Shennan Circuit (002916) Annual Report Comments: Rapid Growth in Performance Domestic PCB Leaders Usher in 5G Era

Shennan Circuit (002916) Annual Report Comments: Rapid Growth in Performance Domestic PCB Leaders Usher in 5G Era

The 2018 performance is in line with expectations, and the 2019 performance is expected to continue to grow rapidly. The company released its 2018 annual report: In 2018, it achieved operating income of 76.

02 ppm (+33.

68%), net profit attributable to mother 6.

9.7 billion (+55.

61%); of which, the fourth quarter achieved revenue of 22.

6.5 billion (+53.

83%), net profit attributable to mother 2.

2.4 billion (+105.

29%), in line with our previous expectations.

We believe that Shennan Circuit, as a domestic PCB leader, will fully benefit from the background of the upcoming 5G and the acceleration of semiconductor localization.

It is estimated that the company’s net profit attributable to the mother for 2019-2021 will be 9 respectively.



17 trillion, corresponding to 3 EPS.



72 yuan, the current sustainable corresponding PE is 40/29/23 times.

Maintain the “Highly Recommended” rating.

The company’s performance has grown rapidly, and the gross and net profit levels have continued to increase. The company’s performance in 2018 has achieved rapid growth, as detailed below: (1) The company’s PCB business is still the main source of profit, achieving revenue53.

79 trillion, an annual increase of 38.

15%, accounting for 70 of operating income.


The growth of PCB mainly comes from communication, and the demand in the server field is driven.

At present, the company’s Nantong Intelligent Factory is in the ramp-up phase of production capacity, and by the end of 2018, it had achieved revenue2.

48 ppm; (2) Revenue from packaging substrate business9.

470,000 yuan, an increase of 25 in ten years.

52%, accounting for 12 of operating income.

45%. At present, the company’s Wuxi substrate factory construction is advancing in an orderly manner. The development progress of key customers is in line with expectations. It is expected to start production in 2019. (3) The electronic assembly business achieved revenue9.

27 ppm, an increase of 27 in ten years.

08%, accounting for 12 of operating income.

19%, business growth is mainly due to increased demand for communications products.

The company’s gross profit margin and net profit margin continued to increase. In 2018, the company’s gross profit margin was 23.

13% (+0.

73 pct), of which the gross profit margin of the PCB business is 23.

04% (+0.

71pct), the gross profit margin of the substrate business is 29.

69% (深圳桑拿网+3.
57pct), the gross profit margin of the electronic assembly business is 18.
32% (-0.

95pct); the company’s net profit decreased by 9.

19% (+1.


Leading domestic PCB companies have fully benefited from the 5G era: The company’s PCB product application uses communication equipment as the core, and actively cooperates with customers to develop 5G wireless base stations, bearer networks, core networks and other PCB products, providing high-speed connectivity for communication networks and equipmentHigh-capacity solution.

We believe that 5G commercialization will be gradually upgraded. The construction of 5G base stations will significantly increase the demand for PCBs, and achieve both volume and price.Usher in the 5G era.

Risk Warning: Downstream development is less than expected; Fundraising projects are less than expected; Material price fluctuation risk