Event: according to the 2023 half-year report released by Bomin Electronics, 1H23 achieved revenue of 1.513 billion yuan, down 1.39% from the same period last year; net profit from home reached 72 million yuan, down 34.13% from the same period last year; realized sales gross profit margin of 14.90%, down 1.85 pct from the same period last year; realized net sales profit rate of 4.76%, lower 2.37pct compared with the same period last year.

The decline in demand affected the results in the first half of the year, and Q2 improved significantly. Affected by weak global demand and high inventory pressure, Prismark expects global PCB output to decline by 4.13% year-on-year to US $78.367 billion in 2023. The company won the bid at the head of customer energy storage orders, and through measures such as reducing costs and efficiency, the decline in 2Q23 performance narrowed year-on-year, with a significant increase in month-on-month. The company's Q2 achieved a revenue of 858 million yuan in a single quarter, an increase of 30.79% over the previous quarter, and a net profit of 51 million yuan, a big increase of 143.47% over the previous quarter. In terms of profitability, the company's 2Q23 sales gross profit margin reached 15.47%, increased 1.33pct month-on-month, sales net profit rate reached 5.96%, increased 2.76pct.

With deep ploughing in three major areas, PCB business has developed steadily. 1H23 domestic PCB market competition is more fierce, there is insufficient domestic demand, industry overcapacity, resulting in the company's PCB business year-on-year pressure. The company's PCB business focuses on three major areas: new energy, data communications and intelligent terminals. The new energy sector (including automotive electronics) industry is improving, and the demand for PCB continues to increase. The company's revenue from new energy (including automotive electronics) accounted for 38% in the first half of the year, and the company successfully won the bid for energy storage orders from domestic and overseas customers, ensuring a stable source of orders.

AI computing creates new opportunities, actively laying out servers and connecting high-end PCB. The company has technical reserves related to supporting 100G/400G digital printed boards and obtains small batch applications, and actively promotes the commercial landing of the next generation server computing platform EGS and 800G switches. The demand of the consumer market is weakening, and the smart terminal is under short-term pressure. The short-term demand for PCB products related to smart terminals is reduced, and the company maintains the stability of the order share of core customers of HDI products through product structure optimization, realizes the increase of market share of consumer electronics ODM customers, and will gradually achieve volume expansion in the second half of the year.

Layout of innovative business modules, future growth is expected. Ceramic liner business, the company has passed the certification of a number of customers and obtained orders, and is expected to start production and delivery in the second half of the year. Under the background of SiC replacement of silicon-based and domestic replacement, we will actively promote the rapid expansion of ceramic liner business. Sealing and loading board business, Jiangsu Bomin Phase II intelligent factory put into production and production capacity climbing, mSAP process packaging carrier plate and non-core board process the first high-end thin line into the operation stage, the company successfully set foot in the high-end IC packaging carrier plate field. At the beginning of the year, the company reached a cooperation with Hefei Economic and technological Development Zone, and plans to invest about 5 billion yuan with relevant industrial funds to invest in the construction of a new industrial base project in Hefei Economic Development Zone, so as to expand the production capacity of ceramic liner and IC package carrier board.

Investment suggestion: benefiting from the rapid development of the downstream new energy field, and the volume of the company's forward-looking ceramic liner and package board business, it is expected to achieve a net profit of 1.60 USD 2.24 / 311 million in 23-24-25, and the corresponding share price PE is respectively times that of 44-31-22, maintaining the "recommended" rating.

Risk hint: the growth rate of new energy is slowing down, the demand for packaging board is lower than expected, and the competition in the industry is fierce.