Continue to recommend PCB segment: Short-term adjustment does not change industry trends
o-lead o-leading.com 2018-06-05 14:12:27
First, the industry to the mainland to determine the trend of transfer, domestic alternative space is huge
Mainland China currently occupies about 75-80% of the world's component assembly business, PCB(Printed circuit board company) production capacity only accounts for 50% of the world, that is to say, PCB will continue to transfer to the mainland. Among them, the domestically-funded enterprises' production capacity accounts for 18% of the world's total. The mainland's production capacity is mainly for Japanese and Taiwanese companies, and there is huge room for domestic substitution. Compared with overseas companies, domestic companies have significant cost efficiency advantages. Gross margins are significantly higher than those of overseas manufacturers. Accelerated production expansion has continued to capture market share in Japan and Taiwan.
II. The prosperity of Q2 continues. The property of Dachang is weak during the busy season, and the degree of concentration under the industrial upgrading trend continues to increase.
According to the historical revenue figures of major manufacturers, it is not obvious that the major manufacturers of PCBs are in the season of peak season, and they basically keep pace with capacity expansion and revenue growth. The sales side understands that the current frontline business personnel have more capacity and order requirements. Still in a booming state. The industry chain research has learned that the upstream CCL vendors are full of orders compared to the mainstream PCB(china High TG PCB supplier) manufacturers. We reasonably speculate that small plants that rely on specific fields or customer orders are still unable to get out of the season, superimposed with Jingwang, Shenghong and Chongda. Industrial 4.0 automation trends, we believe that the degree of industrial concentration is expected to further improve.
1. Emphasis is again placed on paying attention to the innovation and upgrading of the traditional PCB industry in the smart workshop in 2018 and the extension and integration of overseas high-quality technology customer companies. According to the representative manufacturer's data, 1 delivery period is significantly shortened (eg, 6-board 3 week→1 week); 2 per capita output value is increased (600,000/Y→2 million/Y); 3 Input-output ratio is upward (1:2→ 1:3);4 The yield process has gradually improved (95%→99%).
(1) Automated production expansion and matching order requirements with controllable risks: Modular production expansion of single-layer/single-line production lines can be grasped with order requirements, and the risks are relatively controllable; (2) Industrial transfer is a quality scale for domestic high-quality PCB manufacturers After the transfer, instead of relying on the transfer of advantages such as management efficiency, order picking ability, and automation upgrade, rather than the full replacement of Japan-Taiwan by more than a thousand mainland Chinese manufacturers; (3) The acquisition of overseas PCB companies by domestic-funded manufacturers is not a profit, but high quality. assets. Domestic-funded enterprises rely on their own management and integration capabilities to acquire bottleneck companies overseas, acquire each other’s technologies, customers, and channels, and improve their capacity utilization and profitability through their own integrated management, control costs, and fully exploit the profit potential of the asset. Upward flexibility is huge.
Question one: The market is worried whether the large-scale expansion of the PCB industry in mainland China will lead to surplus and price war?
1 The company's expansion of production in the industry is mostly a planning phase. The expansion cycle is 1-1.5 years. It takes 19 years after the actual release. 2 The companies that we recommend focus on, we can fully enjoy the automatic upgrade bonus in 2018; 3PCB is an order. Drive the industry, the customized property can guarantee the level to a certain extent; 4 Consider the customer's choice of production capacity, yield, experience, shipping stability, the scale of the domestic-funded large-scale manufacturers will be Evergrande; 5 mainland China's global PCB(Thick copper pcb wholesales china) production capacity About 50%, while domestic-funded enterprises only account for 18.3%, among which the proportion of excellent companies is even lower. Under this basis, their respective expansions have little impact on the overall supply of the global economy; 6 Environmental protection tends to lead to many small domestic-funded factories and foreign-funded enterprises Shut down, backward production capacity has been largely eliminated.
Question two: Some small and medium-sized domestic-funded companies are also increasing their revenues. Is the logic of industry concentration increased?
More than 1500 manufacturers in the PCB industry, more than 1,500 manufacturers in the mainland, the degree of concentration is not and can not be directly focused on the top 5 or the top 10 manufacturers, and there will be a step-by-step transition of concentration, with the wisdom of the factory's first-mover advantage of the company is expected to ultimately benefit; 2 The PCB industry has a low level of concentration due to the surrounding supporting effects and the advantages of the small plants, and the delivery time is significantly shortened with the help of automated production lines. The supporting effect of the surrounding area will continue to be weakened, and the technical reserves, yield, and shipment quality will be stable. Manufacturers are expected to achieve true growth.
Question 3: The overall growth of the industry is less than last year. Is the valuation limited?
There is no downward trend in the industry, with only 18% of the internal assets still have sufficient room for improvement. The per capita output value of the automation plants in the industry has ranked at the forefront of the electronic sector and can be compared with the IC design/distribution manufacturers; with the release of performance, the valuation ceiling is expected to open. .
2. The trade wars between the US and China that the market is worried about have no material impact on the business of domestic A-share PCB manufacturers that we recommend. In the previous trade war, the limitation of PCB board was mainly the direct export of PCB in TV, and the proportion in the industry was very low. The pre-stage over-adjustment was mostly market sentiment, and since then the steady trend has shown market acceptance.