Kinwong(SH:603228) Minsheng Securities·2025-03-27 12:23Investment Rating - The report gives a "Buy" rating for the company, with a target price based on projected earnings growth and market positioning [4]. Core Viewpoints - The company is a leading domestic PCB manufacturer with steady revenue growth, achieving a CAGR of 14.17% from 2019 to 2023, with revenues increasing from 6.332 billion to 10.757 billion yuan [1][17]. - The PCB industry is expected to grow significantly, driven by demand from consumer electronics, automotive, and AI server markets, with a projected CAGR of 5.4% from 2023 to 2028 [2][38]. - The company has a strong technological foundation and diversified product offerings, positioning itself well to capitalize on the AI wave and automotive electronics growth [3][4]. Summary by Sections Company Overview - The company, established in 1993, specializes in the R&D, production, and sales of various PCB products, including rigid boards, flexible boards, and HDI boards, serving multiple sectors such as automotive electronics and consumer electronics [1][10]. - The company has maintained a gross margin above 22%, with a gross margin of 24% in the first three quarters of 2024 [1][21]. PCB Industry Insights - The PCB market is projected to reach $90.4 billion by 2028, with strong growth in consumer electronics, automotive, and AI server applications [2][38]. - The automotive sector is experiencing a surge in PCB demand due to increased electronic integration and the rise of electric vehicles, with PCBs in electric vehicles reaching 5-8 square meters per vehicle [83]. Financial Projections - The company is expected to achieve revenues of 12.423 billion, 14.907 billion, and 18.171 billion yuan from 2024 to 2026, with corresponding net profits of 1.222 billion, 1.605 billion, and 2.061 billion yuan [4][5]. - The projected PE ratios for the company are 26, 20, and 16 for the years 2024, 2025, and 2026, respectively, indicating a favorable valuation [4][5]. Technological and Market Positioning - The company has established six production bases and twelve factories, covering a wide range of PCB products and achieving breakthroughs in high-end applications such as AI servers and advanced communication modules [3][4]. - The company has successfully validated multiple products with leading global optical module manufacturers, enhancing its market presence [3].