SCC(SZ:002916) Ping An Securities·2025-08-28 03:13Investment Rating - The report maintains a "Recommended" investment rating for the company, with a current stock price of 169.5 CNY [1]. Core Insights - The company reported a significant increase in performance driven by AI, achieving a revenue of 10.453 billion CNY in the first half of 2025, representing a year-over-year growth of 25.63%, and a net profit attributable to shareholders of 1.36 billion CNY, up 37.75% year-over-year [5][6]. - The overall gross margin and net margin for the first half of 2025 were 26.28% (up 0.08 percentage points YoY) and 13.02% (up 1.16 percentage points YoY), respectively [6]. - The PCB business saw a revenue of 6.274 billion CNY, a 29.21% increase year-over-year, accounting for 60.02% of total revenue, with a gross margin of 34.42% (up 3.05 percentage points YoY) [6]. - The IC substrate business generated 1.740 billion CNY in revenue, a 9.03% increase year-over-year, while the electronic assembly business achieved 1.478 billion CNY, up 22.06% year-over-year [6]. - The company is actively advancing the construction of new projects in Thailand and Nantong, which will support future business expansion [6]. Financial Summary - The company’s revenue is projected to grow from 13.526 billion CNY in 2023 to 35.537 billion CNY by 2027, with a compound annual growth rate (CAGR) of approximately 25% [8]. - Net profit is expected to increase from 1.398 billion CNY in 2023 to 4.762 billion CNY in 2027, reflecting a strong growth trajectory [8]. - The gross margin is anticipated to improve from 23.4% in 2023 to 27.0% by 2027, while the net margin is expected to rise from 10.3% to 13.4% over the same period [8]. - The company’s return on equity (ROE) is projected to increase from 10.6% in 2023 to 21.6% by 2027 [8]. Business Segmentation - The PCB segment is the largest contributor to revenue, followed by the IC substrate and electronic assembly segments, indicating a diversified business model [6][10]. - The company is focusing on enhancing its capabilities in the IC substrate business, particularly in high-end DRAM products and processor chip applications, which are expected to drive future growth [10]. Investment Recommendation - Based on the latest financial results and capacity expansion progress, the profit forecast for the company has been slightly upgraded, with expected net profits of 2.856 billion CNY, 3.815 billion CNY, and 4.762 billion CNY for 2025, 2026, and 2027, respectively [10]. - The company is expected to benefit from the domestic substitution of semiconductor substrates, and the current valuation supports a "Recommended" rating [10].