Shennan Circuit (002916) 2019 Interim Report Comments： 5G Revenue Proportion Increases and Continuously Benefits 5G Construction
Shennan Circuit (002916) 2019 Interim Report Comments: 5G Revenue Proportion Increases and Continuously Benefits 5G Construction
On August 10, 2019, the company released its semi-annual report for 2019.
From January to June 201武汉夜网论坛9, the company realized operating income of 47.
USD 9.2 billion, an annual increase of 47.
90%; net profit attributable to mothers4.
710,000 yuan, an annual increase of 68.
02%; net profit deducted from non-return to mother 4.
39 yuan, an annual increase of 68.
Investment highlights: Q2 performance is growing faster than Q1: The company achieved operating income of 47 in the first half of 2019.
9.2 billion yuan, net profit attributable to mother4.
7.1 billion, an annual increase of 47.
02%, of which the growth rate of Q2 is 49.
09%, both higher than Q1 growth.
The gross profit margin for the first half of the year was 23.
8%, basically unchanged from the same period last year.
It can be seen that the transmission volume is released, and the company’s performance has grown rapidly.
From the perspective of revenue composition, the company’s three major businesses, printed circuit boards, package substrates, and electronic assembly, accounted for 73 of the revenue, respectively.
The volume and price of communication PCBs are driven by 5G business, and the proportion of 5G products is gradually increasing. When 5G is converted to business, the communication PCB will usher in the opportunity of both price and volume.
About 60% of the company’s revenue comes from communications. Since the first quarter, 5G products have gradually expanded into small batches. Some products have been expanded in batches, and the proportion of revenue from 5G has gradually increased.
In the first half of the year, the company’s printed circuit business achieved revenue of 35.
2.8 billion, an annual increase of 53.
44% is a business with accelerated growth.
The company ‘s Nantong Phase I project ‘s production capacity climb has basically ended, and the production capacity is already at a relatively high level.
The second-phase project of Nantong has also been budgeted for construction. The construction period is expected to be 1-2 years, and the annual average profit will be realized after reaching the production capacity2.
US $ 9.9 billion will provide capacity guarantees for the company to share 5G construction dividends.
Packaging substrates are waiting for the capacity release of Wuxi factory, which is conducive to the localization of chips: the company’s packaging substrates achieved revenue in the first half of the year5.
10,000 yuan, an annual increase of 29.
The company’s fund-raising project, Wuxi Packaging and Substrate Factory, went online for trial production in June. It is in the ramp-up stage of production capacity and is mainly oriented to the storage market.
In addition, the company’s electronic assembly business achieved revenue5.
7 billion, an annual increase of 42.
Profit forecast and investment advice: The company’s EPS for 2019-2020 is expected to be 3 respectively.55 yuan, 4.
88 yuan, corresponding to the closing price of 115 on August 9, 2019.
The 50 yuan PE is 32.
54 times, 23.
67 times, maintain “Buy” rating.
Risk factors: The company’s capacity release is less than expected, 5G business is less than expected, and semiconductor localization is less than expected.