Sytech(600183) 长江证券·2024-02-28 16:00Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Viewpoints - The company, Shengyi Technology, is positioned as a leader in the copper-clad laminate (CCL) industry, with a focus on high-end products driving growth [4][48]. - The CCL market in China has shown steady growth since 2018, with an expected market size of 71.2 billion yuan by 2023 [3][14]. - The demand for high-frequency and high-speed CCL is increasing due to trends in 5G communication, autonomous driving, and AI server development [30][34][42]. Summary by Sections CCL Industry Overview - CCL is a specialized laminated product used in printed circuit board (PCB) manufacturing, serving critical functions of conductivity, insulation, and support [3][12]. - The CCL market is expected to recover as it is currently at the bottom of a price decline cycle, with raw material prices stabilizing [4][19]. Supply Side Analysis - The main raw materials for CCL are copper foil (42%), resin (26%), and fiberglass cloth (19%), with fluctuations in their prices significantly impacting CCL costs [19][22]. - Current prices for copper foil, resin, and fiberglass are at low levels, indicating limited further decline potential [24][25]. Demand Side Analysis - The demand for CCL is driven by the trend towards lighter, thinner, and high-frequency applications in electronics, particularly in sectors like telecommunications and automotive electronics [16][28]. - The growth of 5G infrastructure and AI servers is expected to significantly boost the demand for high-frequency CCL [30][37]. Company Positioning - Shengyi Technology has a strong market presence, ranking second globally in rigid CCL sales with a stable market share of around 12% [4][48]. - The company has invested heavily in R&D to develop a full range of high-speed products, overcoming technological barriers and achieving multiple certifications from leading manufacturers [56][59]. Financial Performance - In 2023, the company reported a revenue of 12.348 billion yuan, a year-on-year decline of 9.72%, with a net profit of 899 million yuan, down 24.88% [52]. - The gross margin for the first three quarters of 2023 was 19.53%, reflecting a decrease compared to the previous year [52].