Suntech (002815): Massive market in transition benefits 5G industry advancement continues to be optimistic about steady growth in performance
Investment Highlights Suntech is a leading PCB supplier: Suntec continues to 上海夜网论坛 deeply cultivate the PCB industry and is committed to providing one-stop PCB services. It currently covers more than 1,000 customers in more than 50 countries and regions.PCB vendor.
According to the latest data from Prismark, in 2018 Suntech ranked 32nd in the world’s top 100 PCB companies, 7 positions ahead of 2017.
Industrial trends and market demand continue to be favorable: First of all, for the traditional PCB market, the competitive advantages of high-quality domestic large-scale domestic enterprises have gradually emerged, and Suntech’s technical performance will continue to benefit from the industrial concentration and capacity transfer of the traditional PCB market.
Fundamentally speaking, the communication PCB market has a large number of technical defects and high barriers to entry. After the steady increase in the number of 5G base stations and the replacement of antenna technology, the number and performance of PCB boards will be directly driven. We believe that future communicationsPCB board will face the favorable situation of rising prices.
The core technology is rapidly and iteratively upgraded, and the forward-looking deployment is in the positive year: the growth rate of R & D expenditure has been maintained at more than 10% from 2014 to 2018. Stable capital expenditure has cast Suntech’s leading technological advantages. Currently, it is used in 11 major products.Initialization of 69 core technologies for independent research and development, at the same time, the minimum chip thickness, minimum line width spacing, and other key technical aspects to achieve technical updates and replacements.
We believe that in the future, Suntec Technology will continue to expand research and development investment and accelerate the development of core technologies. Currently, Suntec has 9 projects under research and 42 core technologies.
Transition to medium and large-volume markets, and promote high-margin production of high-end editions: First, officially entered the medium and large-volume market in 2016. The industry line continues to be enriched, and revenue growth space is widened. In 2018, Suntec’s sales volume of large-volume orders accounted forThe ratio reaches 70%. Among the supplementary order amount, 70% are medium and large-volume orders.
Time: In the past three years, the gross profit margin of high-end boards is 4 percentage points higher than that of mid-to-low-end boards, indicating that the profitability of high-end board business is stronger. Therefore, Suntech actively dates the expansion of production lines, opens up intelligent manufacturing, and comprehensively promotes the production of high-end boards.
The PCB industry maintains prosperity, and Suntech’s performance will continue to benefit: In the future, the global PCB market will maintain a steady growth trend, and 5G systems have begun to use a small amount in 2018, which will continue to help the PCB market.
According to the Prospective Industry Research Institute, by 2020, the global PCB output value will reach 71.8 billion U.S. dollars, and will exceed 75 billion U.S. dollars by 2024.
Among them, the proportion of PCB output value in mainland China will continue to increase.
With the industrial concentration and capacity transfer, we believe that Suntec Technology will continue to benefit as a major domestic supplier.
Profit forecast and investment grade: We estimate Suntech’s operating income for 2019-2021 to be 43.
10,000 yuan, 52.
72 trillion and 66.
0.6 million yuan, EPS is 0.
79 yuan, 1.
$ 2 and 1.
29 yuan, the corresponding PE estimates are 27.
72X, the first coverage given a “buy” rating.
Risk warning: 5G industry progress is less than expected; operator capital expenditure is less than expected.