Shengyi Technology (600183): The profit elasticity of copper clad laminates is confirmed to enter the dual engine drive period

Shengyi Technology (600183): The profit elasticity of copper clad laminates is confirmed to enter the dual engine drive period

We believe that the third quarterly report realized the logic of reversing the heavy volume of copper plates, and communication-driven growth brought about the logic of improving profitability, and the actual profit was better than disclosure. We are optimistic about the future space, and raised our profit forecast and target price to 30 yuan.

The third-quarter performance trend is upward, verifying the previous judgment.

The company’s revenue in the first three quarters was 94.

700 million, an annual increase of 5.

53%, operating profit of 13 billion, a 31-year growth of 31.

67%, net profit attributable to parent company 10.

4 billion, an annual increase of 28.

66%, a relative increase in the medium-term growth rate, the corresponding EPS is 0.

48 yuan.

Among them, Q3 single-quarter revenue of 35 billion yuan, ten years.

44% MoM.

01% growth, operating profit 5.

3 billion, 54 per year.

49% growth compared to 16%, attributed to net profit4.

13 billion, 49 per year.

12% MoM.

The 93% increase is in line with our previous company’s judgment that the net profit in the third quarter of the previous quarter was upwards and increased several times.

Upturn in prosperity and product upgrades have helped boost Q3’s profitability, with taxes and fees slightly dragging down profits.

Driven by the reduction of 5G communications demand in previous reports, the industry is booming. The company’s CCL business has upgraded its high-frequency and high-speed product structure and the price of thick plates rose in early September.Ring-up logic.

The company’s Q3 revenue increased by 8% month-on-month, and gross profit margin increased significantly by 8.

2% month-on-month increase of 1.

3% to 28.

4%, we judge that it is mainly benefited from the significantly improved profitability of CCL business and the continued Q2 growth trend of PCB business.

From the perspective of taxes and fees, the company’s Q3 single-quarter management expense ratio and R & D expense ratio increased month-on-month, mainly because Q3 increased by 21 million distribution incentive expenses and bonus distribution and R & D promotion. In addition, the Q3 single-quarter rate of return was relatively problem 2 10.

5% to 16%, more than 37 million points over the previous quarter, we think that the company will focus on the R & D costs plus replacement every six months, considering tax factors, that can explain the net interest rate increased only slightly.

1% and minority shareholders ‘equity only increased by 1 million from the previous month (from the minority shareholders’ equity, the profitability of Shengyi Electronics can be roughly estimated), Q3 actually attributed to the mother’s net profit is higher than the current 4.

1.3 billion is more than 50 million, Q4 and next year 杭州桑拿网 are expected to continue high growth.

The performance base of 18Q4-19Q1 decreased, and the company’s 19Q3 and subsequent companies are in the heavy-duty business of communication circuit boards. It is expected that single-quarter profit will maintain high growth.

In all aspects of business, the delivery of high-frequency copper clad laminate Q4 continues to climb upwards. At present, such products are still scarce in the pure domestic supply system. Compared with the test of the large-scale stable supply capacity of the manufacturer, Shengyi will continue to restrict the sale of this product.The high-speed copper clad laminates also benefit from the heavy demand for communication high-level boards and the development of the server switch market. The capacity and continuous improvement; the traditional copper clad laminate business prices have rebounded by about 1-3% at the end of Q3.Concentrated on Q4, considering that the price of 19H1 is in a downward adjustment period, and no further price increases are expected, the product price outlook for the next year will continue to increase under the shortage of communications compression capacity, and the potential for continued price increases is also expected to bring profit elasticity; PCB business benefitsElectronics is one of the companies with the fastest expansion of high-end production capacity in the next 1-2 years, and its share of core customers is improving, which is another engine for the company’s performance growth.

The short-term production capacity increased by a month-on-month growth rate, and the subsequent growth of approximately 700 million U.S. dollars in the Dongcheng Phase III, technical transformation projects and Jiangxi projects accelerated.

In the end, Q3’s multi-deduction income will return to Q4 due to R & D plus replacement, which will make a positive contribution to Q4’s earnings.

We continue to maintain high confidence in Q4 and next year’s performance.

In the long run, the company hopes to gradually develop into a supplier of high-end electronic circuit substrates.

In addition to high frequency, high-speed copper clad laminates are beyond the track. The global market for M4 and above in 2018 is about 1 billion US dollars and is growing rapidly. Equipment and terminal substrates are developing at a high speed. In the future, high-speed production capacity of the industry will be in tight supply.status.

Recent incidents such as the suspension of production at the Panasonic Koriyama Plant due to floods have also hinted at the possibility of loosening Taiwanese investment and foreign semi-monopoly markets.

In addition, the company’s mass production layout in high-end FCCL substrates, high-end automotive plate substrates, packaging substrates, and so on. In the long term, the company’s high-end business proportion will continue to increase, and it is optimistic that the company will gradually develop into a full-range mid-to-high-end electronic and electronic component supplier.
Raise profit forecast and target price, and maintain strong push.
We believe that the communication business has become a new core driving force for the company, and the company has entered a new round of development period with optimized product and customer structure and enhanced growth.
It is estimated that the revenue for 2019-2021 will be 131.26% 19.98 billion, and the net profit will be increased to 1.419.23 billion, which corresponds to 0 EPS.



03 yuan, corresponding to the current sustainable PE of 41.



7 times.

We believe that the performance of today and tomorrow has the flexibility to continue to revise, maintain “strongly recommended -A”, and raise the target price to 30 yuan.

Risk warning: industry demand is lower than expected, 5G progress exceeds expectations, and industry competition is intensifying.