PCB News - Citi Securities is optimistic about niche PCBs for communications

Citi Securities is optimistic about niche PCBs for communications

In the niche printed circuit board(PCB) industry, as the end application market changes, the business prospects of manufacturers are also very different. Foreign-invested Citi Securities is optimistic about niche PCBs for communications, but is relatively conservative with information PCBs. Among Taiwanese manufacturers, Citi Securities recommends "buy" Tripod (3044), "sell" Jingsus (3189) and Nandian (8046) ).

Citi Semiconductor analyst Xu Zhenzhi pointed out that from the perspective of the overall industrial environment, demand for end products such as desktop computers, laptops, memory, and hard drives has been weak in the past few quarters, and there is no sign of recovery in the next few quarters. Although the average selling price (ASP) has remained stable, the continued reduction in revenue has affected the profitability of PCB factories.

The ASP (average unit price) of HDI in the third quarter was stable compared to the first half. However, due to oversupply and fierce competition, most manufacturers still have price pressure.

Xu Zhenzhi believes that from the perspective of terminal applications, although strong demand for smartphones drives industry growth, weak PC and NB demand continues to increase the adverse factors in the industry's prospects. Therefore, among the various PCB industries, HDI, FC-CSP (chip size flip chip substrate) for large-area CPU or GPU, and finally traditional PCB are the most promising ones.

Among the relevant Taiwanese manufacturers, Tripod has been relatively favored by Xu Zhenzhi among the niche PCB manufacturers due to its good execution and the bottoming of its fundamentals. However, it may take a long time for the recovery to be expected. Time, will slightly affect profit performance, so the target price is lowered to 74 yuan.
Although Jingsus benefited from Apple’s strategy of diversifying orders, it is estimated that orders will not grow significantly by the end of next year. Coupled with fierce competition from FC-CSP, this year’s EPS will be slightly lower than last year. A decline of 2.7%, so the "sell" rating remains unchanged, with a target price of 69 yuan.
Nandian's share price is already below book value, but Xu Zhenzhi expects to fall further, mainly because Nandian's core business is unfavorable for gross profit performance and profit growth. Therefore maintain the "sell" rating.
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