Zhitong Financial APP learned that Guojin Securities issued a research report saying that the current short-term prosperity of the PCB industrial chain is not a fundamental improvement in prosperity, and the inflection point of the industry has not yet arrived. However, in the long run, electronic products are still innovating continuously. As an important carrier of electronic products, PCB industry chain will still benefit from the growth effect brought by continuous innovation in the long run. The bank believes that the important innovation direction of the future industrial chain mainly includes automobiles, servers and packaging substrates, and suggests paying attention to the direction of long-term growth.
Recommended concerns:Shanghai Power Co., Ltd. (002463.SZ), Shengyi Technology (600183.SH), Lianrui New Materials (688300.SH), Xingsen Technology (002436.SZ), Bomin Electronics (603936.SH) and other subjects with the opportunity to subdivide the field.
The main points of Guojin Securities are as follows:
The yield of PCB plate ranks in the forefront of the electronics industry, and the stock price of the whole industry chain has a performance.
In November 2022, according to the Shenwan industry classification (2021), the monthly rise and fall of the PCB plate in the electronics industry segment was + 5.4%, outperforming the electronics industry by an average of 3.8%, ranking second in rise and fall.
From the monthly rise and fall of major manufacturers at home and abroad on the PCB industry chain, we can see that whether it is the upstream PCB raw materials (copper foil, fiberglass cloth, resin), the middle reaches of copper clad laminate, or the middle and lower reaches of PCB, the entire industry chain has rebounded well in November after a year of depressed performance.
Supply compression lays the foundation for a rise in the price of raw materials, and stock at the end of the year leads to a short-term mismatch between supply and demand.
From the supply side, PCB upstream raw materials have been facing price reduction pressure since the beginning of this year (the annual change of LME copper price is-15%, the price of domestic 35um copper foil is down 23% from the beginning of the year to November 30, the processing fee is down by-50%, and the major manufacturers of copper foil, fiberglass cloth and resin are doing poorly in the first three quarters), especially when the operating pressure in the third quarter of the traditional peak season of the electronics industry is not decreasing but rising. The industry chain begins to become more pessimistic about future demand, and pessimistic expectations will lead to a reduction in effective capacity (tail manufacturers are cleared and capacity is actively reduced by 10% and 40%).
From the demand side, although the first three quarters were relatively weak, at the end of October, each terminal entered the rhythm of stock preparation at the end of the year. The bank tracked the upstream, middle and downstream companies and learned that the farming rates of all links of the industrial chain had improved. In November, the production rate of major manufacturers has generally returned to 80% 90%, and some large companies are basically close to full production.
In the case of compressed supply and improved demand, there was a short-term mismatch between supply and demand, and the prices of upstream raw materials began to rise one after another. The bank observed that copper foil prices had rebounded twice from the lowest point of the year at the end of October to the end of November, with a total rebound of 11.85%. From the monthly revenue data of Taiwan copper foil and fiberglass fabric manufacturers, we can see that the decline in revenue has also narrowed year-on-year.
It is necessary to guard against the weakening of demand in the off-season in the short term, and it is recommended to pay attention to the direction of long-term innovation.
The bank believes that in November, the industrial chain in the case of supply compression ushered in demand-side improvement, resulting in the current hot scene of the industrial chain, which is finally reflected in the upstream raw material prices and the upstream and downstream farming rates.
However, it is worth noting that the bank believes that the current prosperity of the PCB industry is mainly due to the short-term mismatch between supply and demand. According to the tracking, the bank found that when the current demand seems to have recovered while raw material prices have rebounded, the copper clad laminate link is difficult to charge downstream, which reflects that the demand has not been really repaired, and its intensity is still difficult to support the price rise of the industrial chain.
Under such circumstances, the bank believes that it is necessary to guard against the risk of overdrawing 23Q1 demand in the current inventory behavior, and the increase in the price of upstream raw materials will aggravate the confrontation between supply and demand and trigger negative demand feedback from downstream to upstream, thus deepening the deterioration of the industrial chain.
The bank believes that the turning point in the industry has not yet arrived, but in the long run, there is no shortage of opportunities to increase the value brought about by innovation in some segments of the industry. it is precisely because of the long-term logical support that the stock price of the industrial chain will get a more significant response when the fundamentals are improved in the short term, so the bank suggests paying attention to long-term investment opportunities in the sector.
Risk Tips:The degree of prosperity weakens more than expected; the price of raw materials remains high; and increased competition leads to lower-than-expected profits.