Key investment points

The world's leading copper clad plate, based on terminal demand solutions

According to Prismark statistics, from 2013 to 2022, Shengyi Technology's total sales volume of rigid copper-clad sheets has jumped to second place in the world. The global market share has stabilized at around 12%, reaching 14% in 2023. The company independently produces high-end electronic materials such as copper-clad sheets, semi-cured sheets, insulating laminates, metal-based copper foil, resin-coated copper foil, and covering films, which are widely used in high computing power, AI servers, 5G antennas, next-generation communication base stations, large computers, high-end servers, aerospace industry, chip packaging, automotive electronics, smart homes, industrial control medical equipment, home appliances, consumer terminals and various high-end electronic products.

The backbone of localization, vigorously carry out independent innovation

Since 2005, the company has been tackling the technical problems of high-frequency high-speed packaging substrates for a long time. Facing foreign technology blockades, with deep technical accumulation, it has now developed a full range of high-speed products with different dielectric losses, different dielectric application requirements, and multi-technology routes, and has achieved a variety of batch applications. At the same time, in terms of copper-clad plate technology for packaging, the company's products have been used in batches in the fields of card packaging, LEDs, memory chips, etc., and have been developed and applied in higher-end AP, CPU, GPU, and AI products represented by FC-CSP and FC-BGA packages.

Actively lay out high-speed materials, AI innovation core benefits

With the advancement of electronic technology, the speed of signal transmission is getting faster and the amount of data passing through is increasing. Low loss requirements are placed on copper-clad plates of electronic materials. Fields such as AI servers, AIPC, and AI mobile phones will all cause new demand in the industry. The company's copper-clad plate is a hardware support for computing power, and there are corresponding product lines to meet the needs of different customers. The company's high-speed products have a full range of layouts, including mid-loss, low-loss, very lowloss, ultra-low-loss, extreme low-loss and higher grade materials, which can meet the needs of different application fields. The company's extremely low loss products have passed the material certification of many domestic and overseas end customers, and are currently in the process of product project certification.

Profit forecasting and valuation

The company's 2024-2026 revenue is expected to be 19.819/22.649/25.169 billion yuan, respectively, with a year-on-year growth rate of 19.49%/14.28%/11.13%; net profit to mother is 1.868/2.424/2.905 billion yuan, a year-on-year growth rate of 60.47%/29.78%/19.85%, corresponding to the current stock price PE of 28.99/22.34/18.64 times, EPS 0.77/1.00/ 1.20 yuan. As downstream demand for terminal products such as de-warehousing, AI-driven, and consumer electronics picks up, and the company relentlessly expands overseas markets, domestic technology continues to break through, and overseas factory construction is progressing steadily. The future is expected to usher in new opportunities for growth, so it maintains a “buy” rating.

Risk Alerts

Risks such as downstream demand falling short of expectations, rising upstream raw material prices, falling short of expectations in core customers, and falling short of expectations in technology research and development.