The automotive electronics PCB market has broad potential.
Since November, Shanghai Electric Co., Ltd. has maintained strong performance, with a cumulative increase of 18%. This strong performance is primarily due to its strong performance. The company’s net profit after deducting non-recurring gains and losses in the third quarter was 368 million yuan, a year-on-year increase of 39.63%. Shanghai Electric Co., Ltd. recently stated in a conference call that with the recovery of the supply chain, subsequent improvement in market demand, optimization of product mix, and the overall downward trend in material prices, the profitability of the company’s automotive board business will gradually recover and improve. Over the next five years, the automotive board market is expected to continue to outperform the overall PCB market and become a new driving force for the development of the PCB industry.
The automotive electronics PCB market has broad potential. There are over ten high-quality listed companies in the A-share market with relevant business operations. Based on the consensus net profit growth forecast by institutions, Eton Electronics ranks first with an expected net profit growth rate exceeding 100% this year.
The automotive electronics PCB market has broad potential.
Printed circuit boards (PCBs) are important electronic components that support electronic components. Their downstream applications include communications (35%) and automotive (16%), and the automotive electronics PCB market is expected to unlock broad development potential.
Automotive PCBs are used in control systems, audio and video systems, GPS modules, and other applications. With the increasing degree of electrification in vehicles, demand for automotive PCBs will continue to grow. Specifically, as of July 2019, the value of a single PCB in low-end, mid-range, and high-end vehicles was US$30-40, US$50-70, and US$100-150, respectively. Driven by the “four modernizations” of the automotive industry, the value per vehicle is expected to increase significantly, driving continued growth in the overall market. VMR projects the global market size to reach US$12.48 billion in 2028, with a compound annual growth rate of 5.30% from 2020 to 2028. The Asia-Pacific region is expected to be the fastest-growing regional market.
Guojin Securities believes that the shift toward electrification and intelligent vehicles will reshape supply relationships (with OEMs gaining greater control of the supply chain) and alter the industry structure (with industry value shifting from traditional components to the three-electric systems and domain control software and hardware, and the emergence of new markets creating opportunities for restructuring the supply structure). These changes will provide mainland Chinese manufacturers, currently at a disadvantage in the automotive PCB market, with opportunities to overtake competitors.
Eton Electronics’ net profit is expected to double this year.
The automotive electronics PCB sector showed rapid growth overall in the first three quarters. According to Databao, among stocks rated by at least three institutions, companies like Pengding Holdings, Shiyun Circuit, and Eton Electronics all saw year-on-year net profit growth exceeding 90% in the first three quarters.
Eton Electronics holds a significant share of the automotive electronics PCB market. Galaxy Securities noted that Eton Electronics was one of the first manufacturers to enter the core automotive PCB supply chain of major international manufacturers, and its PCB products cover a wide range of traditional automotive parts. The company has seized the opportunities presented by the “four modernizations” of the automotive industry and is deeply engaged in the automotive PCB business, which is experiencing strong growth. Automotive electronics accounted for 46% of its revenue in the first half of 2022, up 1 percentage point from 2021. Eton Electronics’ semi-annual report shows that the company has successfully secured new automotive PCB customers, including Bosch, Hongjing Intelligent Driving, and Xiaopeng Motors. Prototyping and certification work for some new energy vehicle PCB customers is also progressing smoothly.
The sector is expected to continue its high growth. According to institutional consensus forecasts, Eton Electronics, Shiyun Circuit, Shengyi Electronics, and other companies are projected to have net profit growth exceeding 20% this year, next year, and in 2024. Eton Electronics leads the market with a consensus forecast of over 100% net profit growth this year.
With positive performance expectations, the automotive electronics PCB sector has also attracted institutional favor. Among the top ten circulating shares of Pengding Holdings, the dominant leader, one institution has newly invested in a significant position exceeding 300 million yuan, and three institutions have increased their holdings. Shanghai Electric Co., Ltd. saw three new institutional investments, with a combined market value exceeding 230 million yuan at the end of the period. Eton Electronics, which is expected to have the highest performance growth this year, has two new institutional investments: Huaan Industry Select Fund and Shenwan Hongyuan Securities.