公司积极推动产品结构升级，优质客户放量显著。当前AI 产业来到高速发展日新月异的阶段，AI 服务器和高速网络系统的旺盛需求推动对大尺寸、高速高多层PCB 和高阶HDI的结构性需求，带动公司持续优化产品结构。随着AI 服务器需求增长迅速，公司持续加大研发投入，在算力和AI 服务器领域取得重大突破，目前已实现5 阶20 层HDI 产品的认证通过和产业化作业，并加速布局下一代高阶HDI 产品的研发认证，此类产品广泛应用于各系列AI 服务器领域。AI 类需求有望打开公司的成长空间，带动公司盈利中枢逐渐抬升，稳步推动公司产品结构性升级。Description of the event
Shenghong Technology released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved operating income of 7.931 billion yuan, an increase of 0.58%; realized net profit of 671 million yuan, a year-on-year decrease of 15.09%; realized net profit without return to mother of 662 million yuan, a year-on-year decrease of 12.24%. In the first quarter of 2024, the company achieved operating income of 2,392 million yuan, a year-on-year increase of 36.06%; realized net profit of 210 million yuan, an increase of 67.72% over the previous year; and realized net profit without deduction of 207 million yuan, an increase of 81.08% over the previous year.
Incident comments
The company actively promotes product structure upgrading, and the number of high-quality customers is remarkable. Currently, the AI industry has reached a stage of rapid development. Strong demand for AI servers and high-speed network systems is driving structural demand for large, high-speed high-layer PCBs and advanced HDI, driving the company to continuously optimize its product structure. As demand for AI servers grows rapidly, the company continues to increase investment in R&D, and has made major breakthroughs in the field of computing power and AI servers. It has now achieved certification and industrialization operations for level 5 and 20 HDI products, and has accelerated the development and certification of next-generation high-end HDI products. Such products are widely used in various AI server fields. Demand for AI is expected to open up the company's growth space, drive the company's profit center to gradually rise, and steadily promote the structural upgrading of the company's products.
Continue to dig deeper into segments and further explore new growth drivers. In a market environment where product prices declined due to weak demand in the consumer electronics industry in 2023 and increased competition in the industry, the company actively adjusted its marketing strategy, and there was a marked increase in products in the fields of servers, automobiles, new energy, industrial control, medical care, etc. With the technological revolution in AI computing power entering the current market boom, the AI market has ushered in unprecedented opportunities and increases. The fields of AI PCs and AI mobile phones have all begun to develop rapidly. The company has achieved batch operation of AIPC products and simultaneously carried out product certification for AI mobile phones. In the field of automotive electronics, the company is the world's largest TOP2 PCB supplier for electric vehicle customers, and sales are growing year by year. The company has introduced a number of world-class automotive Tier 1 customers, and the products have been industrialized in small batches.
Maintain a “buy” rating. As a leading enterprise in the PCB industry, Shenghong Technology will continue to improve its position in the industry with high technology, high quality and high quality products. As the company continues to optimize its product structure and continuously increase the proportion of high-end digital communication products, we are optimistic that subsequent companies will fully enjoy the growth brought about by the AI wave. It is expected that in 2024-2026, the company will achieve net profit of 1,145, 14.60, and 1,742 billion yuan, corresponding to the current share price PE of 19.69, 15.45, and 12.95 times, respectively, and maintain a “buy” rating.
Risk warning
1. AI server delivery falls short of expectations;
2. Downstream demand growth falls short of expectations.
