Jingwang Electronics (603228): Plans to expand production of high-layer and HDI to meet the 5G era

Jingwang Electronics (603228): Plans to expand production of high-layer and HDI to meet the 5G era

Event summary ① The company intends to issue convertible bonds to raise funds17.

800 million, occupying the 杭州桑拿网 first phase of Jingwang Electronic Technology (Zhuhai) Co., Ltd.-an annual output of 1.2 million square meters of multilayer printed circuit board project.

② The company intends to use its own funds26.

89 million budget Jingwang Electronic Technology (Zhuhai) Co., Ltd. Phase I project-600,000 square meters of high-density interconnected printed circuit board project.

Analysis and judgment: It is planned to expand production of high-layer boards, share 5G infrastructure and follow-up dividends. The working frequency of 5G is high, and the base station network density is about 4G.

5 times, 2019 is the first year of 5G base station construction. The next few years will be the peak period of 5G network deployment, and the demand for communication base station PCBs will rise rapidly.

According to Prismark forecast, the average annual compound growth of PCB output value of wireless communication infrastructure from 2018 to 2023 will reach 6.

0%, 31 in 2023.

$ 0.3 billion.

5G high-speed transmission, processing and storage will require high-performance servers, and the demand for high-layer printed circuit boards will be more sustained.

According to Prismark statistics and forecasts, the server (including data storage) PCB market output value changes in 201849.

US $ 7.7 billion, an increase of 21 over the previous year.

3%, it is expected that the average annual compound growth from 2018 to 2023 will be 5.


In the middle and late stages of 5G business, connected cars and auto driving will further boost the demand for automotive PCBs, especially high-end PCBs such as millimeter wave radars.

According to Prismark statistics and forecasts, the global automotive PCB output value in 2018 was 76.

USD 1.6 billion, expected to reach 100 in 2023.

USD 2.0 billion, with an average annual compound strength of 5.


The company’s convertible bond investment project builds a national first-level specialized high-layer printed circuit board factory. Its main products are 5G communication equipment, servers, and multilayer printed circuit boards for automobiles. The construction period of the project is 3.

5 years.

After the investment project is completed and put into production, it is expected to realize tax-free annual sales income21.

90,000 yuan, total annual profit before tax is 36,678.

340,000 yuan.

Proposed HDI, meeting the high-end needs of 5G mobile phones. The company plans to invest 268,895.

50 million new high-end HDI (including mSAP technology) production lines, forming a 600,000 square meter high-density interconnected printed circuit board production capacity.

Project planning and construction period 4.

In 5 years, construction will begin in the fourth quarter of 2019, and it is planned to be completed in the first quarter of 2024 and reach production in 2025.

With the upgrade of the chip manufacturing process, mobile phone motherboards are simultaneously moving towards miniaturization and integration. The limit line width and line spacing of the iPhone X motherboard have been reduced to 30um, which may be further reduced to 20um in the future. The thinness and shortness represent the development direction of mobile phone motherboards.

The shrinking of the mobile phone motherboard will drive a wide range of functional components such as cameras, antennas, wireless charging, buttons, and charging interfaces to use FPC, and FPC demand will show high industrial growth.

The company has FPC capabilities and has become a supplier of well-known domestic mobile phone brands. In the future, it will further expand HDI, which is expected to achieve comprehensive coverage of mobile phone motherboards and flexible boards, which will increasingly enhance the competitiveness of the industry and are optimistic about the company’s long-term development trend.

Investment suggestion Zhuhai Elasticity, a subsidiary, is still in the merger period. We expect the business to expand by approximately $ 100 million. In the future, with the internal collaboration and equipment personnel integration in place, it is expected to turn around next year.

The pre-construction stage of the proposed investment project and the initial ramp-up of production capacity will be supplemented. We adjust 2019?
In 2021, the net return to mothers will be 8.

5.9 billion, 10.

5.6 billion, 13.

1.8 billion (previous forecast was 9).
4.5 billion, 13.

1.5 billion, 16.
66 ppm), corresponding EPS is 1.

43 yuan, 1.

75 yuan, 2.

19 yuan.

Reference Shenwan Printed Circuit Board Index In the past 2 years, the PE (TTM) is about 37 times. Since the company went public in 2017, the average PE (TTM) is 32 times, and the change range is 25 times.
42 times.

Give a target price of 52.

5 yuan, equivalent to 30 times PE in 2020, maintain “Buy” rating.

Risks suggest macroeconomic downturn, systemic risk; raw material price risk; exchange rate fluctuation risk; increased competition in the industry.