On the evening of July 13, Sanhuan Group (300408.SZ) released a performance forecast that the company expects net profit attributable to shareholders of listed companies in the first half of this year to be 973 million yuan to 1.14 billion yuan, up 75% to 105% year on year.
Sanhuan group said, benefiting from the widespread application of 5G technology and the accelerating process of domestic replacement, passive components market demand is strong, the industry boom continues to rise, the company’s main products electronic components and materials, semiconductor components sales increased substantially. In addition, the impact of non-recurring gains and losses on net profit is expected to be 9250.00 million yuan.
The main products of sanring group include fiber optic ceramic inserts and sleeves, ceramic packaging base, MLCC (multi-layer ceramic capacitor), ceramic substrate and mobile phone appearance parts. The production and sales of the company’s ceramic inserts for optical communication, ceramic substrates for resistors and alumina ceramic substrates account for more than 70%, 55% and 50% respectively in the world, and the market share of the products ranks first in the world.
According to the research report of Sealand Securities, with the rapid development of downstream applications such as communication, computer and automotive electronics, the market size of electronic ceramics in China is growing day by day. From 2014 to 2019, the market size of China’s electronic ceramics industry has grown rapidly from 34.66 billion yuan to 65.77 billion yuan. In the future, with the commercialization of 5G communication and the construction of data centers, combined with the domestic replacement trend, it is expected that the market size of China’s electronic ceramics industry is expected to exceed 114.5 billion yuan in 2023.
Sanhuan Group announced on July 9 that the Shenzhen Stock Exchange has accepted its plan to raise up to 7.50 billion yuan by issuing shares to specific targets.
To be specific, Sanhuan the proposed $3.75 billion series multilayer chip ceramic capacitors for high capacity expansion project, 2.8 billion yuan for intelligent communication terminal encapsulated with new ceramic base expansion technology renovation project, 800 million yuan for electronic and electric devices with a new type of alumina ceramic substrate expansion project, 150 million yuan for shenzhen three-ring research base construction projects.
Among them, the Third Ring Group plans to raise more than half of the surrender MLCC production project. The annual output of MLCC is planned to be 3000.00 billion, and the total investment is 4.102 billion yuan. The company expects that after the completion of the project implementation, the annual sales revenue of the project is expected to reach 2.25 billion yuan, the financial internal rate of return of the project investment is 21.04%, and the static investment payback period is 6.36 years.
In response to the fundraising, Sanhuan said that under the background of the rapid development of 5G commercialization, automotive electronics and other industries and the deepening of domestic replacement process, the company’s MLCC, ceramic packaging base, ceramic substrate and other products are in strong demand, and the existing capacity can no longer meet the current and future market demand.
However, sanhuan Group also warned the risk that compared with the global electronic ceramics leading enterprises, the company still has a small product category, the overall sales scale is small gap; There are also risks that new capacity cannot be digested and product sales will fall.
Sealand Securities research report believes that the demand for MLCC continues to rise, the scale of China’s MLCC industry continues to expand, China has become one of the world’s major consumer electronics production base. MLCC demand is expected to see steady growth in the 5G era.
On the back of 5G, sanhuan’s share price has continued to rise over the past year, hitting 45.90 yuan per share on July 12, a new high since its listing, and its market value once exceeded 80 billion yuan.
It is worth mentioning that the main product is also MLCC fenghua high-tech (000636.SZ) also in the recent release of performance notice. The company expects to achieve net profit attributable to shareholders of listed companies of 470 million to 520 million yuan in the first half of this year, up 84.74% to 104.40% year on year, due to the strong demand of the electronic components market.
China Ceramics (300285.SZ), another company that sells electronic ceramics, has also seen its share price rise sharply over the past year, hitting 57.87 yuan in February, a new high since its listing. Then the company began to pull back, so far the market value of more than 11 billion yuan.