Look for structural growth opportunities in the PCB industry. Before 2000, 70% of global PCB output was distributed in Europe, America, Japan and other three regions. Since the beginning of the 21st century,PCB industry has been shifting to Asia, forming a new industrial pattern. Asia, with nearly 90 per cent of global PCB output, is the world leader in PCB, with the fastest growth in China and southeast Asia. From 2008 to 2014, the scale of China’s PCB market, CAGR9.7%, was far higher than the industry growth rate, but it entered the low-speed growth market since 2015, while the global PCB market size has been basically balanced since 2011. The PCB sector as a whole is oversupplied, so finding structural opportunities is particularly critical. In terms of product category,HDI, flexible board, high-end multi-layer board are still growth plate. In terms of downstream applications, communication and automotive board is a significant growth sector, and is expected to benefit from the popularization of 5G communication technology and intelligent vehicles, and continue to lead the PCB market. From the perspective of product structure, in China’s PCB market, the CAGR of 8-16 multi-layer boards and super-high-rise boards above 18 layers is expected to reach 4.8% and 6.2% respectively in 2017-2022.

The pressure of environmental protection and rising prices of raw materials in 2017 has boosted industrial concentration. Since 2016, the PCB industry faces copper foil, glass fiber cloth, copper and other raw materials rise in price pressures, and throughout the country gradually standardize environmental monitoring system, department of environmental protection law enforcement increasing, part does not have the competitiveness of enterprises began to exit, the competitive landscape gradually to have bargaining power, environmental indicators, reserve capacity of giant tilt. Therefore, we extend our research vision of PCB to global leading enterprises.

Current investment tips:

According to prison mark, in 2017, huatong ranked fourth among the world’s printed circuit board manufacturers. Founded in August 1973, huatong computer co., ltd. was the first professional printed circuit board manufacturer in Taiwan to respond to the government’s development of high-tech strategies and industrial policies. The company is located in huizhou, guangzhou, chongqing, hsinchu and big garden five to seven factories, covers products including high density PCB, high-level board, hard and soft compound circuit boards, flexible circuit board and other circuit board products, mainly for the Apple, Motorola, Nokia, huawei, millet, zte mobile phone giant and tablet manufacturers supply.

At present, the PCB produced by huatong applies information (such as notebook computer, server, peripheral equipment), communication (such as mobile phone, tablet, base station), network (such as switch, router, network storage equipment) and consumer electronic products. In 2017, mobile, PC and smt-related revenue accounted for 39 percent, 27 percent and 24 percent, respectively, while consumer electronics and cloud service applications accounted for a relatively low 5 percent each.

HDI’s revenue of $875 million ranks first in the world. As early as 1997, huatong pioneered the use of laser drilling machines to produce high-density link (HDI) circuit boards, which were mainly used in micro-via manufacturing technology for advanced communication, network equipment, mobile phones and other products. In 1999, huatong began to enter the communications market by producing mobile phones and base station circuit boards with HDI technology. In 2016 and 2017,HDI accounted for 50%/48% of huatong’s income respectively.

Huatong has been leading in product development. In 1983, it began to produce more than 6 layers of computer printed circuit boards in mass production, and led the development of Taiwan’s printed circuit board industry towards multi-layer boards. In 1991, the production of laptop motherboard with more than 8 layers of circuit boards. In 1997, cooperated with panasonic electrician of Japan, established panasonic electrician electronic material (guangzhou) co., LTD., and officially produced fc-pga. In 1999, the first generation of FlipChip substrate factory was built in dayuan. In 2000, it became the only two PCB manufacturers in Taiwan that could mass produce FlipChip substrate, and became one of Intel’s four major suppliers of FlipChip substrate worldwide. In 2017, due to the demand of Apple in the United States, production of the plywood began. Huatong class board production capacity industry leader, can provide 30/30um thin line arbitrary layer thin plate to 40 layers 200mil high reliability thick plate.