CCL business achieved operating income of 46.
4 ‰, a decline of 2 per year.
32%, gross margin improved significantly4.
In terms of volume, the construction of the Nantong High Frequency Plant in 19 years has been completed, and high-value inverter products have gradually been ramped up. The initial capacity of the Nantong Plant in the first phase is 1.5 million square meters, and it can be further expanded due to the availability of spare plants.
On the demand side, downstream 5G PCB demand was strong, and the Huawei incident became an inflection point for domestic alternative acceleration. Downstream customers shifted their conversion product orders inside. The company took the lead in breaking through the overseas monopoly of transformation materials, and passed certification and supply by core customers such as Huawei.
The expected boom in supply and marketing of high-level CCL continues at the same time, and the company is expected to benefit in depth.
The PCB business continued to grow at a high-gross gross margin, and Shengyi Electronics’ new production base expanded: PCB business realized operating income.
60,000 yuan, an increase of 28 in ten years.
17%, continued high growth, gross profit margin 32.
73%, a significant increase of 9 per year.
Quantitatively, PCB production main body Shengyi Electronics produces and sells PCB489.
50,000 feet and 463.
60,000 feet, respectively reduced by 11.8% and 15.
The increase in sales revenue and the increase in gross profit margin are mainly due to the high prosperity of downstream PCBs. The company’s customers include Huawei, ZTE, Nokia, etc. The PCB supply chain is relatively closed, replacing other devices with strong stickiness, a long certification cycle, and the first bindingThe competitive advantages of major customers’ PCB companies are obvious.
The company recently announced the new expansion of Ji’an production capacity in Jiangxi, with a planned total investment of 2.5 billion U.S. dollars, with an annual output of 700,000 square meters of 5G, automotive electronics mid-to-high-end PCB, and an annual investment of 10.
850,000 yuan, net profit1.
With an annual output of 1.1 billion square meters of HDI boards, the annual output value of the project is expected to be 3 billion after the project is put into operation, which will significantly increase the company’s production scale.
Investment advice: We predict that the company’s EPS for 2019-2021 will be 0.
92 yuan, the corresponding PE is 35.
0x, the first coverage gives the company an overweight -A rating.
Risk reminder: conventional CCL has a high price cut, domestic replacement of high-speed CCL is less than expected, and 5G construction is less than expected