According to Prismark, an industry research institute, the global PCB market has an average annual compound growth rate of 4.2% from 2019 to 2025, while China's PCB market has an average annual compound growth rate of 5.39%. The growth rate of the domestic PCB industry will be faster than that of the global industry.
On the evening of February 16, PCB "Little Giant" Fang Bang issued the first annual report of 2021, and the company's operating income and net profit declined compared with the same period last year. However, the company's focus in recent years on the layout of lithium copper foil and standard electronic copper foil products will begin to achieve revenue in 2021, adding a new growth engine for the company's future development.
Industry insiders believe that the lithium copper foil produced by Fangbang Co., Ltd., as the negative material of power battery, will mainly benefit from the global automobile electrification and has broad prospects for development. The demand for automobiles, servers and IC boards will drive the performance of PCB enterprises to make steady progress.
Overall performance decline
According to the 2021 annual report, Fangbang shares achieved revenue of 286 million yuan last year, down 0.76% from the same period last year, and net profit of 37.8331 million yuan, down 68.27% from the same period last year. The company's net profit in the fourth quarter of last year was-9.6871 million yuan, the first quarterly loss in nearly four years.
Fangbang Co., Ltd. is mainly engaged in the research and development, production and sales of high-end electronic materials, and the existing products include electromagnetic shielding film, flexible copper clad laminate, ultra-thin copper foil and so on. Fangbang Co., Ltd. is a national specialized new "Little Giant" enterprise, and it is also one of the few manufacturers in the world that master ultra-high shielding effectiveness and extremely low insertion loss core technology. According to the 2021 annual report, the company's electromagnetic shielding film products have a global market share of more than 25%, ranking first in China and second in the world.
According to the annual report, the decline in the company's performance last year was mainly caused by both product-side and cost-side factors. On the product side, Fangbang said that due to the passivation of terminal sales growth of smartphone products in 2021, the sales volume and prices of shielding film business decreased compared with the same period last year, and the revenue of electromagnetic shielding film products decreased by about 45 million yuan.
In terms of gross profit margin, the annual report shows that the company's consolidated gross profit margin in 2021 was 51.23%, a decrease of 15.17 percentage points compared with 2020. The company said that copper foil business capacity utilization and yield and other aspects are still in the climbing stage, resulting in a decline in the company's overall gross profit margin.
On the cost side, the company continues to increase its R & D investment in product areas such as electromagnetic shielding film, flexible copper clad laminate, ultra-thin copper foil and resistive film. According to the annual report, the company's R & D investment accounted for 24.85% of operating income in 2021, an increase of 9.08 percentage points over the same period last year. In addition, when the Zhuhai subsidiary was put into use, the depreciation expenses of plant and equipment increased, and the corresponding staffing led to an increase in employee compensation expenses; the company implemented an equity incentive plan in 2021, resulting in share payment fees of about 17.98 million yuan, an increase of about 10.05 million yuan compared with 2020.
Open up new growth points
In recent years, the localization of copper foil supply chain is becoming more and more urgent in key industries such as 5G communications, artificial intelligence, big data Center and automotive electronics, which are closely related to the field of high-end chip packaging. Fangbang attaches great importance to the market layout of localization of copper foil products.
According to the annual report, the company's lithium copper foil and standard electronic copper foil products have begun to achieve revenue in 2021. According to the company, the Zhuhai copper foil project with an investment of about 400 million yuan by Fangbang shares has been put into production in the third quarter of 2021, and the revenue of copper foil products has reached 41.9965 million yuan in 2021, making it a new revenue growth point for the company.
Fangbang said that the thickness of the ultra-thin copper foil developed and produced by the company can be as thin as 1.5 μ m, with excellent properties such as low surface profile, high thermal stability, high elongation and tensile strength, and stable and controllable peeling force. including belt carrier can be stripped ultra-thin copper foil, lithium copper foil and standard electronic copper foil and so on. Lithium copper foil is a necessary substrate for the preparation of negative electrode materials for lithium battery. high-quality lithium copper foil can improve the energy density of lithium battery. At present, the mainstream thickness of lithium copper foil on the market is 6 μ m, and gradually develops to 4 μ m. The lithium copper foil produced by the company can meet the above demand.
In terms of customers, Fangbang shares said that after years of development, the company has accumulated many well-known terminal product customers such as Samsung, Huawei, OPPO, VIVO, Xiaomi, as well as domestic and foreign well-known flexible board (FPC) customer resources, such as Pengding, MFLEX, Qisheng, Hongxin Electronics, Jingwang Electronics and so on. The customers of new products such as flexible copper clad laminate and ultra-thin copper foil have a high degree of overlap with existing customers, which is conducive to the market development of new products.
Debang Securities said that the ultra-thin copper foil produced by Fangbang will mainly benefit from the global electrification of cars, and lithium copper foil, as the negative material for power batteries, is expected to be converted into a new engine for the company's growth.
Broad market prospects
Soochow Securities said that the application demand in the downstream areas of the PCB industry can be divided into communication equipment, industrial control and medical treatment, aerospace, automotive electronics, computers and other sub-areas. In the field of consumer electronics, as the market of traditional consumer electronic products tends to be saturated, the proportion of PCB applications remains basically stable. PCB is mainly used in household appliances, drones, VR devices and other products in the field of consumer electronics.
"the development of the new energy automobile industry will bring a new and fast-growing blue ocean market to the PCB industry." Soochow Securities analysts said, "as cars become more intelligent and lightweight, vehicle PCB will be used in GPS navigation, dashboards, sensors, cameras and other devices, with an added value of more than 1000 yuan."
Anxin Securities said that under the guidance of the new infrastructure policy of the 14th five-year Plan, the development of China's data center industry is facing acceleration, and data demand is driving the growth of PCB demand for computers / servers and data storage.
According to Prismark, an industry research institute, the global PCB market has an average annual compound growth rate of 4.2% from 2019 to 2025, while China's PCB market has an average annual compound growth rate of 5.39%. The growth rate of the domestic PCB industry will be faster than that of the global industry. It is estimated that by 2025, the overall size of China's PCB industry market will increase from US $35.1 billion in 2020 to US $42 billion.
Fangbang is currently speeding up the construction and trial production of new product projects. The company said in December that the first production line of the flexible copper clad laminate project is expected to be available by the end of the first quarter and the beginning of the second quarter of 2022. The business layout of electromagnetic shielding film, flexible copper clad laminate, copper foil and resistive film will be formed in the next three years. "with the gradual expansion of production and sales of new products and the continuous optimization of product structure, the company's business scale and overall profitability are expected to achieve rapid growth in the next two years." Fang Bang shares said.
