Dongshan Precision (002384): 5G base stations with strong FPC momentum are ready

Dongshan Precision (002384): 5G base stations with strong FPC momentum are ready

Company status We recently invited Dongshan Precision Joint Venture to communicate with investors in Shanghai.

Optimistic about Dongshan Precision benefits from: 1) Apple ‘s mobile phones, accessories and other categories of FPC expansion and ASP enhancement, driving the circuit board business to challenge the world ‘s top three in the future; 2) Multi-point layout of dielectric filters, PCBs, etc., creating a 5G base station multi-categories supply.
Comment FPC strong performance: welcome 5G mobile phones, the possibility of smart accessories.

1) Increase in share: In the past few years, Dongshan Precision’s share in Apple’s FPC has continued to increase. Looking ahead, we believe that Dongshan will continue to replace its Japanese and South Korean counterparts with advantages such as cost control, scale effect, and customer cooperation, bringing more furtherEnhancement; 2) Mobile phones: We estimate that mobile phone-related revenue accounts for more than 60% of the company’s FPC business.

With the promotion of 5G mobile phones, we believe that the company will benefit from the penetration of MPI antennas, as well as the 5G mobile phone implantation and ASP upstream of Apple next year; 3) Accessories: We estimate that the revenue of accessories such as Apple 重庆耍耍网 Watches and Airpods account for 15% of the company’s FPC businessAround the east, Dongshan has also become one of the main FPC suppliers in the above accessories.

We believe that smart accessories can continue to grow rapidly, and the increase in FPC usage brought about by continuous innovation will still bring growth momentum.

Taken together, we believe that the performance of the company’s FPC business this year and next is expected to exceed our 20% / 16% annual growth forecast.

The layout of 5G base stations is perfect. Dielectric filters and PCBs are worth looking forward to.

1) Dielectric Filters: Dongshan is one of Huawei’s main suppliers of dielectric filters. We expect 2H19-1H20 to usher in category and capacity expansion in product lines such as dielectric filters, isolators, and ring devices; with 64 channels as theFor example, the demand for dielectric filters, isolators, and circulators in 5G base stations has reached 192, 128, and 64, respectively. Driven by the construction of 5G base stations, we expect that the scale of demand for ceramic dielectric filters will double in recent years.The above growth has benefited Dongshan.

2) PCB: We expect that the company’s substrate PCB is expected to achieve breakthroughs in domestic core customers in 1H20. In the long run, the application in the field of data communications will bring a wider space.

3) Others: Metal cavity filters, antenna sheet metal parts and other companies are also capable.

Estimates suggest that we maintain 19 / 20e 0.


04 yuan EPS is unchanged.

Currently corresponding to 19 / 20e26.


3 times price-earnings ratio.

Maintain outperform industry rating, consider 5G landing expectation trend to be hot and overall sector forecast to rise, raise target price by 12% to 28.

00 yuan, corresponding to 19 / 20e 33.


8 times P / E, compared with 26% upside.

Risks The progress of 5G landing is less than expected; the expansion and promotion progress is less than expected.