The PCB industry is in line with the semiconductor and global economic cycle. The past two years have been affected by the global economy and the economy is at a low level. Since the first half of 2014, the global economy has returned to the upward trend of the economy, the semiconductor cycle has risen, and the industry has shown signs of recovery. The large-scale investment of domestic 4G is a catalyst to boost the industry's prosperity. At the same time, the price of bulk copper foil and fiberglass cloth, which is the main cost of the industry, is still on the decline, which has ushered in a large bargaining space for enterprises.
The quarterly report of listed companies in the relevant industry chain has verified the upward trend of the industry. Ultrasonic Electronics (000823) net profit increased by 106% year-on-year; Shengyi Technology (600183) deducted non-net profit increased by 35% year-on-year, sales gross margin increased by 3.5%, both hit the highest since the third quarter of 2011. In terms of Hong Kong and Taiwan enterprises, Zhisheng (2467.TW), the leader in upstream PCB equipment, increased its revenue in the first quarter by 41.3%. Other PCB equipment factories such as Yangbo, Mass, and Mude also showed optimism in 2014. In addition to the active expansion of mainland Taiwan PCB manufacturers, Japanese and Korean manufacturers also showed strong expansion momentum, driving orders from Taiwan's PCB equipment factory to grow substantially.
Shengyi Technology (600183): Around the 4G demand, the second quarter capacity release. The company is the leader of upstream CCL, and its contribution to 4G business is relatively high. Therefore, it is the most profitable product in the current round of industry boom. With the completion of the sixth phase expansion of Songshan Lake in the second quarter, the company's FR4 capacity is expected to increase by 10%, mainly for 4G base stations, and the non-EPS in the second quarter is expected to reach 0.12-0.15 yuan, and the valuation advantage is highlighted.
Chaohua Technology (002288): Actively enter the flexible circuit board. The Meizhou Taihua and Huizhou Hezheng acquired by the company in 2013 will all achieve profitability, which will bring greater growth to the company's endogenous performance. At the same time, Huizhou Hezheng has cut into the raw materials of flexible circuit boards. The company expects to integrate downstream into flexible copper clad laminates and PCBs through the integration of industrial chains, and acquire mergers and acquisitions related projects.
Xingsen Technology (002436): The IC carrier board cut into the national team will help the subsequent board to quickly increase, and is expected to benefit from the national integrated circuit support policy. Benefiting from 4G and military products, the company's first quarter revenue increased by 57% year-on-year, net profit increased by 26% year-on-year, the turning point trend is clear, and the growth rate in the second quarter is expected to be above 50%.
Ultrasound Electronics (000823): OGS progressed to improve valuations. The proportion of PCBs in the company's main business is still around 50%, and 4G business accounts for a relatively large proportion. In the first quarter, EPS is up 106% year-on-year. At the same time, the company's OGS business is running smoothly and is expected to enter the iwatch and automotive electronics sectors, which will significantly boost the company's valuation.