5G construction drives industry chain boom and PCB sector takes the lead
Summary of content: 5G is gradually entering the construction stage, and the maturity of the industry is gradually increasing, driving the prosperity of the upstream industry.
On the one hand, 5G mobile phones are gradually available in the third quarter of this year, and the industry chain is optimistic about late-stage investment. Industry giants are optimistic about the prospect of 5G and increase annual capital expenditures. On the other hand, with the acceleration of 5G network equipment, the collection of upstream RF devices, PCBs and other equipment on the equipment side has begun in the first half of the year, and it has also been partially reflected in the interim results statements of related companies. Circuits, Shengyi Technology and other shares of the first half of the performance was dazzling.
The 5G industry expectation and the industry's high prosperity have pushed the stock prices of related industry chain companies to continue to rise. On July 25, Shengyi Technology, Shennan Circuit, Shanghai Electric Power Co., Ltd. and Pengding Holdings all hit record highs.
PCB industry maintains high prosperity
The 5G industry chain's outstanding performance growth is mainly in the network equipment industry. In June, the equipment giant Huawei announced that the number of Huawei's global base stations shipped will increase to 500,000 by the end of this year.
On July 25, the stock price of Shengyi Technology was capped. The company released an interim semi-annual performance report on the evening of July 24. The operating income in the first half of the year was 5.973 billion yuan, an increase of 2.9% year-on-year. Among them, the net profit attributable to mothers in the second quarter was 379 million yuan, an increase of 34% year-on-year and 52.6% month-on-month, exceeding market expectations.
Shengyi Electronics, a subsidiary of Shengyi Technology, is one of Huawei and ZTE PCB product suppliers. The CICC Electronics team analyzed that Shengyi Technology ’s second-quarter performance was higher than expected due to the accelerated 5G construction progress. Huawei ’s base station business in the second quarter drove the PCB business beyond expectations; Shengyi Technology ’s unit price of copper clad laminates fell more slowly than the cost of its products, and its profit margin Better than expected. In addition, its high-frequency board began small-scale trial production in May, and its product structure gradually improved.
Affected by the favorable construction period of 5G, in the second quarter, Huawei ’s other two major suppliers of PCB products, Shennan Circuit and Shanghai Electric Power Co., also enjoyed high-speed profit growth, both of which were above 60% year-on-year.
Shennan Circuit recently announced the forecast of the first half of 2019. It is estimated that the net profit attributable to mothers in the first half of the year will be 421 million to 477 million, an increase of 50% to 70% year-on-year. According to the company's performance forecast range, the single quarter net profit in the second quarter of 2019 was 233 million to 290 million yuan, an increase of 43% to 77% year-on-year, and a quarter-on-quarter increase of 25% to 55%. The second quarter performance has exceeded the fourth quarter of 2018. The highest level in a single season.
In June of this year, when communicating with investors, Shennan Circuit stated that the construction of 4G base stations at home and abroad is still ongoing, and 5G products have gradually entered the small batch phase since the first quarter of 2019, and some of them have entered the batch phase. Definitely improve.
Ping An Securities believes that the main reason for the continued high growth of Shennan Circuit in the second quarter was the company's 5G base station AAU and BBUPCB high value-added orders, including high integration, high-frequency and high-speed products. As major customer orders continue to grow, 5G-related product development is accelerating.
The PCB industry company Hudian shares issued a performance forecast on June 27, showing that net profit for the first half of the year is expected to increase by 123% to 154%, and earnings are expected to be 440 million to 500 million yuan.
In the recent investor exchange, Hudian shares stated that the company has participated in the construction of multiple 5G trial networks around the world. Currently, global 5G is entering a critical period of commercial deployment. On June 6, the Ministry of Industry and Information Technology officially issued a 5G commercial license. The company has integrated production and management resources, improved production flexibility, and fully prepared for 5G network construction to ensure that the needs of 5G customers are met.
Radio frequency and antenna also benefit
Outside the PCB industry, the demand for radio frequency devices from base station equipment has driven related companies to improve their performance. * ST Fangu recently released the first half of the performance report, showing that benefiting from increased market demand, during the reporting period, the company's sales of RF device products increased significantly. In the first half of the year, the company achieved total operating income of approximately 790 million yuan, an increase of 47.07% year-on-year; net profit was 69.321 million yuan, a significant increase from last year's loss of 67.77 million yuan.
* ST Fangu said in a recent investor exchange that the company currently has sufficient orders and saturated production, and its operating conditions have improved from 2018. With the recent issuance of domestic 5G licenses, the company will rely on its deep accumulation in the field of radio frequency communications for nearly 30 years to seize 5G development opportunities and deploy new business growth points based on core R & D and industrial chain integration capabilities.
The 5G antenna sector also has a positive impact. A few days ago, Fei Rongda released the 2019 semi-annual performance forecast. It is estimated that net profit attributable to mothers will be 145 million to 165 million yuan in the first half of the year, a year-on-year increase of 107.01% to 135.56%. Among them, the net profit attributable to the mother in the second quarter was over 100 million yuan, which was 55.31 million yuan to 75.31 million yuan after deduction, reaching the highest level of the company's historical single quarter performance.
Fei Rongda is one of Huawei's suppliers. In June this year, Fei Rongda stated on the interactive platform that the company's 5G antenna vibrator has begun to supply to customers. However, the company did not disclose the impact of related products on performance.
5G terminals will be densely listed
In addition, in terms of 5G mobile phone terminals, 5G mobile phone products of Chinese mobile phone brands entered the consumer market in the third quarter.
According to research firm Strategy Analytics, 5G smartphone shipments will increase from 2 million units in 2019 to 1.5 billion units in 2025, with a compound annual growth rate of 201%. At present, many mobile phone manufacturers have followed the 5G pace and released 5G mobile phone time plans.
A few days ago, ZTE Tianji 5G version obtained the "5G terminal telecommunication equipment network access license" issued by the Ministry of Industry and Information Technology, and accepted the reservation on July 23, expecting to send the product to consumers in August. Huawei's first 5G product, the Mate20X, will also be released on July 26. In the third quarter, OPPO and vivo5G mobile phones will also be launched. From the rhythm point of view, some 5G mobile phones in Q3 will gradually come out this year. Considering the maturity of the baseband chip, 5G mobile phone replacement will be in 2020.
As terminal products heat up, the upstream expectations of mobile phone terminals are also heating up. Chip maker TSMC announced the second quarter of this year's results on July 18, and revenue rose 10.2% month-on-month, slightly exceeding previous guidance and market consensus expectations.
At the performance briefing, TSMC pointed out that the company noticed that the global 5G development speed was better than expected, which will drive the demand for base stations, smartphone-related chips, and the value of single-chip semiconductor elements. The company plans to increase capital expenditures in 2019.