Jiangsu Bomin HDI project has entered a stable profit stage, determined to increase the size of the rigid flex board to open up a new growth space. After breaking through the key technical indexes of high-end high-end HDI manufacturing, such as "arbitrary layer interconnection, 50 μ m / 50 μ m minimum linewidth / line spacing, 75 μ m minimum blind hole, less than 15 μ m plating blank dimple and ±25 μ m interlayer alignment deviation", the company successfully realized the profit of the IPO project (Jiangsu Bomin HDI project) by optimizing the product structure. Jiangsu Bomin's net profit in 2019 was 31.4483 million yuan, turning a loss into a profit. High-end HDI boards have high requirements for equipment and technology, and each process of research and development, equipment running-in and trial production takes a long cycle. at present, there are only a few domestic PCB enterprises that can achieve stable batch production and supply of high-end HDI. The profit model built by the company through hard work and technological breakthroughs is highly sustainable. It is believed that Jiangsu Bomin's HDI project will contribute stable performance flexibility to the company in the future.
The company is currently planning to raise funds through a fixed increase to build a "high-precision multi-layer rigid-flex combined printed circuit board industrialization project", with a total planned investment of 589 million yuan, with Jiangsu Bomin as the implementing unit. The company has sufficient technical reserves in the field of rigid-flex plywood, and has won a number of invention patents and municipal, provincial and national awards. Although there are some differences between the technology of rigid flex plywood and HDI, the experience of production line construction and profit model construction is replicable enough, so it is reasonable to believe that the progress of this rigid flex plywood project will be better than that of high-level HDI project. The final landing of the fixed increase project will help to broaden the company's product line, enrich the supply system, and then turn technology into stable income and profits, and further open the ceiling of the company's growth.
The second phase of Juntian Hengxun's performance commitment has been overfulfilled, and vertical integration has deepened the corporate moat. In 2019, the subsidiary Juntian Hengxun realized a net profit of 114.6316 million yuan belonging to the shareholders of the parent company after deducting non-recurring profits and losses, exceeding the promised performance.
In the past two or three years, under the background of the transfer of the global PCB industry to China, domestic mainstream PCB enterprises have expanded their production capacity one after another. in this round of arms race, Bomin not only enjoys the industry transfer dividend, but also chooses another growth path: vertical integration of the industrial chain.
The acquisition of Juntian Hengxun is one of the core initiatives. Juntian Hengxun mainly specializes in customized electronic device solutions, after serving a total of 200 customers in intelligent control, power management and other fields. master a large number of electronic components application experience and module preparation, device linkage, dynamic operation analysis and failure resolution and other capabilities. In the future, the company will further strengthen the layout of Juntian Hengxun in the field of PCBA, build a solution business group, and then raise the competition barriers of the enterprise. from this dimension, the acquisition of Juntian Hengxun is not simply the pursuit of the thickening of report performance, but of strategic significance.
Special sheet technology-oriented, differential competition to grab card position dividend. Guided by the technology of high-end special plates such as HDI board, rigid-flex composite board, metal substrate and high-frequency substrate, the company implements differential competition strategy. The R & D and production of high-power boards used in the three-electricity system of new energy vehicles, such as "strong and weak electricity integrated special printed circuit board", is also the embodiment of this competitive thinking, and this kind of products often have higher barriers. It is difficult for competitors to achieve technological breakthroughs, certification and supply substitution in the short term, which will help the company to fully enjoy the card dividend. After years of accumulation, the company has cooperated deeply with outstanding enterprises in many fields, such as communication equipment, automotive electronics, medical devices, military high-tech products, testing systems, aerospace, home appliances and so on, and will continue to adhere to the idea of differentiation in the future. continue to expand high-quality customers in servers, 5G base stations, optical modules, smartphones and IoT modules and other industries.
By the end of April, the three major operators have completed the bidding work for the collection and acquisition of 5G base stations, and the domestic equipment manufacturers have won a good share. in this case, the construction of domestic 5G base stations this year will bring strong demand for local PCB enterprises, and orders are expected to spill over from front-line communication board enterprises to other suppliers with excellent technology accumulation. This provides a good opportunity for Bomin to obtain orders from equipment manufacturers such as Huawei and ZTE, as well as related manufacturers of antennas and base stations.
Profit forecast and investment rating: give an overweight rating. Jiangsu Bomin's turnround and Juntian Hengxun's consolidated table not only thicken the company's reporting performance, but also give the company a sound driving force for future growth, vehicle high-power board business is advancing in an orderly manner, and new applications are expected to make gains. The company's 2020-2022 performance is expected to be 245 million yuan, 306 million yuan and 384 million yuan respectively, the current stock price corresponding to the PE 23.66,18.98 and 15.11 times, given overweight rating.
Risk hints: (1) the downstream market suffered a certain degree of order loss affected by the epidemic; (2) the growth rate of Jiangsu Bomin production capacity was not as expected; (3) the domestic car electronic rate and the progress of on-board PCB were not as expected; (4) the expansion of new customers was not as expected.
