20220413-招银国际-深南电路-002916.SZ-1Q22_in_line_with_positive_margin_surprise_4页_978kb

报告摘要

Shennan Circuits (002916 CH) 1Q22 Summary

Core Content

Shennan Circuits (002916 CH) reported its 1Q22 results, which were largely in line with expectations and showed a positive margin surprise. Revenue and Net Profit (NP) grew by 21.7% and 42.9% YoY, respectively, reaching RMB3,316 million and RMB348 million. The company's performance was attributed to a favorable product mix, recovering GPM for PCBA, improved operational efficiency from the new Nantong factory, and product/customer structure optimization for the PCB and substrate businesses.

Despite the partial lockdowns in China having limited impact on production, demand uncertainty remains due to ongoing supply chain disruptions. The macroeconomic environment is still challenging, and the recent resurgence of COVID cases adds to the concerns. Looking ahead, the company remains cautious about the outlook, particularly in the telecom market, where demand is weak, and 5G-related spending is expected to be lower than previous years.

Key Financial Highlights

Revenue Growth: FY22E revenue is expected to grow by 18.3% YoY, supported by new capacity and strong demand in datacenter and auto sectors.
Gross Margin: Improved to 26.8% in 1Q22, up 4.3% from 4Q21.
Net Profit Margin: Increased to 10.5% in 1Q22, up 1.6% YoY.
EPS: Expected to reach RMB3.90 for FY22E, up 29.0% YoY.
PE Ratio: Trimmed to 26.2x FY22E P/E, down from the prior 30x.

Target Price & Recommendation

Maintain HOLD with an adjusted target price of RMB102.00 (down from RMB110.75).
Upside/Downside: +14.5% from current price (RMB89.10).
Potential Upside Factors: Sooner-than-expected ease of chip shortage, stronger consumer demand recovery, and removal of material cost and logistics overhangs.

Market & Industry Context

The China Technology Sector is under scrutiny due to macroeconomic headwinds and ongoing supply chain issues.
5G Base Station Additions: Expected to reach ~670k in 2022, including 28k at 700MHz, down from 650k in 2021.
Overall Capex: Flat in 2022, with 5G-related spending lower than previous years.

Peer Valuation

Company	Ticker	Rating	12M TP (LC)	Price (LC)	Upside/Downside
Shennan	002916 CH	Hold	102.00	89.10	+14.5%
Shengyi Tech	600183 CH	Hold	19.00	15.84	+19.9%
WUS	002463 CH	NR	NA	10.83	NA
Kinwon	603228 CH	NR	NA	21.70	NA
DSBJ	002384 CH	NR	NA	17.19	NA
Zhen Ding	4958 TT	NR	NA	108.00	NA
TTM	TTMI US	NR	NA	13.55	NA
UMTC	3037 TT	NR	NA	216.50	NA

Stock Data

Market Cap (HK$ mn): 46,093
Avg 3 mths t/o (HK$ mn): 306
52w High/Low (HK$): 126.66 / 74.88
Total Issued Shares (mn): 512.9

Shareholding Structure

AVIC International Holdings: 63.97%
HK Securities Clearing: 2.69%
China Asset Management Co: 0.94%

Share Performance

Period	Absolute	Relative
1-mth	-10.4%	-5.0%
3-mth	-20.5%	-3.9%
6-mth	-1.3%	+13.9%

Key Ratios

Metric	FY20A	FY21A	FY22E	FY23E	FY24E
Revenue Growth (%)	10.2%	20.2%	18.3%	17.6%	19.0%
Gross Profit Growth (%)	10.0%	7.6%	24.3%	20.4%	23.1%
Operating Profit Growth (%)	14.7%	-0.5%	30.0%	22.3%	31.2%
Net Profit Growth (%)	16.0%	3.5%	28.7%	22.6%	31.1%
Gross Margin (%)	26.5%	23.7%	24.9%	25.5%	26.4%
Operating Margin (%)	14.0%	11.6%	12.7%	13.3%	14.6%
Net Profit Margin (%)	12.3%	10.6%	11.6%	12.0%	13.3%
ROE (%)	19.2%	17.4%	15.3%	16.5%	18.6%
Current Ratio (x)	1.2	1.2	1.7	1.9	1.8
Receivable Turnover Days	65	63	64	63	64
Inventory Turnover Days	79	81	80	81	81
Payable Turnover Days	66	58	62	60	61

Auditor

Auditor: BDO

Risk & Disclaimer

The report is not an offer to buy or sell any security.
CMBIGM does not provide individually tailored investment advice.
There are risks involved in transacting in any securities, and actual events may differ materially from those in the report.
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Analyst Certification

The research analyst certifies that the views expressed in the report accurately reflect his or her personal views.
The analyst confirms no financial interest in the companies covered in the report.
The analyst has not traded in the stock(s) covered in the report within 30 calendar days prior to the report's date of issue.

CMBIGM Ratings

BUY: Potential return of over 15% over next 12 months.
HOLD: Potential return of +15% to -10% over next 12 months.
SELL: Potential loss of over 10% over next 12 months.
NOT RATED: Stock not rated by CMBIGM.
OUTPERFORM: Industry expected to outperform the relevant broad market benchmark.
MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark.
UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark.

Important Disclosures

The report is not suitable for all investors.
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The report is for distribution solely to "major US institutional investors" or "Accredited Investors, Expert Investors, or Institutional Investors" in Singapore.
CMBIGM may have a position in the securities of companies mentioned and may not be independent of the companies in this report.

Company Overview

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This summary provides a concise overview of Shennan Circuits' 1Q22 results, financial performance, market outlook, and the analyst's recommendation, along with key financial ratios and disclosures.

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