Shennan Circuit (002916): Production ramp up to accelerate 5G and carrier board products expected

Shennan Circuit (002916): Production ramp up to accelerate 5G and carrier board products expected

Event: The company released its 2018 annual report with a total operating income of 76.

2 billion, an annual increase of 33.

68%; net profit attributable to mother 6.

9.7 billion, an annual increase of 55.

61%; net profit of non-attributed mothers 6.

47 yuan, an annual increase of 69.

67%; The profit distribution plan is 7 dividends for every 10 shares.

50 yuan, 2 shares for every 10 shares.

Key points of investment: communications, servers drive rapid growth of PCB business, continue to expand research and development investment in the company’s PCB business to achieve main business income53.

7.9 billion, an annual increase of 38.

15%, accounting for 70 of operating income.

76%, growth is mainly from communications, driven by demand in the server field.

The company’s Nantong Intelligent Factory started production in the second half of 2018, entered a ramp-up phase of production capacity, and terminated revenue at the end of 20182.

4.8 billion yuan.

At the same time, the Nantong plant was converted and put into operation, and the factories in Shenzhen and Wuxi adjusted and optimized the product structure, and made progress in the promotion of specialized production capacity and profitability.

The company has invested 18 years in research and development3.

4.7 billion, an annual increase of 18.

33%, accounting for 4% of operating income.

56%, mainly invested in high-speed, high-frequency, ultra-large capacity and other key areas of synchronous communication printed circuit boards, preparing 武汉夜网论坛 for the 5G era.

The company’s MEMS-MIC package substrates maintain its advantages, and the electronic assembly business enhances its operational capabilities. The company’s package substrates business achieves main business revenue9.

470,000 yuan, an annual increase of 25.

52%, accounting for 12 of operating income.

45%, gross profit margin increased by three in ten years.


MEMS-MIC is the main product of the substrate business. The company continues to maintain a leading edge in the technology and output of such products; at the same time, fingerprint-type and RF module-type package substrates have achieved rapid growth.

The construction of the company’s Wuxi substrate factory is progressing in an orderly manner, and it is expected to be put into production in 2019.

The company’s electronic assembly business realized main business income9.

2.7 billion, 西安耍耍网 an annual increase of 27.

08%, accounting for 12 of operating income.

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

The profit forecast is accompanied by the successive release of the company’s production capacity, and 5G business is fast. We adjusted the profit forecast based on the latest financial report. It is estimated that the company’s EPS will be 2 in the next three years.

6, 3.

5 and 4.

5 yuan, the company as the industry leader to give an estimated premium, at the same time the package substrate elastic expansion and contraction, maintaining the “recommended” level.

Risk reminder: 5G advances less than expected, and increased competition leads to product price drop risks.