Look at a picture first:
Figure1
Figure2
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Data source: Company announcement, Junlin Research Institute
The first picture is the monthly line chart of Taiwan Guoji , starting from the position pointed by the yellow arrow in April 2017, to July 2018, its stock price rose from NT$90 to NT$1,310 in 15 months, an increase of more than 1,300%. The stock price plummeted after
, and it was not until September this year that the stock price rebounded.
The second picture is Taiwan Guoji's single-month income. Its revenue and revenue growth rate basically correspond to the stock price. What is the reason why Guoju’s short-term revenue and stock price surged and plummeted?
answer is MLCC.
Taiwan Guoju is the world's largest passive component manufacturer, with its resistance production first in the world and MLCC production third in the world.
MLCC is the concept that A shares suddenly became popular again. What kind of monster is this thing? It can rise against the trend in A-shares and turn the stock price of Guoju to earth?
1
MLCC full name chip multi-layer ceramic capacitors (Multi-layer ceramic capacitors).
General electronic components is divided into active components and passive components.
active components are divided into discrete devices and integrated circuit . Passive devices are mainly capacitors, inductors, resistors, transformers, etc.
Among them, capacitors are the main passive devices, and the market size accounts for more than 60%.
capacitors have multiple packaging forms and types, among which the largest market segment is MLCC, which occupies half of the capacitor market. As the most common electronic component, the
capacitor is very simple to construct, and the same is true for MLCC.
MLCC is slowly replacing other types of capacitors due to its outstanding performance and small size, and the annual usage is absolutely astronomical.
market is expected to reach 4850 billion MLCC production and sales in 2020.
An Apple mobile phone MLCC uses more than 1,000 pieces, and a pure electric car uses more than 18,000 pieces. Usually, a large plate is embedded on a paper tape and loaded.
A few years ago, the price of regular MLCC was generally a few yuan/K, and a few cents per piece. It’s a few dozen yuan/K, and a few cents per piece.
China is the most important player in MLCC, that is, the country that is the most powerfully played by others.
Currently, 70% of MLCC is used in electronic products represented by mobile phones. China is the world's factory, which means that the vast majority of MLCCs in the world are in China.
However, we hardly can't make such a cheap thing. The pattern of
MLCC is a very small number of Japanese, Korean and Taiwan account for 90% of the market, and mainland Chinese manufacturers are classified as others, and all are mainly low-end.
2
What is the difficulty of this thing?
The steps for making MLCC are the same as making cakes.
First make the ceramic powder and binder and other things into dough, and crush it into a square dough with a machine. Put the grid on the dough, then brush with sauce, that is, the inner electrode, and then remove the grid.
Then, spread the dough pieces that have been coated with the inner electrodes in a misaligned manner, then cut the large dough into small pieces of cake, and then bake. After baking, dip the two ends of the cake in other sauces, that is, the outer electrodes, continue to bake, and finally sprinkle with five-spice powder and chili noodles, which is electroplating, and you can eat it.
, no, it can be used.
As we all know, making cakes is the easiest and most difficult job in the world.
The ingredients for making cakes are roughly the same, the steps are roughly the same, and the tools are roughly the same. Why do the cakes made by others burn on the outside and tender on the inside, delicious and delicious? How can people eat several times in one meal, but the cakes you make are full after eating a bite?
is it because of love?
is not.
has four key points: first raw materials, second formula, third skill, and fourth pot.
Rare ingredients are necessary, then there is a unique recipe, then master the heat, and good pots will make twice the result with half the effort.
makes good cakes, and all four are indispensable. The same is true for
to make good MLCC.
Ceramic powder quality, additives, steps, heat, and equipment are all very important.
ceramic powder, as the most important raw material for MLCC, is also a raw material with a cost ratio of more than one-third. Its purity, particle size and uniformity directly affect the final product quality. The main producer of this powder
is Japan.
Japanese are unique in the world in terms of raw materials, and they are a bit mentally ill. Most of the key industrial raw materials, including semiconductor raw materials, are the world's number one, which makes South Korea die.
In addition, there are mid-to-high-end equipment for MLCC, which is also monopolized by Japan and requires reservations in advance, so Taobao cannot buy it.
The entire MLCC industry chain, from equipment to ceramic powder to product manufacturers, Japan firmly controls the global market, especially in the mid-to-high-end fields.
Chinese manufacturers are all behind. The development trend of
MLCC is miniaturization, and we are the worst at making things smaller. This trend has further exacerbated the gap between China and the world.
MLCC is called "rice in the electronics industry". Japan has stopped supplying it, and most electronic manufacturers around the world will starve to death.
But don’t look at Japan’s advantages so great. In most of the time, Japan has not enjoyed the benefits brought by this advantage.
Historically, capacitors only had three times in short supply.
Once, it was in the late 1980s. As the semiconductor industry entered the era of super-large-scale integrated circuits, demand for personal computers soared, driving the demand for capacitors soared.
Once was the popularity of mobile phones around 2000 to drive the capacitor market.
Then in 2010, the boom in the smartphone market driven by the release of Apple 4 caused the market to be out of stock.
Except for the rare time periods above, MLCC is a balanced supply and demand or oversupply, and manufacturers are taking the path of small profits but quick turnover.
mid-to-high-end products have high profit margins, but since the demand in the past was not that large, it contributed limited revenue.
The market is very important, but it is not profitable and the threshold is not low, so the pattern has always been stable.
New changes arrived in 2016. This stems from the rise of electric vehicles in China.
A fuel vehicle uses only more than 3,000 MLCCs, while plug-in hybrid vehicles generally use more than 10,000 bicycles, and pure electric vehicles can reach 18,000 bicycles.
Moreover, automotive-grade MLCC is a high-end product, and the rapid development of China's electric vehicle industry has found an opportunity for high-end MLCC.
In addition, as the thinning and thinning of electronic products continues, small size and large capacity have become an inevitable development trend of capacitors.
Since early 2016, many Japanese MLCC manufacturers have begun to abandon the mid- and low-end market with large sizes, focusing on automotive specifications and small sizes of high-end products.
At the end of 2016, Murata, the top MLCC leader, also decided to significantly reduce the production of mid- and low-end MLCC, and the consumer electronics field only retains the production line for Apple.
This directly shocked the global MLCC market, and of course it mainly shocked China's electronic product manufacturing market.
It’s a coincidence that the world’s second largest MLCC supplier Samsung also decided to strengthen quality control and lengthen the MLCC supply cycle due to the Note7 explosion incident in the second half of 2016.
Taiwan National Master was therefore attracted by the attention of everyone.
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National giant boss Chen Taiming is overjoyed.
Guoju was founded by his brother in 1977. He himself established a company and later merged with Guoju and became the general manager.
Boss Chen is a good businessman, leading Guoju to grow from a small factory with dozens of people to the largest passive component manufacturer on the island. In 1994, it further expanded through mergers and acquisitions. In 1998, Guoju came to Suzhou to set up a factory and opened up the mainland market.
Boss Chen is determined to break the Japanese monopoly of the passive component market. Later, although the product level is still bad, the resistor has become the world's first in scale and MLCC has become the world's third.
Boss Chen is also among the top ten richest people in Taiwan Province.
However, before 2017, Boss Chen was mentioned almost always with his ex-girlfriend Guan Da Meiren. What everyone is concerned about is whether he married and divorced Guan Da Meiren.
Seeing that Japanese manufacturers have turned to high-end MLCC, Samsung temporarily withdraws the troops, Boss Chen understands that the opportunity has come.
While chatting and laughing, Boss Chen took over the production capacity of the Japanese equipment factory for one and a half years, which means that competitors have to wait for a year and a half if they want to expand.
Everything is ready, I just need to open my mouth. In April 2017, Guoju announced that the landlords had no surplus food, and MLCC started a craze for price increases.
The suppressed hearts of other manufacturers were finally released and followed the rise.
By the end of 2017, Murata, who had no intention of expanding, saw that he missed a wave of trouble, quickly increased production, and began to raise prices in early 2018.
soon Samsung also joined the price increase army.
The MLCC market out of stocks, price increases, order cuts, signing long contracts, stocking up, and stocking up in the 15 months from April 2017 to July 2018 have become the norm.
agents are in a carnival. They snatch goods from original manufacturers such as Guoju at high prices, and even cosmic processing plants such as Foxconn cannot snatch agents.
agents' goods will be quickly snatched away by Huaqiangbei's lower-level agents or dealers and stocked up. As the most vulnerable group in the entire link, small and medium-sized processing plants have used their entire lives to look for goods everywhere.
manufacturers that can get goods are like winter mice. They used to only stock up to 100,000 yuan, but now they are stocked 5 million yuan, but now they are stocked 5 million yuan, but now they are stocked 30 million yuan. Although stocking up goods brings huge financial pressure, it is much better than closing the goods without getting them.
As the biggest beneficiary, Guoju has brought his stock price and Boss Chen's value to the cloud with one price increase letter.
No one cares about the gossip between Boss Chen and Beauty Guan anymore. Everyone just wants to know if there is any goods left.
Regarding this, the new cosmic leader, Boss Chen, always said calmly: There is no solution to the out-of-stock until 2019.
Boss Chen is too pessimistic, and more people think that the stock outage will continue until 2020.
However, they all miscalculated.
The mobile phone market growth in 2018 was weak, and secondly, due to well-known reasons, China's manufacturing industry faces external pressure. In addition, the mining machine, which was once an important growth point of MLCC, disappeared with the plunge of Bitcoin.
At the same time, several newly built production lines from original factories have gradually entered the production stage.
The trend of lower demand and increased supply has arrived.
So in July 2018, the MLCC plunge became an unstoppable reality.
However, the above is not the fundamental reason for the decline in MLCC prices. In fact, the shortage has been over-amplified from the beginning.
The ones that rose the most during that stage were low-end products. This picture shows the ex-factory price trend of the low-end MLCC in China, with an increase of less than 40% in a year.
But in the terminal market, many material numbers have increased by more than 50 times!
If it is really a rare product, Boss Chen is not a good person, and the ex-factory price has increased by less than 40%?
The real situation is that since the second quarter of 2018, dealers' willingness to get goods has gradually decreased because it is difficult to take action.
Most of the goods are in the warehouses of agents and distributors. When the dealer warehouses in Huaqiangbei are full, they rent an office to store inventory.
These goods are transferred back and forth in Zhang San and Li Si's warehouse, and some have even turned physical spot transactions into futures contracts.
Finally, a letter of investigation by the government department pierced the hole.
On July 26, 2018, the Economic Promotion Bureau of Longgang District, Shenzhen issued a "Query on the Impact of Electronic Components Market Volatility on the Industry" and began to investigate the phenomenon of MLCC stockpiling.
agents and Huaqiangbei have heard of the news and sold out, and the price of MLCC has been leaking wildly. The dealers at the bottom of
sold at a loss, and electronic manufacturers that have already stored a large amount of materials are eager to cut off the inventory that is depreciating every day.
The so-called MLCC out of stock is largely a futures manipulation game.
4
Starting from July 2018, MLCC has changed from a brainless stockpiling stage to a gritting teeth and destocking stage.
After a whole year of pain, MLCC original sales finally stabilized in the middle of this year, which shows that the worst time has passed.
So another Taiwanese manufacturer, Huaxinke, couldn't wait to suspend the order. As soon as the announcement of
was released, rumors of Huaqiangbei stockpiling again spread wildly. From
to late November, news of MLCC price increase began to rise sharply.
However, so far, there is no direct evidence that the price increase in the Maniac Country has increased significantly. I wonder if Boss Chen is holding back his ultimate move or he feels that the time has not come.
, Junlin, like many people, tends to be bullish on the future needs of MLCC. The
5G era is the future that has arrived, and will usher in an explosion next year. Now major operators and major mobile phone brands are ready to go, and 5G mobile phone will be launched in large quantities, and industries related to 5G mobile phones will usher in a new wave. The demand for MLCC of
and 4G mobile phones is much higher than that of 3G mobile phones, and the demand for MLCC of 5G mobile phones is also much higher than that of 4G mobile phones.
optimistically estimates that the demand for MLCC of 5G mobile phones will increase by 50%-200% compared with 4G mobile phones.
There are two key questions now: first, will the scene from 2017 to 2018 still appear? Second, how big are the opportunities for A-share MLCC-related companies?
From the perspective of the development laws of the MLCC industry itself, miniaturization is always the trend.
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Image source: Murata
The wave of shortages from 2017 to 2018 was a prerequisite that many domestic electronic manufacturers are still using large-sized products for cost considerations, and Japanese large manufacturers are no longer doing it, so there is a certain supply vacuum.
small size and mid-to-high-end products actually have not increased that much.
However, the cost-effectiveness advantages of large-size products have been weakened now, and after the baptism of the market, more and more electronic manufacturers have begun to choose smaller-sized products. The demand for small-size MLCCs by 5G mobile phones will far exceed the demand for large-size sizes.
So the future opportunities will be left to small-sized MLCC. Will these products be out of stock?
small size MLCC manufacturers are all Japanese and Korean manufacturers. Their purpose of reducing large sizes is also to increase small size production capacity. Their newly built production lines have basically been put into production in mid-2019.
Small-sized MLCC may be in short supply in the future, but the fierce market like the last time is no longer in line.
This has made our Chinese MLCC companies less interesting.
Strictly speaking, there are only two companies that make MLCC in A shares, Fenghua Hi-Tech and Sanhuan Group .
Among them, Fenghua Hi-Tech is the absolute leader in scale. In the last round, it also created a three-fold increase in a year. But what followed was that he was fined many times for violations and even found that he was inflated for profits.
As a company under Guangdong state-owned assets, it is also located in the most developed region of China's electronic manufacturing industry. Fenghua Hi-Tech can be said to be the right time, place, people and people, but it is regrettable that negative news has been repeatedly reported.
Fortunately, the punishment has been settled in late November and the negative news has been exhausted.
However, Fenghua Hi-Tech products are mainly low-end, so Junlin believes that Fenghua Hi-Tech will benefit from the huge increase in demand for MLCC, but it may be difficult to recreate the glory of the past.
Sanhuan Group is one of the only two manufacturers, but its output is limited and it is mainly large in size. Its conceptuality is not as good as Fenghua Hi-Tech . Although
still has huge domestic replacement space for large size, its internal logic is still very different from integrated circuits. Integrated circuits are under tremendous external pressure and have also risen to the national strategy.
Judging from the situation this year, integrated circuit companies are indeed overvalued, but the leaders have indeed seen very good performance growth, and their products are increasingly appearing in various products.
Large-size MLCC itself is a backward product, and Taiwanese companies already have very large production capacity. The mainland of the motherland is their largest market. If they hype it up, it will have no other effect except to accelerate the replacement of large-size MLCC by small-size MLCC.
So Junlin's point of view is very clear. Mid- and low-end and large-size MLCC will not have an unexpected growth, nor will there be crazy scenes of the past level.
This means that the low-end and large-size MLCCs of the two major A-share MLCC manufacturers are unlikely to achieve unexpected performance, while small-size and high-end MLCCs will not. There is another company in the field of
MLCC that needs to be paid attention to - Torch Electronics .
Torch Electronics' business is divided into agents and self-produced. Self-produced in revenue accounts for 30% and self-produced in profit accounts for 50%.
In the past, Torch Electronics has two highlights in the field of MLCC. First, it is one of the important agents of large-capacity products of Japanese manufacturers, Sun Yudian. Second, it belongs to one of the main suppliers of military MLCC in China. After all, the agency business of
is profitable, while the national scale of military MLCC is only about 2 billion yuan. Its self-produced MLCC is not competitive in the civilian field, so it is even less conceptual.
html In September, Torch Electronics issued an announcement to issue convertible bonds to raise 600 million yuan, mainly for the research and development and production of small-sized high-end MLCCs.However, this will be cashed in at least 2 years, so it is a bit early to hype this now.
In the MLCC field, what are really interesting are Chinese porcelain materials and Jiemei Technology .
Chinese porcelain material has a global market share of 11% in the field of ceramic powders for MLCC, ranking fourth.
Of course, the products of Chinese porcelain material are also used to manufacture mid- and low-end products. However, since this is the only one in China, almost all domestic MLCC manufacturers are looking for him. Moreover, since Japanese ceramic powder manufacturers are now making more high-end products, this gives Chinese porcelain material a larger market than in the past.
This is also why Chinese porcelain materials has replaced Fenghua Hi-Tech in stock market performance and has become the MLCC concept dragon-yi. This is still due to the downstream recession, which has caused its own sluggish performance.
However, it is necessary to pay special attention that the combined accounts receivable and goodwill of National Porcelain Materials account for 49.98% of the total assets! This number is quite terrifying, equivalent to 7.4 times its average net profit in the past three years.
Once a large amount of goodwill impairment is set aside, the company's profits are easily swallowed up.
Jiemei Technology's main products are electronic components and consumables, such as carrier tape and transfer tape, which are already the leader in the world. Several large MLCC manufacturers are their customers.
The wave of market from 2017 to 2018 is actually a deformed MLCC bull market caused by uneven capacity distribution, but Jiemei Technology has seen rapid performance growth. At the end of 2018 and the first half of 2019, the MLCC market was sluggish, which dragged down its performance. As the MLCC market stabilized, Jiemei Technology 's performance in Q3 2019 increased significantly month-on-month.
In addition, since the growth point of MLCC in the future is mainly miniaturized products, and miniaturized MLCC leaders such as Murata have also changed their packaging solutions, Jiemei Technology has a little more highlights.
new packaging solution is currently priced at 10%-50% per volume compared to old packaging solution. Considering that the new packaging solution can load more components per volume, it will not ultimately increase the cost of single components of MLCC manufacturers. The new product can reduce the raw material loss of Jiemei Technology , which is conducive to increasing gross profit.
In addition, pressing hole belts and plastic belts are also trends, and Jiemei Technology has already had a good technical reserve.
In the past, Jiemei Technology has its embarrassing aspects. When components are out of stock, downstream customers, like old men, have no motivation to update consumables, and when there is no shortage of stock, downstream customers, like grandson, have no motivation to update.
Only when the market is growing healthily can customers be more enthusiastic about updating and replacing them.
The situation in the third quarter was significantly better than in the second half of the year. It is expected that the fourth quarter will be able to go further, and 2020 may usher in a new spring.
At the financial level, Jiemei Technology is also relatively stable.
Overall, Jiemei Technology is still a small and beautiful company, and may be one of the best opportunities in this wave of price increases.
ending
believes that the recent MLCC hype is just the beginning because it does have the conditions for hype.
But compared to the last time, it is obvious that the internal logic is different. The main highlight of MLCC in the future is small and high-end products, while A-share manufacturers do not have the ability to supply large quantities. They will benefit from the general trend, but they will not be the one that benefits the most.
is like this, so you might as well settle for the second best. Digging out targets among raw materials and auxiliary material suppliers may be a more reliable choice.
