Summary of the report
Deep ploughing PCB, vertical layout to make up the short board on the side of the components. Since its inception, the company has been working in the field of printed circuit boards. After years of development, the products now include multilayer boards, high-density interconnection HDI, high-frequency high-speed boards, flexible circuit boards, rigid-flex boards, metal substrates, thick copper plates and so on. At present, the company has PCB production bases in Meizhou, Shenzhen and Jiangsu, and Jiangsu Bomin locates high-end PCB products. It mainly produces HDI board, soft board, soft-hard bonding board, integrated circuit carrier board, class carrier board, packaging substrate, etc., with 360000 square meters of HDI, 240,000 square meters of arbitrary order HDI and 80,000 square meters of rigid-flex composite boards. In 2018, through the acquisition of Juntian Hengxun, the company cut into the field of integrated customized solutions for PCBA core electronic components, making the company have the strength to provide more comprehensive system services for some downstream customers whose designs and capabilities are difficult to match the module, and realized the "board + components + solution".
Compound value-added.
Revenue is growing steadily and HDI business has entered a profit growth cycle. Since listing, the company's PCB production capacity has increased steadily, benefiting from the continuous development of the customer base, the continuous optimization of order structure and the improvement of product added value, the company's operating income has increased steadily, and the company's management expense rate, R & D expense rate and sales expense rate have remained basically stable over the years. After 2017, with the successful breakthrough of the second-order HDI technology and the continuous rise of production line yield and production line yield, Jiangsu Bomin successfully turned losses into profits. The overall gross and net interest rate of the company rebounded rapidly, and the gross and net interest rate is expected to rise further as the company's high-end HDI and other high-end products account for a further increase in the future.
In economical 5G smart phones, due to the increase in the use of RF chips, passive components and BTB connectors, and for cost considerations, the HDI motherboard will usher in the following trends: (1) direct increase in area, (2) use of double-layer structure, and (3) order improvement, all of the above three ways will increase the production capacity consumption of HDI. Therefore, the economical 5G smartphone is the first to infiltrate. It is expected to lead to the improvement of the demand for low-level HDI, such as second-order and third-order.
The HDI layout of Bomin Electronics started earlier than before listing, and is constantly deepening. Although there is still a gap between the overall PCB production capacity and the domestic first-tier PCB companies, the HDI production capacity alone tends to be in the forefront of the domestic market. In the future, on the basis of continuing to improve its HDI process capacity, it is expected to follow the domestic first-line HDI manufacturers and expand the overall share in the field of intelligent terminals. And the company is currently building a "high-precision multi-layer rigid-flex printed circuit board industrialization project" in Bomin, Jiangsu Province. the stable profit model built through hard training and technological breakthroughs has strong sustainability and replicability. therefore, the progress of the rigid-flex plywood project is expected to be better than that of the high-level HDI project. The final landing of the project will help to further broaden the company's product line and enrich the supply system. And then turn the technology into stable income and profits.
Automotive high-power PCB layout industry leader. Since 2007, the company has actively laid out PCB products for automotive electronic and electrical systems and automotive electronic control systems. in recent years, the company has focused on the intelligent connection scheme and comprehensive solution for new energy vehicles. At present, the two technical problems of high-density intelligent control printing and reliability for automotive electronics have been solved, which can help customers to realize the high integration, structure and modularization of the three-electricity system. The company has grown into a leading supplier of on-board PCB in China, and is expected to fully benefit from the rapid and healthy development of the domestic new energy vehicle industry in the future.
At the same time, through the analysis and solution of the failure of electrical control and power management, Juntian Hengxun has a deep grasp of the nature of components and circuits, and the matching funds raised during the acquisition of Juntian Hengxun are also used for projects related to high-power devices, high current or motor control. The combination of Juntian Hengxun and Bomin paves the way for the company to move forward in the field of high-power vehicle components and control modules. In the future, the company is expected to have the ability to provide customers with modular products and customized electronic circuit solutions in the field of new energy vehicle power.
PCB has a variety of application scenarios in automobiles, driven by the trend of electrification, intelligence and lightweight, even if compared with the traditional advanced fuel vehicles, the consumption of bicycle PCB will be greatly increased, and because the performance of some on-board PCB is closely related to the safe driving of vehicles, the shock in the driving process has extremely stringent requirements on the pressure bearing capacity of PCB, and the sensitivity of car companies to product performance is better than that of price. These factors make the average value of vehicle PCB higher.
Overall, automotive PCB is expected to usher in sustained and rapid growth, according to Prismark forecast, the global output value of automotive PCB is expected to reach 9.4 billion US dollars in 2023.
Earnings forecast and rating: upgrade to buy rating. Obviously, with the rapid penetration and growth of 5G mobile phones, there will be a clear incremental momentum for the overall market demand and localization of the HDI board. With the rapid progress of the two production bases in Meizhou (headquarters) and Jiangsu (incremental production), Bomin Electronics has begun to seize market share in recent years, showing a better growth pattern. The process of high-power thick copper at the vehicle end, as well as the embedding of high-current metal conductors, solid three-electricity modular design experience, integrated customization and delivery have always been important tools for Bomin to walk the world, and the overall growth rate has also been clearly improved in recent years.
Under the premise of the steady development of traditional communications, medical, military, testing and other industrial fields, Bomin relies on the two important breakout points of medium-and high-level HDI and vehicle application. After 2020, the endogenous growth begins to appear gradually, and the sustained resilience is also guaranteed by solid incremental production capacity and orders. Optimistic about the possibility of bringing in more first-and second-tier customers in the new energy sector, as well as its continued progress in the HDI field, the company is expected to achieve results of 345 million, 460 million and 584 million respectively in 2021-2022, with the current share price corresponding to PE 16.78,12.59 and 9.93. obviously has a good margin of safety and room for growth, upgrade the rating to buy. no, no, no.
Risk tips: (1) Jiangsu Bomin production capacity growth rate is not as expected; the second phase of the construction progress is not as expected; (2) the domestic car electronic rate and on-board PCB progress is not as expected; (3) new customer expansion is not as expected; (4) Juntian Hengxun integration effect is not as expected.