Both revenue and profit have dropped, accelerating production capacity layout

Affected by the weak demand in the printed circuit board industry, two PCB manufacturers in Dongguan experienced a double decline in revenue and profit.

On August 18, Shengyi Technology announced its results for the first half of 2023: revenue of approximately 7.881 billion yuan, a year-on-year decrease of 15.93%; net profit attributable to shareholders of listed companies was approximately 555 million yuan, a year-on-year decrease of 40.67%. In contrast, the weakening trend of Shengyi Electronics’ profitability is more obvious. The company’s revenue in the first half of this year was about 1.583 billion yuan, a year-on-year decrease of 12.01%; the net profit attributable to shareholders of listed companies was about 9.57 million yuan, a year-on-year decrease of 94.05% .

The main business of Shengyi Electronics is the R&D, production and sales of printed circuit boards, while Shengyi Technology focuses on the business of copper clad laminates and bonding sheets. Based on the interim reports of the two companies, the main reason for the sharp decline in their profits is the weak demand in the PCB industry and fierce price competition, resulting in a year-on-year decline in the gross profit margin of the two companies’ products.

In the first half of this year, the PCB sector of the A-share market has disclosed that the performance of the 8 companies reported in the mid-term is under pressure, and the net profit attributable to the parent company has fallen by 65.89% as a whole. In addition to the double increase in profit of Mankun Technology, the performance of 7 companies including Shengyi Electronics and Shengyi Technology recorded varying degrees of decline.

The Prismark report pointed out that due to the impact of uncertainties in the global economy, the global PCB market output value is expected to shrink by 9.3% in 2023, reaching US$74.139 billion. However, in the medium and long term, the compound growth rate of the global PCB industry from 2022 to 2027 will be 3.8%, still showing a steady growth trend.

The report also pointed out that at present, major domestic PCB manufacturers have formed their own competitive advantages and bargaining power in various subdivisions. In 2022, the total output value of China’s PCB industry will reach 44.2 billion US dollars, accounting for 54.1% of the world’s total. Manufacturers are seizing the development opportunities of the PCB track, which is expected to further consolidate my country’s leading position in the PCB industry.

Southern Finance and Economics all-media reporters noticed that just seeing the continuous growth of medium and long-term market demand, two PCB listed companies in Dongguan have recently disclosed production expansion plans, “counter-cyclical” layout production capacity to wait for the recovery of the industry.

On July 29, Shengyi Technology announced that the company plans to invest in a new copper-clad laminate and adhesive sheet production base in Thailand, with an investment of about 1.4 billion yuan, including but not limited to establishing a company in Thailand, purchasing land, and purchasing fixed assets. and other related matters. In January this year, the board of directors of Shengyi Technology agreed to invest in the construction of Changshu Shengyi Technology Co., Ltd. with an annual output of 11.4 million square meters of high-performance copper clad laminates and 36 million meters of adhesive sheets, with a total investment of 945 million yuan.

Shengyi Electronics disclosed on July 13 that the company plans to invest about US$100 million in a new PCB production base in Thailand. According to the current plan, the Thailand project will mainly produce PCBs required for servers and computers, and the products will be sold to electronic consumer markets in various regions of the world, not limited to Thailand.

In this regard, industry insiders believe that at present, the downstream terminals of the domestic PCB industry are under relatively high pressure to destock. But in the long run, with the continuous development of the domestic electronic information industry, the application fields of PCB will be extensive in the future, and the development space of the industry will be very broad.