Jingwang Electronics (603228) Interim Review: 1H19 Revenue Increases 25%, Jingwang Flexible Profit Needs Improvement

Jingwang Electronics (603228) Interim Review: 1H19 Revenue Increases 25%, Jingwang Flexible Profit Needs Improvement

Investment Highlights: Interim Report: Operating Income 28.

52 ppm, an increase of 25 in ten years.

37%, net profit attributable to mother 4.

26 ppm, an increase of 9 in ten years.


Revenue growth was in line with expectations, and the climb in production capacity put pressure on gross margins.

The company’s revenue in the first half of the year increased by 25 per year.

37%, mainly due to the increase in production of Jiangxi Jingwang Phase II project and the consolidation of Jingwang’s flexible income (1.

5.2 billion).

In the first half of the year, the company produced a total of 211 rigid circuit board products.

680,000 square meters, an increase of 16 in ten years.

56%; a total of 60 flexible circuit board products are produced.

110,000 square meters, an increase of 45 in ten years.


As Jiangxi Jingwang Phase II is still in the ramp-up phase of production capacity, and the downstream consumer electronics boom is not high, insufficient capacity utilization has led to a gross profit margin of 19Q1 to 29.

9% dropped to 27.


The quality of operations is excellent.

Net operating cash flow of the company in the first half of the year 5.

300 million, higher than the net profit attributable to mothers during the same period.

2.6 billion, highly matching the performance of net profit.

In Q2, the accounts receivable turnover rate was 1.

61 increased to 1.


The inventory turnover rate was 2 from the same period last year.

88 dropped slightly to 2.


The turnover rate of fixed assets was 1 from the same period last year.

83 approximately 1 of 19Q2.

18, mainly due to the 90% increase in fixed assets over the same period of the previous year, due to the Jiangxi Phase II project commissioning and solidification and the acquisition of Jingwang Flexible in the fourth quarter of last year (6.

700 million assets).

The company is the leader in fine management of the domestic circuit board industry, and its yield and cost control have kept ahead.

From 2013 to 2018, the company’s capacity utilization rate reached 86% -95%, indicating that Jingwang Electronics’ asset utilization efficiency and product and asset matching are high.

Overweight R & D has achieved initial results, focusing on automotive electronics and 5G innovation cycle technology reserves.

Company R & D funding in the first half of the year1.

35 ppm, a 24 year increase.

49%, accounting for 4% of total operating income.
Following the 5G innovation cycle, the company has realized technology reserves and formed mass production capacity in “5G high-frequency antenna board processing technology, high-speed board processing technology, high-frequency board processing technology for power amplifiers, 5G-related buried resistance processing technology” and so on.

In 南京桑拿论坛 the field of automotive electronics, the company also carried out active research and development reserves, and realized the mass production capacity of “77G millimeter wave radar and microwave board processing technology for ADAS system, flexible and rigid board technology for ADAS system, and buried copper block technology for new energy vehicles”.
In the first half of the year, the company has entered the supply chain of core communication equipment vendors such as ZTE.

The advantages of the smart factory are obvious, and Jingwang’s flexible profit margin can be improved.

In terms of plant locations, the revenue of Jiangxi Jingwang Plant (PCB) was 7.

23 ‰, an increase of 47% in ten years; net profit1.

40 ppm, a 67% increase over ten years, and smart factory operation efficiency and profitability are far better than other factories.

Zhuhai win-win (FPC board) revenue 1.

5.2 billion, net profit -0.

4.3 billion, lowering the gross profit margin and net profit performance in the first half of the year, and is still in the adjustment period.

Maintain profit forecast and maintain BUY rating.

Maintain 2019/2020/2021 attributable net profit forecast10.



4 ppm, 2019/2020 PE is only 25 / 21X, optimistic about the company’s soft and hard board business potential in the second half of the year, and maintain a BUY rating.