Widely used for PCB, customization and cost control is an important industry characteristics:

PCB’s main function is to connect all kinds of electronic components, is also very wide application field. Great differences due to the numerous downstream industries, so the PCB industry has very strong customization features, participate in numerous manufacturers, leading to PCB supply situation is very scattered. At the same time, despite having a large PCB production process, but most technology is relatively mature, technology is not the key to win in the PCB industry, cost control ability is the core factor of profitability.

The steady growth of overall demand, 5 g sharp pull communication requirements:

Prismark forecast global PCB industry in 2017 and 2022 the average annual compound growth rate of around 3.2%, will reach $68.8 billion in 2022. Communication is the downstream side of the PCB is the most important application fields, with 5 g construction will begin from 2019, the overall number of acer station will probably is 1.5 times that of the 4 g, and the construction of auxiliary micro base station, the general PCB usage will increase dramatically. At the same time, the high frequency of high-speed transmission layer, the material, the new requirements will lead to PCB process, communication board of value also have greatly increased.

Domestic PCB fast development, the leading advantages more apparent:

The global PCB industry focus continues to shift to mainland China, the mainland’s output has accounted for more than 50%, but still mainly foreign investment set up factories in mainland China, domestic enterprises have larger development space. Domestic enterprises through the two methods of endogenous development and extension of mergers and acquisitions, on the one hand, through the IPO, convertible bonds and other way actively raising money to expand capacity, on the other hand actively acquire foreign mismanagement of the factory, has realized rapid development. In CPCA released “the sixteenth session of China’s electronic circuit industry” list, the 87 PCB enterprises in domestic revenue to reach 62.074 billion in 2016, up 15.93% from a year earlier, the growth is significantly higher than the average level in foreign PCB enterprise.

Investment advice: focus on cost control ability, outstanding technical strength of the company

PCB industry market space is large, in 5 g niche to the rapid growth of the local PCB enterprises by using two methods of endogenous development and extension of mergers and acquisitions, is expected to achieve rapid development, the first time we have to cover the PCB industry to “buy” rating. Dongshan precision is apple soft board core suppliers, outstanding technical ability, maintaining a “buy” rating. JingWang electronic cost control ability, develop new products, expand new capacity at the same time, the cover for the first time to “buy” rating, Shennan circuit deep communication and actively participate in the 5 g experiment, the future benefits are expected to take the lead in 5 g construction, for the first time to “buy” rating.

Risk analysis:

The boom of macro economic downturn affecting industry; Raw material prices erode profitability; 5 g and other emerging demand progress than expected.