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Shenghong Technology Overview
Shenghong Technology specializes in the research and development, production and sales of high-precision printed circuit boards. Its products are widely used in computers, aerospace, automotive electronics, communications, consumer electronics, industrial control, and medical instruments In other fields, it has established long-term and stable cooperative relationships with more than 160 top companies around the world.
PCB industry is simply a relatively traditional electronic component manufacturing industry, and production capacity is positively related to the company's revenue. However, because PCB is a customized product rather than a standardized product, every time a PCB company produces an order, the customer determines the design and demand. Why did
come to study this traditional business enterprise?
In the past year, Shanghai Electronics Co., Ltd. , Shennan Circuit, Shengyi Technology , a batch of PCB buckets have become bull stocks several times or even nearly ten times. Then this stable player can also pay attention to
through production intelligence. With the advancement of technology and automation, Shenghong Technology profit margin continues to increase. The smart factory multi-layer board project launched by
in 2016 aims to maximize the efficiency of production capacity by improving the automation and intelligence in the PCB production process, thereby adopting an operation model of a specialized factory. According to the company's various expense rates quarter by quarter in recent years, the administrative expense rate closely related to production has dropped from 13.1% in 16Q1 to 8.3% in 19Q3, highlighting the dividends brought by the company's smart factory automation efficiency.
Shenghong Technology's quarterly expense ratios in recent years
At present, Shenghong Technology graphics card field has the world's top customers such as Nvidia and AMD; and in the automotive field, Shenghong Technology has cut into Tesla led by New energy vehicle brand ; as for the current HDI production line built by Shenghong Technology , the company has cooperated with terminal manufacturers and ODM manufacturers; in addition, in the 6th phase factory of Shenghong Technology under construction, wins Macro Technology actively participates in the communication board certification of Huawei and ZTE.
Shenghong Technology benefited from the growth of cloud computing, server and other industries
Tongfu Microelectronics performed strongly in the chip packaging and testing sector. The main reason is that the company's new products performed well and the market share continued to increase, while Tongfu Microelectronics is one of the major packaging and testing manufacturers of AMD chips.
At present, the 7nm packaging and testing products of Tongfu Microelectronics and AMD have reached mass production capabilities and have grown significantly in the high-end market. Tongfu Microelectronics, TSMC and Silicon Precision are the three suppliers of AMD 7nm chips. Tongfu Microelectronics and Silicon Products are the packaging and testing partners of AMD 7nm desktop and mobile CPU, and GPU.
AMD industry chain-related companies, such as interface chip Xiangshuo Technology (5269.TW) and heat dissipation material Jiance Precision (3653.TW), have achieved record highs in performance and stock price.
According to the global GPU and server shipments in single quarters over the years, global GPU shipments have rebounded and recovered. With 5G, PCB is expected to achieve both price and volume increases; global server shipments have gradually recovered, and the value of a single server has increased rapidly.
At present, Shenghong Technology graphics card field has the world's top customers such as Nvidia and AMD.
Downstream distribution of Shenghong Technology products (2018)
Shenghong Technology bulk supplies PCB to Tesla
On April 2, 2020, Tesla announced the production and delivery data for the first quarter of this year: 102,700 vehicles were produced , delivered 88,400 vehicles, an increase of 40% from 63,000 vehicles in the same period last year, and higher than the level of 70,000 vehicles generally expected by analysts.
Tesla After the closure of the US factory, Tesla only the Shanghai Gigafactory is left in operation. The Shanghai Lingang Tesla Gigafactory project (Phase I) will have an annual output of 15 Ten thousand pure electric vehicles, the second phase is under construction.
Song Gang, manufacturing director of Tesla Shanghai factory, said that the current parts localization rate of the Shanghai factory is about 30%, and plans to increase it to 70%-80% by July 2020.
The value of automotive electronics in new energy vehicles accounts for about 25%, and the value of a bicycle PCB is about 2,000 yuan.
Shenghong Technology has supplied PCBs to Tesla in bulk. Automotive boards account for more than 10% of the company's revenue, and the company has supplied PCB products such as power supply and central control in batches to Tesla .
HDI High-end PCB production capacity is in short supply, Shenghong Technology HDI Phase I has reached production capacity
In the 5G era, HDI high-end PCB production capacity is in short supply, and the industry is booming.
According to analysts, the supply and demand gap will reach 20% of the original production capacity in 2020. Under this situation, on the one hand, suppliers will increase prices, and on the other hand, mobile phone terminal manufacturers will introduce new suppliers, domestic manufacturers with Anylayer technology There will be an opportunity to enter. The main
HDI manufacturers include Pengding Holdings, Dongshan Precision, Ultrasonic Electronics, Jingwang Electronics, Shenghong Technology , Shengyi Technology, Founder Technology, Zhongjing Electronics , etc.
In August 2019, the first phase of Shenghong Technology's HDI was successfully put into production and continues to expand production. By the end of 2019, it will achieve planning expectations. Company is also actively promoting SLP carrier board projects, and production capacity is expected to begin to be released in mid-2020.
Shenghong Technology’s production capacity planning and layout (100 million yuan)
HDI smart factory is divided into three phases. The annual output value of the first phase is 1 billion, the annual output value of the second phase is 1 billion, and the annual output value of the third phase is 2 billion. The first phase of plans to produce LED, smart home, mobile phone, and Netcom products, such as Amazon , Google smart home products. The yield rate of the first phase of HDI ranged from 50-60% at the end of August to exceeding 91% in November. In November, company began to cooperate with Wingtech to produce mobile phone HDI products.
Shenghong Technology core point of view:
1, Shenghong Technology is expanding the fastest among PCB manufacturers, with a compound annual growth rate of more than 35%. The company is expected to achieve an output value of over 10 billion in 2022. Shenghong Technology has the best management among PCB manufacturers, with a stable gross profit margin of 25% and a net profit margin of over 10%.
Through factory intelligence and automation, production efficiency has been further improved, costs have been reduced, scale has been expanded, and profit margins have room for further growth. The performance and stock price of
2 and AMD have continued to rise since 2016, driving the chip packaging and testing company Tongfu Microelectronics. Cloud computing capital expenditures have picked up since the fourth quarter of 2019, and server demand has increased. Shenghong Technology , as a server, graphics card and computer PCB manufacturer, has obviously benefited.
3, Tesla’s localization rate has increased from about 30% to 70%-80% by July 2020. The output of Tesla in the first quarter of 2020 exceeded expectations. Shenghong Technology has supplied PCB to Tesla in batches.
4. There is a gap in HDI production capacity in 2020. The yield rate of Shenghong Technology HDI Phase I increased from 50-60% at the end of August 2019 to exceeding 91% in November. HDI Phase II is expected to be put into production in 2020.
5, net profit in 2019 was 457 million, a year-on-year increase of 20%. The net profit in 2020 is expected to be around 650 million, an increase of 40%, and a PE of 22 times.
has analyzed so much fundamentals, let’s talk about the technical aspects.
first fell very deeply, mainly because of the large increase in the early stage, and it is normal for there to be many corrections. Coupled with the fact that technology stocks have been on a tear recently, the correction will naturally not look good. It has almost fallen now, but there is a lot of negative pressure during this process, which is a resistance to future rises. And it is not inclined to rise quickly, because it has entered the long-term moving average area and the strong stage has passed. If the fundamentals are good, I think it is a slow bull, not a fast bull.
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