研究报告全文：MN22Sep2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateShengyiTech600183CHExpectmodestsequentialgrowthin2H23TargetPriceRMB1610CCLandPCBindustriesfacedongoingchallengesthataddedpressureonPreviousTPRMB1480ShengyiTechsperformanceTheCompanys1H23revenueNPtoUpDownside56shareholdersdeclinedby159407YoYtoRMB7880mnRMB555mnCurrentPriceRMB1525GPMfellto193in1H23vs234205in1H222H22LookingforwardweChinaTechnologyexpectmodestsequentialgrowthin2H23asthemgmtmentionedrecentLilyYANGPhDoperationsofCCLproductswererunningonfullcapacityHoweverwethink85239163716investorsshouldwaitforaclearersignaloffullrecoveryofthedownstreamlilyyangcmbicomhkdemandwhichwouldsupportrevenuegrowthandmarginrecoveryMaintainKevinZHANGHOLDwithadjustedTPofRMB161basedon20xrollover2024EPE85237618727kevinzhangcmbicomhkIndustrydowncycleweighsontheCompanysperformanceTheworldwidePCBmarketexperiencedasignificantdeclineof20YoYinStockData1H23ThefallingdemandhurtmoreontheASPsideCCLPCBesthigh-MktCapRMBmn358345Avg3mthstoRMBmn2595teenslow-teensinpricechangeassalesvolumewasrelativelyresilient52wHighLowRMB19851270EventhoughtheinventorylevelofsomedownstreamclientsisrelativelyTotalIssuedSharesmn23498SourceFactSetlowtheywerereluctanttopurchasematerialsWesawtheindustryisconsolidatingthroughourchannelcheckswhichhassuppressedtheShareholdingStructureGuangdongGuangxin248willingnesstopullupinventoryHoldingsGroupDongguanGuohong137ShengyiTechisbetter-positionedthanitspeerswithoperationsonfullInvestmentSourceHKExcapacityhoweverthemarketiswaitingforaclearersignalofdemandreturnPerPrismarktheCompanyrankedsecondgloballyintermsofCCLSharePerformancesaleswith12marketsharegloballyandwithabroadendmarketAbsoluteRelative1-mth5563coverageThemgmtalsomentionedoperationofCCLbusinessisalready3-mth-0350atfullcapacityTherearespotlightsonautomainlyEVandservermarket6-mth-169-135SourceFactSetHoweverabroadermarketdemandisstillweakMeanwhilecopperpricehasincreasedrecentlyandtheCompanywasunabletopassdownthe12-mthPricePerformanceincrementalcostunderthecurrentcircumstanceswhichwouldfurtherhurttheCompanysGPMintheneartermWecutFY2324ErevenueandNPforecastsby68and2621astheCompanys1H23resultswerelowerthanourexpectationsandtheGPMcompressionindowncycleislonger-than-expectedWethinknear-termSourceFactSetpressurewouldpersistbutShengyiTechshouldhavemodestsequentialgrowthin2H23fromalowbaseMaintainHOLDwithTPadjustedtoRMB161basedonthesame20xrollover2024EPEasthemarketiswaitingforaclearsignofdemandrecoveryandup-cycleEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn2027418014174982017523601YoYgrowth38011129153170Grossmargin268220195213230NetprofitRMBmn28301531126918712547YoYgrowth684459171474361EPSReportedRMB123066055080110YoYgrowth662465170474361PEx196251279189139ROE24611593132166SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk22Sep2023Figure1CMBIGMestimatesvsconsensusCMBIestimatesConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue174982017523601182142125224343-4-5-3GrossProfit341243005418378547775753-10-10-6OperatingProfit147821782962184225093006-20-13-1Netprofit126918712547167023002742-24-19-7EPSRMB055080110072096115-24-16-4GrossMargin195213230208225236-13ppt-12ppt-07pptOperatingMargin84108125101118123-17ppt-1ppt02pptNetMargin739310892108113-19ppt-16ppt-05pptSourceCompanydataCMBIGMestimatesFigure2EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue1749820175236011861721821NA-6-8NAGrossProfit34124300541840575150NA-16-17NAOperatingProfit14782178296219812779NA-25-22NANetprofit12691871254717102382NA-26-21NAEPSRMB055080110074103NA-26-22NAGrossMargin195213230218236NA-23ppt-23pptNAOperatingMargin84108125106127NA-22ppt-19pptNANetMargin739310892109NA-19ppt-16pptNASourceCompanydataCMBIGMestimatesFigure112MforwardPEbandRMBmnFY20EFY21EFY22E1H232H23EFY23EFY24EFY25ECCL10849161901399860507419134701577717976YoY85492-135-169105-381711397480787777777876PCB35583508340415731924349738134982YoY170-14-30-9014927903072417192020201921Other280577613257274531584643YoY421106062-292100-13310010023333333Total14687202741801478819617174982017523601YoY109380-111-16113-29153170SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE222Sep2023Figure412MforwardPEbandFigure512MforwardPEchart45RMB50404535403530302525202015151010506-2009-2006-2109-2109-2209-2309-1812-1803-1906-1909-1912-1903-2012-2003-2112-2103-2206-2212-2203-2306-230619032209181218031909191219032006200920122003210621092112210622092212220323062309231-yrForwardPEMeanClosingPx144x201xMean1SDMean-1SD259x316x373xSourceCompanydataCMBIGMestimatesSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE322Sep2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue146872027418014174982017523601Costofgoodssold107541483714045140861587518184Grossprofit393354373969341243005418Operatingexpenses177322542105186720812348Sellingexpense284351341364399443Adminexpense720910797700807944RDexpense7119649438058981015Others59282422255Operatingprofit209033161785147821782962Otherincome562334Otherexpense121114121416GainlossonfinancialassetsatFVTPL35023975Othergainslosses15047828559127EBIT208333101773146921672949Interestincome114656576166Interestexpense121139171163160153Pre-taxprofit208333101773146921672949Incometax283385141117172235Aftertaxprofit180029251632135219942715Minorityinterest1209510184123168Netprofit168128301531126918712547Grossdividends9171389104786812801742BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets97161472014232131501427115574Cashequivalents81821053095323835883694Restrictedcash3218111111111Accountreceivables605076286809608666997447Inventories251945204084363437594212Prepayment202424212630Othercurrentassets278260210159187180Non-currentassets8642987811148115301151811493PPE637470717866836785948651Right-of-useassets07344383430Deferredincometax120158220227231246InvestmentinJVsassos358622671669675684Intangibles167814312128206018551771Goodwill97190000FinancialassetsatFVTPL002542440Othernon-currentassets14503195172153150Totalassets183572459725380246802578927067Currentliabilities680472537377674465646010Short-termborrowings21571693155812461165274Accountpayables326742923984340931933550Taxpayable12517350656067Othercurrentliabilities7253341237168416841684Contractliabilities322820252833Accruedexpenses498733529315434401Non-currentliabilities87222772122176119332309Long-termborrowings60515901175110212761639Bondpayables0300800500500500Obligationsunderfinanceleases06639353840Deferredincome267321108123119130Othernon-currentliabilities000000Totalliabilities767695309499850584978319Sharecapital229123122327232423242324Retainedearnings368153705366545462467225Otherreserves391854155805594561566443Totalshareholdersequity98891309613498137231472615993Minorityinterest75417701798188220052173Totalequityandliabilities183192439624795241102522826485PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE422Sep2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation180029251632135219942715Depreciationamortization531673726798872940Taxpaid193747213Changeinworkingcapital8121898104574903617Others2581133543317699Netcashfromoperations175817762820276621412951InvestingCapitalexpenditure176117871534163513251393Acquisitionofsubsidiariesinvestments2145377435461507Netproceedsfromdisposalofshort-term7613436201410investmentsOthers1640269Netcashfrominvesting1833188011931179856884FinancingDividendpaid110111611619121010281433Netborrowings69740480023793528Proceedsfromshareissues1892254192600Others19921600Netcashfromfinancing215139864814489351960NetchangeincashCashatthebeginningoftheyear10518182105309532383588Exchangedifference58611400Others2901293979139350107Cashattheendoftheyear81821053095323835883694GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue10938011129153170Grossprofit115382270140260260Operatingprofit158586462172474360EBIT154589464171474361Netprofit160684459171474361PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin268268220195213230Operatingmargin1421649984108125ReturnonequityROE18024611593132166GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx070605040303Currentratiox142019192226VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE370196251279189139PEdiluted381199251279189139SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE522Sep2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE6