GKG(301338)2025-03-20 16:02Summary of KGG Precision Machinery Conference Call Company Overview - KGG Precision Machinery operates in four main business segments: solder paste printing equipment, dispensing equipment, flexible automation equipment, and packaging equipment. The first three are primarily used in the electronic assembly industry, while the latter is used for semiconductor and LED packaging [3][4]. Core Business Insights - The electronic assembly downstream applications include consumer electronics (approximately 33%), automotive electronics (approximately 20%), network communication (approximately 20%), and medical devices (approximately 10%) [3]. - In 2024, consumer electronics experienced continuous growth for seven consecutive quarters, driven by increased circuit board demand from new energy vehicles and a significant rise in AI server demand, leading to a notable increase in product shipments [3]. - KGG's dispensing equipment saw a doubling in revenue, increasing from 50 million to around 100 million, attributed to core component localization and technological innovation [3][4]. - KGG's solder paste printing equipment holds a leading global market share, with over 50% in the domestic market and approximately 30% globally [3][9]. Market Performance - In Q1, the company reported strong performance, with solder paste printing and dispensing equipment shipments increasing by 30%-40% year-on-year [7][24]. - High-end solder paste printing product demand is increasing, with expected shipments nearing historical highs in 2024, and projected to account for over 70% of sales in 2025, primarily in mobile phones, servers, and new energy vehicles [14][3]. Strategic Partnerships and Innovations - KGG has collaborated with Huawei on a patented "integrated printing and mounting" technology, which has begun bulk supply, generating an order volume of approximately 70 million yuan with a gross margin exceeding 40% [15][16]. - The company is actively seeking acquisition opportunities to enhance its semiconductor product line, particularly in GaN and SiC aging test equipment [19][23]. Research and Development - R&D investment accounts for about 10% of revenue, with a focus on seven common technology groups, incentivizing teams with revenue sharing based on new product gross margins [5]. Sales and Distribution - KGG has 24 offices nationwide and a sales subsidiary in Singapore, with products registered in over 70 countries and regions, covering 50 countries [6]. Financial Outlook - The company anticipates overall growth of 20%-30% in the first half of the year, with a strong likelihood of doubling revenue and profit over the next three years, returning to historical peak levels [24]. Market Trends - The domestic solder paste printing market is valued at approximately 1 billion yuan, while the global market is around 2.6 billion yuan, with a compound annual growth rate of about 5% in the electronic assembly industry [11]. Competitive Landscape - The domestic dispensing market is estimated at 30 billion yuan, with major competitors including Japanese and American firms [8]. KGG's dispensing equipment currently has a gross margin of about 36%, with potential for further improvement as sales increase [8]. Conclusion - KGG Precision Machinery is well-positioned in the electronic assembly and semiconductor equipment markets, with strong growth prospects driven by technological innovation, strategic partnerships, and a robust market presence. The company is focused on expanding its product offerings and enhancing profitability through R&D and potential acquisitions.